Key takeaways
- ZEC is down 45% and is now trading at around $309 per coin.
- The vulnerability was patched within days, and results indicate that actual exploitation of the flaw is unlikely.
Zcash fell sharply on Friday after researchers uncovered a critical vulnerability in Orchard’s protected transaction pool that could have theoretically allowed an unlimited number of fake tokens to be generated.
The price fell approximately 45% to $309, with most of the decline occurring shortly after the security disclosure was announced.
A serious defect has been found in the protected Zcash Orchard swimming pool
The vulnerability was identified by security researcher Taylor Hornby during an audit commissioned by Shielded Labs, an independent support organization for the Zcash ecosystem.
According to the report, the issue was present in Orchard Circle, a zero-knowledge proof system that secures private transactions within the protected Zcash pool.
The flaw allowed unrestricted entries in elliptic curve calculations, making it possible to pass invalid values as valid evidence.
In a test environment, the researchers were able to produce undetectable fake ZEC. This bug has been around since Orchard was activated in May 2022. The vulnerability was patched on June 1, shortly after it was discovered.
Despite the seriousness of the issue, Shielded Labs said there is no clear evidence that the vulnerability was directly exploited.
Reasons cited include: The complexity of Orchard’s privacy system obscures transaction tracking, the bug has remained undetected for years despite cryptographic scrutiny, and no confirmed anomalies have been identified in the offering
However, the organization acknowledged that absolute certainty is impossible due to the privacy-preserving nature of protected transactions.
The ZEC index fell by 45%. Will he recover soon?
The 4-hour chart of ZEC/USD is bearish and active as Zcash has lost 45% of its value in the past 24 hours.
Momentum indicators have turned lower, with an RSI of 33 indicating an oversold condition. The MACD lines are also within negative territory, adding further confluence to the bearish bias.
He sells
If the sell-off continues, ZEC could fall below Friday’s low at $245 and retest the psychological level of $200.
However, a bounce above the $300 level indicates that the sell-off may end soon. If the bulls regain control, ZEC could rise towards the first major resistance level at $413, with further hurdles around the $527 area.
