ZEC Pulls Back From $600 After Multicoin’s Disclosure Triggers 80% Weekly Surge

Zcash (ZEC) is currently cooling off after a vertical move that saw the asset reclaim the $600 level on May 6. The rally was sparked by Multicoin Capital co-founder Tushar Jain, who disclosed at Consensus Miami that the firm has been building a significant ZEC position since February. This disclosure, framed as a hedge against rising financial surveillance, triggered a massive short squeeze and pushed ZEC to an 80% weekly gain. As of early May 7, ZEC is trading near $570 as the market digests the recent volatility and tests the strength of new support levels.

Key Takeaways

• Multicoin Capital revealed a significant ZEC position accumulated since February at Consensus Miami on May 6.
• ZEC surged from $430 to $600 within 48 hours, briefly flipping Monero in market capitalization and posting roughly 80% weekly gains.
• Approximately $62 million in short positions were liquidated within 24 hours, the second largest event behind Bitcoin in that window.
• The investment thesis specifically cited California’s proposed Initiative 25-0024 (a wealth tax) as a warning sign of growing state level financial surveillance.
• ZEC is currently consolidating near $570. A hold above the $550 zone is required to keep the bull flag structure intact.

Multicoin Breaks Ranks and Buys ZEC

The catalyst for this week’s price action was Tushar Jain’s panel at Consensus Miami on May 6. Jain, co-founder of Multicoin Capital, revealed that the firm has been quietly accumulating ZEC since February 2026. This marks a complete reversal of the firm’s 2019 position, where it argued that privacy was a feature rather than a standalone product.

Jain’s current argument is centered on "seizure resistant assets." He acknowledged that while Bitcoin is protocol level censorship resistant, the transparency of public ledgers creates a vulnerability. If a government or creditor can link a public address to a real person, those holdings become targetable. 

Jain cited California’s Initiative 25-0024, a proposed 5% wealth tax on billionaires, as a signal that governments will eventually target visible on-chain wealth. Zcash’s shielded transaction architecture is designed to close this specific gap.

Behind ZEC’s 80% Weekly Surge

ZEC began the week trading near $430. As news of the Multicoin disclosure circulated on May 6, the rally accelerated violently. ZEC jumped from $430 to $520 in a matter of hours, eventually peaking at $607. The move was heavily fueled by a short squeeze, with nearly $62 million in bearish bets being wiped out. This forced buying drove the price into an overextended state, briefly taking Zcash’s market cap above $10 billion.

On-chain data confirms that structural supply is tightening. Roughly 31% of the circulating ZEC supply now sits in shielded addresses, a record high. This reduces the liquid float available on transparent exchanges. When the short squeeze met this tightening supply and the retail accessibility of the recent Robinhood listing, the result was a parabolic extension.

Mapping the $550 Support and Next Breakout Targets

ZEC has entered a critical consolidation phase on the 4-hour chart following the breakout. The price is currently cooling below the $600 resistance zone as traders take profits and momentum begins to stabilize. 

The most important level to watch right now is the $550 zone. This area flipped from resistance into support during the breakout. As long as price continues holding above $550, the broader structure resembles a high-tight consolidation or bull flag. If bulls successfully reclaim $600 with strong volume, the next major target is the $680 to $700 liquidity region.

From a momentum perspective, the 4-hour RSI has backed off from the extreme 80 level and is now reading in the high 70s. While still overbought, the cool down suggests that the initial liquidation fuel has been spent and the market is moving into a spot-driven phase.

 The Ultimate Oscillator sits above 65, which supports the bullish continuation thesis as long as the $550 floor holds. Losing the $500 level would weaken the bull flag structure and open the door for a deeper retracement toward the $450 previous breakout zone.

What to Expect Next

• Bullish Case: ZEC holds the $550 support and builds a base. A reclaim of $600 on high volume opens the door for a target of $680 to $700.
• Bearish Case: Profit-taking accelerates and the $550 region fails to hold. This would risk a deeper move toward the $450 breakout region.
• Key Catalyst: Watch for additional public comments from Multicoin or other institutional funds regarding the privacy narrative.
• Invalidation: A daily close below $450 breaks the current market structure and invalidates the bullish thesis.

The Multicoin disclosure has fundamentally changed the Zcash narrative, shifting it from a "forgotten legacy coin" to a relevant macro hedge against surveillance. However, moves of this magnitude rarely happen in a straight line. The current consolidation near $550 is a necessary pause to see if spot demand can sustain the levels reached by the initial short squeeze. If the floor at $550 holds through the weekend, the privacy rotation is likely just beginning. If it fails, expect a painful reset as late buyers get flushed out.

Why is Zcash pulling back after hitting $600?

The move to $600 was driven by a massive short squeeze and high leverage. After hitting $607, traders began taking profits, and the market is now testing the "breakout support" at $550 to see if buyers are still active at these higher prices.

Why did Multicoin Capital buy ZEC?

They view Zcash as a hedge against financial surveillance. Co-founder Tushar Jain cited proposed wealth taxes in the US as evidence that investors need assets that can obscure their total balance and transaction history.

What is the "shielded pool" and why does it matter?

The shielded pool is the portion of ZEC supply that uses zero-knowledge proofs to keep transaction details private. With 31% of the supply now shielded, there is less ZEC available for trading on public exchanges, which can lead to more volatile price moves when demand spikes.