Zcash jumped 11.3% on Tuesday, with each ZEC trading at $478 as the cryptocurrency clawed back roughly 80% of the value it lost during a sharp June 5 sell-off. The rally pushed the token's market capitalization back above $8 billion and liquidated $11.5 million in short positions — bets against the price that wrong-footed traders.
A steady climb after the June 5 plunge
The recovery didn't happen overnight. Since bottoming out after the June 5 crash, Zcash has been grinding higher. Tuesday's surge was the latest leg in that trend, bringing the token within striking distance of its pre-plunge level. Market data shows the move was driven by buying pressure, not a single catalyst, though the size of the short squeeze magnified the gain.
Short sellers had piled in after the June drop, betting the price would fall further. Instead, the steady recovery forced them to cover positions, adding fuel to the rally. Over $11 million in leveraged short bets were unwound in a single day, a figure that underscores how lopsided the positioning had become.
Recovery despite the Orchard Vulnerability
The rally is notable because it happened even as fears about the Orchard Vulnerability hung over the Zcash ecosystem. The bug, which affects a feature of the privacy-focused network, was disclosed earlier this year and has remained a source of concern for some holders. So far, developers have not reported any exploit tied to the vulnerability, but the uncertainty hasn't stopped buyers from stepping in.
For now, the market is pricing in a scenario where the bug either gets patched without incident or proves less damaging than initially feared. That optimism has helped Zcash outperform many of its peers in the privacy-coin sector over the past week.
The key question for traders is whether the rally can hold. Zcash now sits at a resistance level that previously acted as support before the June 5 breakdown. If the price clears that zone, the next target is the $500 mark, a psychological barrier that has eluded the token since early this year.
On the downside, the Orchard Vulnerability remains a wild card. Any news of an actual exploit or a delayed fix could reverse the gains quickly. For now, the buyers have control, and the short squeeze has reset the board. But with the vulnerability still unresolved, the recovery rests on a fragile foundation.
