Ether falls 7% following a multimillion dollar hack of a decentralized finance protocol

Ether experienced a significant decline of up to 9% on Monday, falling below the crucial $3,600 support level following a hack that impacted a protocol on the Ethereum network.

The cryptocurrency, which is the native token of the Ethereum blockchain, was trading at around $3,600, marking a 6.6% decrease from its previous levels, according to CoinMetrics data. This drop comes after Ether reached a high of $4,885 on August 22, representing a decrease of approximately 25%.

The hack targeted Balancer, a decentralized finance protocol built on Ethereum, resulting in a potential loss of over $100 million. This incident adds to a string of negative events that have unsettled digital asset investors in recent weeks.

In mid-October, concerns over trade tensions between the US and China led to a flight from crypto to traditional safe-haven assets like gold, following President Donald Trump’s announcement of tariffs on Chinese rare earth exports. Subsequently, Federal Reserve Chair Jerome Powell’s comments on future rate cuts further exacerbated market pessimism.

Commenting on the current market volatility, Juan Leon, senior investment strategist at Bitwise, stated, “These events have left investors on edge as we enter November. Despite macroeconomic uncertainties, the sharp de-leveraging in October appears to have removed speculative excess from the market.”

Additionally, stocks associated with digital assets are facing pressure, with Coinbase shares declining by nearly 4% and Bitcoin treasury firm Strategy dropping more than 1%.