Foreign media reports indicate that Zcash has patched a critical vulnerability in the Orchard shielding pool through an emergency upgrade, but market concerns about the integrity of ZEC supply have not subsided. Following the disclosure of the incident, ZEC quickly plummeted from approximately $630 to around $387, a drop of over 40%, interrupting its months-long upward trend.
The vulnerability has been patched.
The report noted that the vulnerability occurred in the Orchard shielded pool, a crucial component of Zcash's privacy features. Developers stated that under certain conditions, the issue could allow attackers to generate invalid tickets within the pool. The team identified the problem before any known exploits were discovered, subsequently driving an emergency response and network upgrade.
The developers stated that there is currently no evidence that the vulnerability has been exploited, nor has any unauthorized generation of ZEC been found, and there has been no abnormal increase in on-chain supply. Nevertheless, market attention has shifted beyond fund security to whether the integrity of the Zcash currency remains sufficiently trustworthy.
Price structure disrupted
The article argues that this decline has significantly damaged the market structure. ZEC broke below its nearly three-month-long upward channel after the vulnerability was disclosed, halting its upward trend that had been pointing towards higher levels. The significant increase in trading volume during the decline indicates a concentrated release of selling pressure, rather than a typical pullback.
According to the data in the article, ZEC was once seen as having a chance to retest the $700 area, but market expectations weakened rapidly after the event. The technical signals cited in the report also show that the Relative Strength Index (RSI) has clearly declined, reflecting a weakening of short-term buying momentum.
Long positions remain open.
Despite the sharp drop in spot prices, open interest remains at a high level, indicating that some traders have not completely exited the market. Meanwhile, funding rates remain positive, suggesting that some bulls are still positioning themselves for a rebound.
However, the article also points out that this structure does not necessarily mean that the risks have been eliminated. If prices continue to decline while open interest and positive funding rates remain high, long positions may face a squeeze, potentially triggering a new round of liquidations.
The article mentions that ZEC is currently approaching the support zone around $300. If this area is breached, the market may continue to test lower levels. The core assessment of the report is that although the vulnerability itself has been addressed, the speed at which trust is restored will still determine ZEC's subsequent performance.
