.png){kind=logo}
Ethereum came under heavy selling pressure on Friday as weakness spread across the crypto market. According to Lookonchain, Ether fell below $1,600 and touched a 13-month low near $1,540, while Bitcoin dropped under $60,000 for the first time in months.
The decline followed a sharp shift in trader positioning, fresh concerns over a Zcash vulnerability, and rising liquidation risk across Ethereum DeFi protocols. With several large liquidation levels now close to market prices, traders are watching whether ETH can avoid a deeper move below $1,500.
Ether derivatives showed a clear change in market positioning after the sell-off. The ETH perpetual futures annualized funding rate turned negative on Friday, pointing to stronger demand for short positions.
That shift came after heavy losses among leveraged traders. Market data showed that more than $1.28 billion in leveraged ETH long positions were liquidated over five days, cutting off an attempted relief bounce.
Options traders also moved toward downside protection. The Deribit ETH options put-to-call premium climbed to 3.7 times on Friday, showing higher demand for put options than call options.
The bearish positioning developed while ETH traded 67% below its August 2025 all-time high. Even so, buyers showed little confidence as Bitcoin’s break below $60,000 added pressure across major crypto assets.
A critical bug in Zcash added another layer of concern for traders already facing weak market conditions. The vulnerability reportedly allowed unlimited ZEC minting in the largest Zcash zero-knowledge pool.
The flaw was found on May 29 using Anthropic’s Opus 4.8 AI model. Reports said the bug had existed since 2022 before its detection, which raised questions about whether other blockchain systems could face similar hidden risks.
ALSO READ: Crypto News Today: Zcash Crashes as Orchard Vulnerability Sparks Supply Integrity Fears
Ethereum’s DeFi sector was already under pressure before the latest liquidation wave. Total value locked on the Ethereum network fell to its lowest level since February 2024, according to market data.
Several major decentralized applications recorded steep drops in deposits. Spark, Ether.fi, EigenCloud, and KernelDAO were among the protocols that saw large TVL declines during the broader market retreat.
Lower deposits can reduce activity across decentralized applications. Meanwhile, recent hacks across multiple networks have kept investors cautious, especially as security risks remain a central concern for DeFi users.
Lookonchain first warned that 343,075 ETH, worth about $547 million, was at risk of liquidation across DeFi protocols. The post listed key liquidation levels near ETH’s falling market price.
46,741 ETH faced liquidation at $1,565.72 on Maker, while 58,032 ETH was at risk at $1,555.04 on AAVE V3. Maker also held larger clusters of 100,394 ETH at $1,426.31 and 137,908 ETH at $1,361.73.
After the warning, ETH dropped below $1,550. Lookonchain later reported that 21,540 ETH, worth about $34.1 million, had already been liquidated across DeFi protocols.
The largest remaining cluster sits at $1,361.73. Traders are now watching whether ETH moves closer to the $1,300 support zone.
Lookonchain also reported movement from a wallet linked to Ethereum co-founder Joseph Lubin. The post asked, 'Is Ethereum co-founder Joseph Lubin preparing to dump ETH?'
According to the shared data, the wallet held 243,300 ETH worth about $370 million. It later transferred out 80,001 ETH worth about $121.6 million after more than three years of inactivity.
The transfer drew attention as it came during a weak market session. However, the movement alone does not confirm a sale. Large wallet transfers can involve custody changes, DeFi activity, internal restructuring, or preparation for future transactions.
Meanwhile, Ethereum’s chart showed added weakness after ETH broke below its ascending channel. Price also moved beneath a high-volume zone that had previously acted as support.
With major DeFi liquidation levels still sitting above $1,300, Ethereum remains under pressure. A further decline could place more collateral at risk if forced selling continues across lending protocols.
