Zcash recently experienced a sharp correction. Affected by the disclosure of the Orchard privacy pool vulnerability, ZEC fell by approximately 35% within 24 hours, with its previous strong rally quickly turning into a concentrated sell-off. Although the project team has completed the fix, market concerns have not immediately subsided.
Vulnerability disclosure triggers selling pressure
The immediate trigger for this decline was the public disclosure of vulnerabilities related to the online privacy pool. The article states that although the problem has been fixed, the disclosure itself still damaged market confidence. This was especially true after ZEC had just experienced a rapid rise, with profit-taking and safe-haven selling occurring simultaneously, amplifying the decline.
Santiment data shows that whale sentiment weakened first, followed by retail investor sentiment turning cautious. With both types of participants adopting a bearish stance simultaneously, selling pressure accumulated further, causing prices to drop rapidly.
The market is focused on the progress of trust restoration.
Following this correction, market focus has shifted from Zcash's recent surge to whether the vulnerability will continue to impact network credibility. For privacy coin projects, security and credibility are fundamental to valuation; therefore, even if the vulnerability is patched, it may still suppress buying interest in the short term.
The article also mentioned that some investors chose to reduce their positions after the incident was disclosed. Arthur Hayes stated that after assessing the relevant issues, he sold all of his ZEC holdings. He believes that although the possibility of the vulnerability being abused may not be very high, as long as the risk cannot be completely eliminated, it is enough to prompt him to exit the market.
Price range becomes the focus in the short term.
From a trading perspective, the market is observing several key ranges. The article mentions that the $429 to $440 area may act as resistance after a short-term rebound. If prices return to this range, they may encounter selling pressure again.
- The $400 to $390 range is the intermediate support zone.
- $370 and $342 are key levels to watch for further downside.
- $360 is considered a key support level.
Market sentiment may gradually ease only if prices rise back to higher levels. The article notes that above $449 suggests selling pressure may be easing; a further recovery above $486 would weaken the current bearish trend. The $502 to $511 range is considered a more significant recovery zone.
Overall, ZEC's recent sharp decline was not solely driven by technical factors, but rather by a combination of factors: a decline in confidence triggered by vulnerability disclosures, profit-taking, and weakening sentiment. Going forward, the market's focus will not be on whether the vulnerabilities have been patched, but rather on whether Zcash can restore public expectations for cybersecurity and its future applications.
