Bitcoin Drops Below 200-Week Average After Zcash Bug

Bitcoin fell to $62,495 on Friday, moving below its 200-week moving average as U.S. stock indexes reached fresh highs and a disclosed four-year Zcash double-spend exploit triggered widespread selling in crypto markets.

The Zcash disclosure described a flaw that allowed the same balance to be spent more than once over several years. The announcement coincided with heavy sales across Bitcoin, Ethereum and smaller tokens. On-chain analytics firm Glassnode reported that aggregated realized losses rose to about $1.3 billion per day as traders who bought near recent cycle peaks began selling.

Market participants identified several near-term drivers. Public selling by MicroStrategy and the Zcash disclosure were cited as immediate catalysts. Some traders reduced exposure and signaled they would only re-enter positions if certain technical thresholds were met; one prominent trader wrote that he would buy only if Bitcoin’s weekly candle closed above $71,000.

Equity markets moved in the opposite direction. The S&P 500, Nasdaq 100 and Dow Jones Industrial Average all reached record levels, with the S&P on track for its longest weekly winning streak since 1985. Investment flows concentrated in a small group of AI-related stocks, while interest also increased in space and robotics sectors ahead of a planned SpaceX initial public offering.

Political and economic developments added to market complexity. A congressional proposal called the American AI Sovereign Wealth Fund Act would seek equity stakes in leading AI firms. The chief investment officer at Pimco warned of the start of a sustained credit-default cycle. Data on small business hiring showed sentiment at its weakest since May 2020.

The Zcash incident intensified scrutiny of privacy-focused tokens and private-transaction protocols. Developers and community members flagged concerns about incentive structures and product development in several altcoin ecosystems. An analyst firm reiterated that token airdrops often lead to selling pressure rather than sustained support.

Some projects and platforms experienced divergent outcomes. The trading-token HYPE reached new highs and increased market share among perpetual-volume venues, while a U.K. regulator flagged its operator as an unauthorized firm. Major exchanges announced new products and token support, and at least one disclosed open-market purchases of a structured token.

Traders and investors continued to watch technical levels such as the 200-week moving average and to monitor security and macro signals that affected confidence in digital assets. Volatility persisted as market participants assessed on-chain data, security disclosures and concentrated gains in equities.