Bearish Zcash Bets Hit Record as ZEC Slides on Privacy Pool Bug Disclosure

Bearish positioning in zcash futures rose to a record as ZEC fell as much as 50% over 24 hours, according to CoinDesk. The selloff followed disclosure of a now-patched vulnerability in Zcash’s Orchard privacy pool, a flaw that raised questions about whether the token’s supply could have been affected without detection.

The move matters because the market reaction appeared to be driven less by forced leverage unwinds and more by holders selling spot ZEC while futures traders opened fresh bearish bets. CoinDesk cited roughly $118 million in forced liquidations over the period, a relatively small figure for an asset that nearly halved, suggesting the decline was not primarily a leverage cascade.

Open interest, or the value of unsettled futures positions, climbed to a record in ZEC terms. Long-short data also showed bearish skews on major venues including Binance and OKX, while Bybit retail traders were an exception with a long-leaning ratio.

The technical concern centered on Orchard, a Zcash privacy pool introduced in May 2022. CoinDesk reported that Shielded Labs disclosed a vulnerability that, if exploited, could have allowed undetectable counterfeit ZEC to be created; the issue was found by security engineer Taylor Hornby and patched in an emergency fix by June 1.

Uncertainty remains because Shielded Labs said there is no cryptographic way to prove whether the flaw was exploited before it was fixed. CoinDesk also noted that ZEC, despite losing more than half its value over two weeks, was still up roughly 490% over the prior year, leaving the market exposed to volatility if heavily shorted positioning reverses.