Bearish bets on privacy-focused zcash (ZEC) hit a record as the token slumped as much as 50% in 24 hours after a now-plugged vulnerability in its Orchard pool was disclosed.
ZEC recorded roughly $118 million in forced liquidations over the period. That is remarkably small for a token whose price halved, suggesting the selling came mostly from spot held tokens rather than a futures-driven move. Only about 14% of zcash's leveraged positions got wiped out.
In comparison, about $335 million in bitcoin-tracked futures were liquidated over the same window even though the largest cryptocurrency fell only a few percent.
Open interest rose to a record high in ZEC terms, suggesting traders opened new positions rather than closing them. The long/short ratio shows those positions skewed bearish. On Binance, the ratio sat below 1 across retail investors at 0.77, whale accounts at 0.80 and whale positions at 0.85. Traders on OKX were more bearish, with retail at 0.67 and whale accounts at 0.72.
The catalyst for the price drop was the disclosure by nonprofit Zcash developer Shielded Labs of a vulnerability in Zcash's Orchard privacy pool that, if exploited, could have let an attacker create counterfeit ZEC. The Orchard flaw had been live since the pool debuted in May 2022, going unnoticed for four years. It was found only last week by security engineer Taylor Hornby using Anthropic's Opus 4.8 model and patched in an emergency fix by June 1.
Because of the way Orchard's privacy works, there is no cryptographic way to prove whether anyone exploited the flaw before it was fixed. Arthur Hayes, the chief investment officer of Maelstrom, said he sold his entire zcash position as a result.