Ether hits $1,540 as BTC breaks $60K and ETH hedging spikes

Ether slid below $1,600 and printed a 13-month low of $1,540 on Friday as Bitcoin dipped under $60,000 and the broader tape turned risk-off. ETH derivatives flipped decisively defensive, with negative perpetual funding, a 3.7x put-to-call premium spike, and $1.28 billion in long liquidations compressing any near-term bounce.

Key Takeaways

Ether traded below $1,600 and tagged $1,540 on Friday, its lowest level in 13 months.
Bitcoin fell under $60,000 in the same selloff, tightening liquidity across majors at the same time.
ETH positioning turned defensive as perpetual futures funding flipped negative and Deribit’s put-to-call premium jumped to 3.7x.
Ethereum DeFi TVL dropped to its lowest level since February 2024, with sharp drawdowns across several large protocols.

ETH Breaks $1,600 as BTC Slips Under $60K

ETH’s break of $1,600 mattered because it was not an isolated alt move. Ether hit $1,540 on Friday (June 5, 2026), a 13-month low, while Bitcoin traded below $60,000 for the first time in months. When BTC loses a major handle during a fast tape, ETH rarely gets to trade its own story.

The broader context is that ETH was already deep offside versus prior highs. At the time of the move, ETH was described as 67% below its August 2025 all-time high. That matters for market structure because it changes who is left holding risk. Late-cycle buyers tend to be gone, and the marginal flow becomes hedging, de-risking, and forced selling.

What stands out is how quickly the market moved from “weak” to “stressed.” The price action set the stage, but the real tell was how derivatives and DeFi activity proxies deteriorated alongside it.

Derivatives Flip: Negative Funding, 3.7x Put Skew, and the Liquidation Cascade

ETH perpetual futures annualized funding flipped negative on Friday, per Laevitas charting. Funding is the periodic payment between longs and shorts to keep perpetual positions open. When it turns negative, shorts are effectively being paid by longs, which is a clean signal that traders are leaning into short exposure or paying up to stay hedged.

Options confirmed the same posture. Deribit’s ETH options put-to-call premium spiked to 3.7x on Friday, also via Laevitas, and the indicator had shown excess demand for puts since Monday. Put demand rising ahead of the low is usually not “smart money calling the bottom.” It is the market paying for convexity into downside, which often keeps spot under pressure because dealers and hedgers are managing risk dynamically as price falls.

Then came the accelerant. Over the past five days, $1.28 billion in leveraged ETH longs were liquidated, including more than $500 million in the last 48 hours. The source framed the impact bluntly: “With over $500 million in leveraged ETH long positions liquidated in 48 hours, there are no signs of a relief bounce.”

Liquidations are not just a statistic. They are forced market orders into a falling book. In a fast drawdown, that flow can overwhelm passive bids and turn what might have been a controlled selloff into a cascade. The positioning read here is consistent with that: negative funding (short demand), elevated put premia (downside hedging), and large liquidation prints (forced selling) all pointing the same direction.

One more overhang was raised, but it comes with a verification gap. The article states the largest Ethereum treasury firm, Bitmine (BMNR US), holds 4.5% of the entire ETH supply and is sitting on a $10.5 billion unrealized loss. If accurate, that is the kind of concentrated balance-sheet exposure traders watch for forced-selling risk. This packet does not provide corroboration beyond the single source, so it should be treated as a flagged risk factor rather than a settled fact.

Zcash Infinite-Mint Vulnerability Adds Cross-Chain Contagion Fear

Risk-off tapes do not need a single cause, but they do tend to latch onto narratives that justify de-risking. A critical Zcash vulnerability allowing unlimited ZEC minting in the largest Zcash zero-knowledge pool was found on May 29, and the discovery was made using Anthropic’s Opus 4.8 AI model. The source quote is explicit: “The bug was found on May 29 using the Opus 4.8 AI model from Anthropic.”

The more destabilizing detail is the timeline. The bug reportedly existed since 2022 without detection. That is why it matters beyond ZEC. A long-lived, inflationary vulnerability in a shielded pool hits the market’s confidence in what it cannot easily observe, and it arrives at a time when traders are already primed to punish protocol risk.

That sensitivity was elevated after April’s hack losses. Cryptocurrency hacks totaled $630 million in April, with KelpDAO’s $293 million hack and Drift Protocol’s $280 million exploit accounting for 82% of losses across 25 protocols. The incidents spanned multiple networks, including Ethereum, Solana, Base, BNB Chain, Sui and PulseChain.

There is an important uncertainty to keep straight. This packet does not show direct flow evidence that the Zcash headline caused measurable capital flight from Ethereum smart contracts. The cleaner claim is sentiment linkage: a fresh, high-severity security story can raise the market’s discount rate on DeFi and smart-contract exposure when positioning is already fragile.

Signals Traders Are Watching After the Flush

The immediate question after a liquidation-driven move is whether the market has actually reset positioning, or whether it has only started the process.

First, funding. Traders will be watching whether ETH perpetual funding stays negative after the $1,540 low or flips back positive, per Laevitas. A persistent negative print would suggest shorts are still in demand and that any bounce is being sold or hedged.

Second, the options market’s temperature. The 3.7x Deribit put-to-call premium spike is the kind of extreme that can mean either panic hedging that fades quickly or a sustained bid for protection. The key is whether the “excess demand for puts” signal continues into next week, again per Laevitas.

Third, liquidation intensity. The market just absorbed more than $500 million of long liquidations in 48 hours. The next 24 to 72 hours matter because a slowdown would imply forced selling is abating, while another wave at a similar pace would argue the deleveraging is not done.

Fourth, Ethereum DeFi TVL. DefiLlama data showed Ethereum TVL at its lowest level since February 2024, with major contractions in Spark (-50%), Ether.fi (-49%), EigenCloud (-41%), and KernelDAO (-39%). Stabilization would be a sentiment release valve. Continued declines would reinforce the idea that risk appetite is still leaking out of the ETH DeFi stack.

One more stress gauge sits in the background. Glassnode data showed: “Currently, only 30% of the ETH supply is profitable relative to when those coins were last moved.” The source compared similar conditions to mid-March 2020 and mid-December 2019, with the latter preceding a 118% rally within 60 days. That is not a forecast. It is context for how historically compressed profitability can coincide with capitulation dynamics.

When Put Demand Leads and Funding Turns, Bounces Usually Need a Catalyst

I read this move as positioning-led stress layered on top of a weak spot tape. ETH didn’t just drift lower. It broke to $1,540 while funding flipped negative and put premia blew out to 3.7x. That combination tells me traders were paying for downside exposure and protection as the low printed, not after the fact.

The liquidation numbers make the flow mechanics hard to ignore. $1.28 billion of leveraged long liquidations in five days, with $500 million in 48 hours, is the kind of forced selling that can flatten bids and keep price pinned. When that is happening, “support” levels are less about technical lines and more about whether the market has finished closing positions it can no longer carry.

The Zcash vulnerability headline fits the tape as a sentiment accelerant. A bug that reportedly sat undetected since 2022, and that enables unlimited minting in a major shielded pool, is exactly the kind of story that widens risk premia across chains. It does not need to directly drain Ethereum TVL to matter. It just needs to make traders more willing to pay for puts and more reluctant to warehouse DeFi risk, especially after April’s $630 million hack month.

From here, I’m framing three scenarios with clear confirmation points.

Scenario one is stabilization through positioning repair. Confirmation would look like ETH funding moving back toward positive, the put-to-call premium cooling from the 3.7x spike, and liquidation prints slowing materially versus the prior $500 million per 48 hours pace. In that setup, the market is signaling that the forced sellers are mostly done and hedging demand is easing.

Scenario two is a grind lower driven by persistent hedging demand. Confirmation would be funding staying negative while the “excess demand for puts” signal persists into next week. That would tell me the market is still paying to stay short or protected, which typically caps upside attempts.

Scenario three is renewed stress via another liquidation wave. Confirmation would be liquidation intensity re-accelerating in the next 24 to 72 hours while DeFi TVL continues to make new lows versus the February 2024 floor. That combination would argue the deleveraging is feeding back into ecosystem risk appetite.

The core thesis is simple: this was not just spot weakness, it was a derivatives-led de-risking event, and it will only look finished when funding normalizes and the put bid fades at the same time liquidation pressure cools.

Ether hits $1,540 as BTC breaks $60K and ETH hedging spikes to 3.7x put premium