ETH Hits 13-Month Low Like BTC, Altcoins Crumble: $1.4K Next?
Main Receptors:
As liquids cut the relief frequency, the metrics of the ether derivatives shift to a severe depression bias. A critical ZCash bug discovered by AI sparks contagion fears, sparking a contraction in Ethereum TVL.
Ether (ETH) fell to a 13-month low of $1,540 on Friday, following a bearish trend in the broader cryptocurrency market. Traders now fear a deeper price correction, weakness in ETH derivatives benchmarks and increased risk following the discovery of a bug in the Zcash blockchain.
ETH Perpetual Future Annual Funding Amount. Source: Simplicity
Ether futures annualized funding volume turned negative on Friday, indicating increased demand for short positions. While ETH trading is 67% below its all-time high since August 2025, confidence among the bulls has crumbled after $1.28 billion in used longs burned through in 5 days.
ETH Options Premium Call Ratio in Deribit. Source: Lavitas
Deribit ETH options increased to 3.7 times on Friday, increasing demand for discount protection. The index has shown a series of abundant sell (sell) options since Monday. Low confidence among holders exacerbates uncertainty, providing an easy way to control bears.
ETH Price Follows Zcash: Why?
The drop to the lowest total value (TVL) of the Ethereum network since February 2024 has negatively affected trader sentiment. Smaller deposits in decentralized applications (DApps) reduce ecosystem revenue, ultimately reducing the need for ETH usage in smart contracts.
Ethereum Network DApps Total Value Locked, USD. Source: Defillama
Some of Ethereum's top DApps experienced severe TVL contracts, including Spark (-50%), Ether.fi (-49%), EigenCloud (-41%), and KernelDAO (-39%). The move away from smart contracts can be attributed in part to the critical vulnerability it allows. Unlimited ZEC creation With a large ZCash zero knowledge pool. The bug was discovered on May 29 using the Opus 4.8 AI model from Anthropic.
Since the ZCash bug went unnoticed since 2022, traders fear that other blockchains and smart contracts could also be compromised. Advances in AI-driven security failure detection have put investors on high alert, especially of late cryptocurrency hacks It reached $630 million in April.
KelpDAO's $293 million hack and Drift Protocol's $280 million exploit accounted for 82 percent of monthly losses across 25 protocols, sparking panic in the decentralized finance (DeFi) industry. The hacks took place on several networks including Ethereum, Solana, Base, BNB Chain, Sui and PulseChain.
Percentage gain of ETH supply since your last move. Source: Mirror intersection
Currently, the supply of ETH is only 30% profitable relative to the last time those coins moved. This setup has only happened a few times in history, the most recent example being the mid-March 2020 Covid crash. Prior to that, this strong buy signal emerged in mid-December 2019 before a 118% rally over 60 days.
Related: FG Nexus spent an additional $17.8M in Ether for over $100M in losses.
With more than $500 million of leveraged ETH long positions liquidated in 48 hours, there are no signs of relief. The largest Ethereum treasury company Bitmine (BMNR US) is sitting on an unprecedented loss of 10.5 billion dollars, the company holds 4.5% of the total supply of ETH.
ETH may slip below $1,550 as investor confidence falters following several hacks in the DeFi industry and inflation found in the capped Zcash protocol.
