- Ether derivatives metrics turned heavily bearish after cascading liquidations prevented a recovery.
- A critical ZCash bug, discovered by AI, sparked widespread fears of contagion across blockchains.
- Ethereum‘s Total Value Locked (TVL) contracted severely, hitting its lowest point since February 2024.
- Demand for downside protection spiked as the put-to-call premium ratio surged to 3.7 times.
- Only 30% of the ETH supply remains profitable, a rare level last seen during the March 2020 crash.
Ether (ETH) plunged to a 13-month low of $1,540 on Friday amid a broad market downturn. This sharp decline followed $1.28 billion in leveraged long liquidations over just five days, data shows the annualized funding rate for perpetual futures has turned negative.
Consequently, trader confidence has collapsed, with demand for put options soaring. The put-to-call premium ratio at Deribit spiked to 3.7 times, indicating intense fear of further losses.
Meanwhile, the Ethereum network’s Total Value Locked (TVL) collapsed to its lowest level since February 2024. Major DApps like Spark and Ether.fi saw TVL contractions of 50% and 49%, respectively.
This exodus is partly linked to panic over a critical bug found in the largest ZCash zero-knowledge pool. The vulnerability, which allowed unlimited minting, had existed since 2022 but was only detected on May 29 by an AI model from Anthropic.
Consequently, fears of similar undiscovered flaws in other protocols have spread. This anxiety was exacerbated by April’s $630 million in cryptocurrency hacks, primarily from exploits on KelpDAO and Drift Protocol.
Currently, a mere 30% of the ETH supply is in profit, according to Glassnode. This extreme level has historically signaled major market bottoms, including in March 2020.
However, with over $500 million in longs liquidated in 48 hours, a relief rally seems unlikely. The massive unrealized loss at treasury firm Bitmine further underscores the profound market stress.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
