The privacy coin zcash (ZEC) tumbled to $316 on Dec. 2, marking its lowest point in almost a month. The price slide comes as the intense privacy narrative that fueled its recent rally appears to wear off, leading to heavy losses.

Fueled by a broader crypto market surge sparked by headlines around asset management giant Vanguard, ZEC briefly climbed to just under $380. Yet the momentum quickly faded, pointing to the coin’s fragile technical support levels and the fleeting nature of sentiment-driven rallies. The privacy coin was back under $350 at the time of writing (1:30 p.m. EST).

ZEC was one of the few digital assets to post negative gains over a seven-day period. In fact, it had the notable distinction of being the only high-cap altcoin with double-digit losses. Since peaking at $700 on Nov. 20, ZEC has seen its market capitalization shrink from nearly $11.5 billion to $5.67 billion, causing it to lose its status as the most capitalized privacy coin in the process. This reversal has fueled claims of a coordinated “pump and dump” scheme, with critics arguing the rally was driven by hype, not fundamentals.

Analysts point to zcash’s controversial governance model as a key factor behind the privacy coin’s recent struggles, with the system drawing sharp criticism from prominent industry voices. The flashpoint came on Nov. 26, when co-founder Zooko Wilcox defended the current committee-driven, off-chain governance structure in a post on X. This framework, anchored by bodies such as the Zcash Community Grants Committee (ZCG), places decision-making power in the hands of a small group of appointed individuals—an approach that many argue undermines decentralization.

Wilcox maintained that the system works because it relies on “thoughtful and independent” people committed to the protocol’s mission. This defense immediately sparked pushback: Naval Ravikant, whose past comments seemingly helped to kickstart ZEC’s parabolic rally, branded the governance system “obsolete.” He argued that the system is flawed, stating:

“‘Trusted’ third parties are a security flaw and it doesn’t matter if they are ‘thoughtful and independent.’ All governance for decentralized protocols should be onchain and private.”

Read more: Privacy Coin ZEC Soars After Thorswap Support and Grayscale Trust Announcement

Vitalik Buterin, Ethereum co-founder, added to the chorus of disapproval, asserting that “token voting is bad in all kinds of ways.” According to Buterin, “privacy is exactly the sort of thing that will erode over time if left to the median token holder.”

The public debate over the fundamental future of Zcash’s governance coincided with the sharp price drop; since Wilcox’s post on Nov. 26, ZEC has declined by over 30%. Still, some technical analysts project the privacy coin to drop further. Analyst Ardi shared a bearish outlook in a Dec. 2 post, stating they expect the decline to continue until a key support level is hit.

“We are grinding straight into our $297-$311 magnet. RSI [is crushed here, but price is barely reacting, which means sellers are still suffocating the market. When indicators scream ‘buy’, and price does nothing, the flush usually goes deeper,” the analyst explained.

Ardi confirmed they are keeping their short position open unless ZEC recaptures the $380 level.

• Why did ZEC drop to $316? The privacy coin’s rally faded as hype-driven momentum lost steam.
• How big were the losses? ZEC fell over 30% since Nov. 26, shrinking its market cap from $11.5B to $5.67B.
• What role did governance play? Zcash’s off-chain committee system drew sharp criticism from industry leaders like Naval Ravikant and Vitalik Buterin.
• What’s the outlook ahead? Analysts warn of further declines unless ZEC regains the $380 resistance level.

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