Zcash (ZEC) experienced a sharp decline of nearly 50% from its peak following the discovery of a critical vulnerability in the Orchard shielded pool, which triggered panic selling and forced liquidations. The price dropped to an intraday low of $264.80 on June 5 before recovering to around $380, according to crypto.news data.
The selloff intensified after BitMEX co-founder Arthur Hayes disclosed he had sold his entire ZEC position, citing the need for perfection in privacy-focused assets despite the low likelihood of exploitation. However, not all investors fled; Lookonchain data revealed that a newly created wallet withdrew 37,316 ZEC (worth approximately $13.1 million) from Binance shortly after the crash, indicating that some large players viewed the decline as a buying opportunity.
The derivatives market saw a violent reset, with ZEC liquidations reaching nearly $82 million as leveraged positions were wiped out. The three-day liquidation heatmap suggests that much of the downside liquidity below $300 has been cleared, with short liquidation leverage concentrated between $370 and $390. If buyers maintain momentum, these zones could become targets as short sellers are forced to close positions.
On the four-hour chart, ZEC plunged through key Fibonacci support levels, hitting a low near $265, just above the 0% retracement at $253, before rebounding. The recovery pushed the token above the 23.6% retracement at $356, with potential resistance at $420, $471, and $523. However, momentum indicators remain mixed; the Relative Strength Index has recovered from oversold levels but stays below 50, while the MACD remains below zero, though bearish momentum is easing. If ZEC fails to hold above $356, it could retest $300 or even $253, renewing focus on the uncertainty surrounding the Orchard bug.