Connect with us
DAPA Banner

Crypto World

Ethereum Falls Below $2,000 as Crypto Sell-Off Deepens

Published

on

ETH Chart

Bitcoin plunged under $66,000 while most altcoins cratered.

Ethereum (ETH) traded under $2,000 on Thursday, Feb. 5, for the first time since May 2025, amid a broader sell-off across crypto markets.

ETH fell about 10% over the past 24 hours to trade near $1,925, extending its weekly losses to 30%. Paul Howard, senior director at Wincent, said Ethereum’s move lower was driven by a broader shift away from risk in global markets, rather than a crypto-specific event.

ETH Chart
ETH Chart

“The defining characteristic of the sell-off was a synchronised de-risking across asset classes, marked by forced unwinds and elevated volatility even in assets typically viewed as hedges, including precious metals,” he said.

Howard also explained that the shift’s catalyst was the markets “rapidly repricing the outlook for monetary policy” following the nomination of Kevin Warsh as Federal Reserve chair.

Advertisement

Meanwhile, data from Lookonchain showed that Ethereum co-founder Vitalik Buterin has sold 2,961.5 ETH (around $6.6 million) at an average price of $2,228 over the past three days.

Bitcoin and Altcoins

Bitcoin (BTC) dropped roughly 10% on the day to around $65,700, extending its seven-day losses to nearly 21%. Among other major tokens, BNB slid 9% to $646, while XRP plunged nearly 20% to about $1.24. Solana (SOL) fell 12% on the day to trade near $82.

“Bitcoin is now testing key technical support between $60,000 and $70,000, the base of the pre-election rally. A sustained break below this range would increase the risk of a more protracted move lower, while stabilization here would point to a corrective reset rather than a structural shift,” Diana Pires, VP at sFOX, told The Defiant.

Total cryptocurrency market capitalization declined to approximately $2.33 trillion, down about 10% over the past 24 hours. Trading activity during the same period totaled roughly $259.5 billion.

Advertisement

A small number of tokens traded higher despite the broader downturn. Rain (RAIN) rose about 7% over the past 24 hours, while MYX Finance (MYX) gained 5.4%. MemeCore (M) added 1.6%.

On the downside, XRP fell more than 16%, while Zcash (ZEC) dropped 15.4%. Monero (XMR) slid nearly 14%.

Liquidations and ETF flows

More than $1.44 billion in leveraged positions were liquidated over the past 24 hours, according to CoinGlass, with long positions accounting for roughly $1.23 billion of that total.

Bitcoin recorded the largest liquidations at about $738 million, followed by Ethereum at $338 million. Solana posted liquidations of around $77 million. In total, more than 304,000 traders were liquidated on the day.

Advertisement

Spot Bitcoin ETFs recorded $544.9 million in net outflows on Feb. 4, while Ethereum ETFs saw $79.5 million in net outflows. Spot Solana ETFs recorded $6.7 million in net outflows. By contrast, spot XRP ETFs posted $4.8 million in net inflows.

Tech Selloff Continues

Elsewhere, political developments are also weighing on digital assets, driven by uncertainty in Washington as lawmakers continue to negotiate key budget and immigration measures.

Weakness in U.S. tech stocks has also placed pressure on the situation, contributing to a broader pullback across global markets.

Meanwhile, gold prices have fallen 1.3% on the day, while silver dropped more than 9%, after hitting all-time highs recently.

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Published

on

Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

Advertisement

Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

Advertisement

This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

Advertisement

It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?