Ethereum dropped to $1,540 on Friday, June 6, 2026, its lowest in 13 months. The price stands 67% below the August 2025 all-time high. Two separate catalysts hit in a single session. Stronger-than-expected US jobs data pushed back Federal Reserve rate cut expectations, while panic over a Zcash vulnerability spread fear across Ethereum DeFi protocols. Over 5 days, forced liquidations removed $1.28 billion from bullish ETH positions.
NFP Beat Expectations, Delaying Fed Rate Cuts
On the morning of June 6, the US Department of Labor released the May Non-Farm Payrolls report. The actual figure came in well above market expectations. Such data reduce the probability of a first Fed rate cut in 2026 and push the first move to Q4 at the earliest. A strong labor market signals that inflationary pressure persists and gives the Fed less reason to ease monetary policy. Risk assets sold off broadly.
Bitcoin broke below $60,000 for the first time in months. Ethereum accelerated its decline and dropped below $1,600 within hours, reaching a session low of $1,540. ETH's correlation to BTC downside consistently exceeds its correlation to BTC upside. The June 6 session confirmed this pattern once more.
Compared to similar macro shocks in prior quarters, the market reaction was sharper. The reason is straightforward. Heading into the report, the market was overloaded with long exposure, so position unwinding amplified the move.
Zcash Vulnerability Spread Contagion to ZK Protocols
On May 29, a critical vulnerability in Zcash's Orchard shielded pool was publicly disclosed. The bug, found by an Anthropic AI model, allowed unlimited and undetectable ZEC minting. The flaw had gone unnoticed since 2022 despite multiple audits. That discovery led traders to suspect similar hidden risks in other protocols using zero-knowledge proofs.
Contagion reached Ethereum, whose DeFi ecosystem relies heavily on ZK solutions. Analysts estimate that more than half of new protocols launched on Ethereum in 2025-2026 use ZK components for scaling or privacy. Capital outflows from protocols accelerated after the details went public. April's hack data reinforced the negative backdrop: $630 million was stolen across crypto protocols, with KelpDAO ($293M) and Drift Protocol ($280M) accounting for 82% of monthly losses across 25 protocols on Ethereum, Solana, Base, BNB Chain, Sui, and PulseChain.
Derivatives Signal Bear Control
ETH perpetual futures funding rate flipped negative on Friday. According to Laevitas, excess demand for short positions has persisted for several consecutive days. A negative funding rate means traders pay a premium to hold short, not long. Bears hold firm control of the derivatives market.
On Deribit, the put-call ratio jumped to 3.7x. For every call option there are 3.7 puts. Excess demand for downside protection has held since Monday. More than $500 million in long ETH positions were force-closed in 48 hours, leaving no technical base for a bounce.
Compared to ETH at similar price levels in February 2024, the current derivatives picture is worse. At that time, funding rate stayed positive even below $1,600, and the put-call ratio did not exceed 2x. Current readings are more bearish than any comparable price point in the prior cycle. The combination of negative funding rate and put-call above 3x was last seen in ETH during November 2022, when the price continued to fall for several more weeks.
Ethereum TVL Drops to February 2024 Lows
Ethereum's total value locked fell to February 2024 levels. A smaller capital base in protocols cuts DApp revenue and reduces ETH demand for gas payments and collateral. Selling pressure intensifies through the operational channel, not just derivatives.
The steepest TVL declines hit Spark Protocol (50%), Ether.fi (49%), EigenCloud (41%), and KernelDAO (39%). Part of the exodus reflects fears of ZK-type vulnerabilities following the Zcash incident. Protocols on Solana, Base, and BNB Chain also saw outflows, though smaller in scale. According to DefiLlama, combined TVL across all networks dropped to early 2024 levels, marking one of the largest quarterly capital contractions in DeFi on record.
Bitmine: 4.5% of All ETH, $10.5B Unrealized Loss
Bitmine (BMNR), the largest corporate Ethereum treasury company, holds 4.5% of all ETH in circulation. At current prices, the unrealized loss has crossed $10.5 billion. The strategy mirrors Strategy's (MSTR) Bitcoin playbook, but ETH carries higher volatility and lower liquidity. The risks at this scale of exposure are objectively greater.
Bitmine announced a preferred share offering carrying a 9.5% dividend to raise fresh capital for additional ETH purchases. The market reacted with skepticism. BMNR shares traded at a notable discount to book value. Raising capital against a $10.5 billion paper loss reads as a bet on recovery, not on current cores.
Glassnode Signal and What Comes Next
Glassnode data shows only 30% of ETH supply is currently in profit relative to the price when those coins last moved. This level has dropped below 30% only twice before. In December 2019, before a 118% rally in 60 days. And in March 2020, during the COVID crash, after which the market also recovered quickly. Bulls point to these precedents as a contrarian buy signal.
There is a key difference this time, though. Neither of those prior episodes came alongside $630 million in monthly DeFi hacks and the discovery of systemic vulnerabilities in core protocol infrastructure. The market is pricing not just ETH's level, but the reliability of the infrastructure itself. A 30% profitable supply reading during a wave of hacks looks different from the same reading in the clean markets of 2019-2020.
CoinTelegraph analysts cite the $1,400-1,450 range as the next technical target if current conditions persist. A reversal requires a clear Fed signal on rate cut timing and a recovery in DeFi confidence after the string of hacks. A $2.6 billion short squeeze building in Bitcoin could provide a short-term spark for the broader market. But ETH has consistently recovered more slowly than Bitcoin at every corrective episode of the current cycle. Those looking to exchange Ethereum for hryvnia at current levels should know that both on-chain and derivatives markets have yet to show a clear bottom signal.
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