Key Highlights
- Zcash dropped sharply from about $624 to near $300 after a critical Orchard security bug and institutional exits caused panic selling, then recovered strongly back above $500.
- Trading activity and short liquidations surged, with over $1.07 billion in volume and about $22.68 million in liquidations, mostly from short traders.
- The market is now focusing on resistance at $526, which will decide if the recovery continues or fails.
Zcash (ZEC) is back on track, up over 25% today after a strong recovery in the crypto market following a major security problem earlier this month.
The token had previously fallen heavily after a bug was found in its privacy system, called the Orchard shielded pool. While no confirmed exploitation was found on-chain, the Zcash Foundation acknowledged that there is no cryptographic way to prove the flaw was never used, which initially deepened market fear. The price has since recovered as the technical response proved effective and follow-up audits found no additional issues.
At the time of writing, the asset now trades for around $530, up from a daily low of below $420, thanks to a 112% surge in trading activity, which recorded $1.07 billion within the same period.
The Orchard bug that started the crash
The initial selloff began when a critical flaw was disclosed in Zcash’s Orchard system, discovered on May 29 by researcher Taylor Hornby during a protocol audit for Shielded Labs. Hornby found the vulnerability using Anthropic’s Opus 4.8 AI model. The weakness could have allowed someone to create fake ZEC coins without detection, as it had gone undetected since Orchard’s activation in May 2022.
Once this news was publicly disclosed on June 5, traders panicked and started selling quickly. The crash was amplified when Arthur Hayes, one of ZEC’s most prominent institutional backers, publicly exited his position on June 4, the day before the disclosure.
The price dropped sharply from around $624 down to approximately $300 on June 5. This was one of the biggest drops in recent times for Zcash, and it shook confidence in the project.
Developers had already moved quickly before the public disclosure. A soft fork on June 2 temporarily disabled Orchard transactions, followed by the NU6.2 hard fork on June 3, which permanently fixed the circuit and restored Orchard functionality.
Recovery driven by short covering
After the crash, buyers stepped back in aggressively, helping ZEC climb back above the $400 range and later toward $500. The recovery has been supported by short covering, where traders who had bet on further declines were forced to close positions.
According to data from CoinGlass, about $22.68 million was liquidated within the last 24 hours. Of that total, $21 million came from short positions alone.
The price action has now pushed ZEC into a recovery structure, with the asset printing higher highs and higher lows on the chart. ZEC is above $420, which has turned into a key support area after previously acting as a demand level during the crash.
Community push for real-world use
At the same time, community voices have tried to shift the narrative away from fear. An ambassador of the network, Batuhan, described the situation on X not as a flaw but as a step forward for real-world use, pointing to growing merchant adoption through Flexa, an integration that allows users to spend ZEC directly at thousands of retail locations.
Batuhan noted that over 9,000 active merchants are already connected and efforts are ongoing to expand usage. This type of message has helped strengthen the view that Zcash is still developing real utility despite recent price action.
ZEC faces resistance at $534
Attention is now centered on resistance near $534, a level that could potentially put a stop to the rally. If the price breaks this level with strong volume, ZEC could move toward $550 to $600, and potentially as high as $680 to $700 before the end of June 2026 if the trend stays strong.
However, the market is still risky. If Zcash fails to stay above $500, the price could fall back to the $420 support zone. If that support breaks, some analysts warn that the price could drop further toward $300.
Moreover, the Relative Strength Index is currently at 78, suggesting that the price is moving into overbought territory. This level is important because it could align with the resistance and trigger selling pressure to the downside, or result in just a short retracement before a further upward push.
Security updates help calm the market
Security updates have also helped calm the market. On June 12, Zcash underwent an AI-powered security audit using Anthropic’s Mythos Preview model, the company’s most advanced and restricted AI system used for security research under its Project Glasswing initiative. The audit was requested by Shielded Labs.
Zcash founder Zooko Wilcox confirmed on X that the audit did not find any additional serious problems in the protocol, writing: “At Shielded Labs’s request, they ran a security audit of Zcash with Mythos. It did not find any more serious bugs in the Zcash protocol.”
This helped rebuild trust after the earlier sell-off, with Shielded Labs and other contributors continuing security hardening work ahead of the planned Ironwood upgrade, targeted for late July 2026.
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