ZCash Price News: ZEC Could Drop to $200 Again as Hayes Abandons Ship

Zcash (ZEC) has gone down by 30% in the past 24 hours alone after the protocol’s founder, Zooko Wilcox, informed the public about an exploit that would have allowed people on the know to create an unlimited amount of ZEC within the Orchard pool.

The vulnerability was identified by Taylor Hornby. The Shielded Labs team immediately addressed the report and fixed the counterfeiting bug.

However, Wilcox acknowledged that there is no way to know if someone exploited the vulnerability in the past.

Wilcox further stated that “due to the privacy properties of Orchard and the nature of the bug, there is no definitive way to determine using only cryptography whether such exploitation occurred before the vulnerability was discovered and fixed.”

This is a major blow to the credibility of a blockchain project that should supposedly be air-tight in terms of maintaining token holders’ anonymity via shielded pools like Orchard.

It undermines the public’s perception about the developing team’s capacity to oversee the blockchain’s integrity, and it could have a huge impact on Zcash’s future.

Arthur Hayes Abandons Zcash After Exploit is Revealed

Trading volumes surged to $3.7 billion – a figure that accounts for 62% of the asset’s circulating market cap. This reflects the strength of the selling pressure and highlights the market’s disappointment about these findings.

Right after this technical issue was announced, a prominent supporter of Zcash, Arthur Hayes, told the community that he dumped his entire ZEC stash.

“I read about the exploit yday, and didn’t appreciate how it violated my narrative mental map. The 30% dump made me rethink, and I had to take profit on the entire position,” Hayes stated in a lengthy X post.

However, he left the door open for future purchases. “We will consistently re-evaluate our thinking and if my assumptions are proven incorrect, will rebuy, hopefully at lower prices,” Hayes commented.

Hayes’ decision to abandon ship further hurts Zcash at a point when the price just hit a major resistance at $700. We can safely say that this rally is over. The project will now need to restore its credibility, especially among whales, after this critical bug was encountered.

Zcash Could Drop to $200 If This Support Area is Lost

Heading to the daily chart, the extent of today’s drop was huge. ZEC traded for $250 at some point, meaning a single-day decline of 46%. Meanwhile, paired with yesterday’s strong decline, ZEC has shed 40% of its value in just two days.

Right now, the market has found support at the $300 level. From a technical standpoint, this is the key area to watch. If we get a break below this mark, we expect that the downtrend will accelerate and catch-up with the overall performance of top altcoins like Ethereum (ETH) and Solana (SOL).

Cascade liquidations are probably forcing ZEC lower. However, organic selling could resume over the next few hours, as if Zcash manages to recover to $400.

A total of $76 million worth of long positions in this token were wiped out today. In just two days, the amount of blown-up longs surpassed $140 million. This was the second and third-highest single-day long squeeze in Zcash’s history, as per CoinGlass’s data, and is only surpassed by the October 10 flash-crash.

If the downtrend continues, our short-term target for ZEC would be $200, meaning a 46% downside risk.