What to Know
- Zcash fell 17% in 24 hours after its entire core development team resigned following a governance dispute.
- The developer exit raised fears about future upgrades and leadership, triggering panic selling.
- Broader market weakness and Bitcoin’s drop below $90K added pressure to ZEC’s price.
Zcash (ZEC) saw a sharp fall over the last 24 hours, dropping around 17% and performing far worse than the wider crypto market. The sudden drop came as investors reacted to shocking news from inside the project, combined with a weak overall market.
At the centre is a major governance dispute that led to the resignation of the entire core development team. This crisis hit confidence hard and triggered panic selling, while a broader market sell-off made the damage even worse.
Governance Shakes Confidence
The biggest trigger for Zcash’s fall was the exit of the full team from Electric Coin Company (ECC), the main group responsible for building and maintaining Zcash. The team resigned collectively on January 7–8 after a dispute with Bootstrap, a nonprofit organization that oversees governance for the project.
ECC CEO Josh Swihart said the team was “constructively discharged,” meaning their working conditions and terms were changed so much that continuing their work became impossible. He accused the Bootstrap board of taking “malicious governance actions” that prevented ECC from carrying out its mission.
This sudden exit raised immediate concerns. With the main developers gone, investors began to question who will guide Zcash going forward and whether planned upgrades and tools, including the Zashi wallet, will be delayed or cancelled. The lack of clear leadership created uncertainty, and that uncertainty quickly showed up in the price. Swihart also said the former ECC team plans to form a new company to continue working on privacy-focused technology and what he described as “unstoppable private money.” However, for many investors, that promise was not enough to stop the sell-off.
Technical Breakdown
The price drop was not only about bad news. The charts were already looking weak before the governance issue became public. ZEC fell below an important price range between $391 and $404, which had acted as strong support through December. Once that level broke, selling picked up speed. Traders who were betting on higher prices were forced out of their positions, leading to around $12 million in liquidations.
Market data showed that interest in ZEC futures also fell sharply, down about 24% since late December. This suggests many traders are stepping away and avoiding risk. The breakdown confirmed bearish momentum, with indicators like MACD and Chaikin Money Flow (-0.37) signalling intense selling pressure and capital outflows. If ZEC cannot move back above the $391 level, analysts warn the price could continue sliding toward $300. At the time of writing, Zcash has slightly recovered and is trading at around $405.
With Bitcoin falling below $90,000, it is dragging many altcoins down with it. Altcoins saw broad losses as traders reduced exposure, and Zcash was hit harder due to its lower liquidity and already-high volatility. The Crypto Fear and Greed Index slipped to a “Neutral” reading of 43, showing reduced appetite for risk across the market.
Protocol Still Running
Despite the turmoil, both Swihart and Zcash founder Zooko Wilcox stressed that the Zcash protocol itself remains operational. The network is open-source and continues to run with the help of miners, validators, and users. The Zcash Foundation is still active and oversees other parts of the ecosystem, including grants and infrastructure.
Still, markets are forward-looking. Investors are now watching closely to see whether a new development team emerges and whether governance issues can be resolved. Swihart added, “This decision is simply about protecting our team’s work from malicious governance actions that have made it impossible to honor ECC’s original mission.”
Conclusion
Zcash’s sharp drop is the result of a perfect storm. Internal governance chaos, technical levels breaking down and a weak market environment made the sell-off more intense. The key question is whether ZEC can hold above the $391 level and whether clear leadership can restore trust. Until then, volatility is likely to stay elevated, and traders will remain cautious.
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