+8.17% for Zcash as emergency patch for critical counterfeiting flaw sparks buying

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Zcash surges 8.17% to $407.45 today

Highlights

Zcash faced severe supply risk after a major counterfeiting flaw in its Orchard pool, prompting an emergency patch and ongoing upgrade proposals.
High-profile exits, including Arthur Hayes selling out of ZEC and a $13 million withdrawal from Binance, signal heightened risk aversion among large holders.
Despite recent fundamental shocks, ZEC/USD maintains a bullish multi-timeframe structure with short-term overbought signals and a 2–3 day range forecast of $325.96 to $488.94.

Acute risk aversion as supply vulnerability drives major outflows

Zcash was thrust into turmoil after a critical counterfeiting vulnerability, active in its Orchard shielded transaction pool since 2022, was publicly disclosed on May 29 by security researcher Taylor Hornby—posing an unprecedented threat to supply integrity. In response, Zcash developers conducted an emergency network upgrade to immediately patch the flaw and have since proposed the Ironwood upgrade to allow for independent verification of the ZEC supply, but this solution is not yet in effect. High-profile market moves followed, as Arthur Hayes completely exited his ZEC position and over $13 million in ZEC was withdrawn from Binance by a new wallet, signaling acute risk aversion among major holders.

Overbought signals emerge as price surges above key averages

Technically, ZEC/USD is trading well above the MA-20 at $363.81 and the MA-50 at $357.29 on the H1 timeframe, as well as the daily MA-200 at $380.19. The Ichimoku Kijun sits at $371.91, which forms an immediate support level, while the most recent price action is close to the session’s high. Momentum indicators show mixed signals: RSI is at 53.1 (suggesting mild buying momentum), MACD is neutral, and ADX reflects a buy signal. Meanwhile, Stoch RSI remains neutral, CCI is in overbought territory, and BBP also indicates an overbought condition, consistent with strong buyer dominance. A notable divergence arises from the combination of overbought CCI and BBP with a neutral MACD, suggesting some risk of exhaustion despite the bullish intraday surge. The price gap to the previous close stands at 14.29, pointing to a volatile session.

Upside favored as volatility bands frame rangebound outlook

Over the next two or three trading days, the most probable scenario is that ZEC/USD consolidates within a volatility band of $325.96 to $488.94. The up-probability is 56%, with a 44% chance for a downside move, placing greater odds on stabilization or further gains relative to a notable retracement. Should bullish momentum persist and resistance be breached, additional upside toward the upper end of the range becomes feasible. Conversely, if selling pressure decisively returns, a move below immediate supports would open the door to a deeper correction.

Viktoras Karapetjanc, expert at Traders Union, notes Zcash’s rapid technical recovery and the constructive price action above key moving averages. He sees the swift emergency response and commitment to transparency as positives for sentiment, despite recent turbulence from the disclosed vulnerability. With institutional exits and major withdrawals clearing out weaker hands, Karapetjanc believes the groundwork is laid for renewed stability. He expects that if confidence is maintained ahead of the Ironwood upgrade, the current momentum could persist. "After this shock, Zcash has a real chance to demonstrate resilience and regain trust, provided it delivers on transparency in the near term."

Previously it was reported that Zcash faced significant volatility and indecision following the discovery of a critical protocol vulnerability and subsequent emergency response measures. The latest price action strengthens the outlook for continued near-term stabilization, but traders should remain alert to the elevated risk of momentum exhaustion despite higher odds for further gains.

Source of Data: ZEC Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.