JAKARTA – Ethereum fell by as much as 9% during Monday’s trading, breaking a key support level at US$3,600.
The sharp decline, reported by cnbc.com (5 November), followed a cyberattack worth hundreds of millions of dollars targeting Balancer, an ethereum-based decentralised finance (DeFi) protocol.
According to CoinMetrics data, Ethereum’s price was last down 6.6% around US$3,600, approximately 25% below its yearly high of US$4,885 recorded on 22 August.
The Balancer incident adds to a series of negative developments that have weighed on crypto market sentiment in recent weeks.
In mid-October, US President Donald Trump announced major tariffs on China over restrictions on rare earth exports, prompting a brief flight of capital from crypto into safe-haven assets like gold. Although Trump later softened his stance, a wave of selling had already hit highly leveraged positions.
Last week, Federal Reserve Chair Jerome Powell also warned investors not to expect interest rate cuts in the near term, further dampening risk appetite.
“This string of events has left investors cautious heading into November,” said Juan Leon, Chief Investment Strategist at Bitwise, speaking to CNBC. “Although macro volatility remains high, October’s sharp correction was actually a healthy deleveraging process that cleared excessive speculation from the market.”
Digital asset-related stocks also came under pressure, with coinbase falling nearly 4% and microstrategy down more than 1%.
What is Balancer? Balancer is a DeFi protocol that functions as an automated market maker (AMM) — a type of decentralised exchange that allows users to swap tokens and provide liquidity to pools in exchange for yield. The platform is known for supporting multi-asset liquidity pools (more than two tokens in a single pool).
Balancer’s algorithm automatically maintains portfolio balance and integrates with numerous tokens across the ethereum ecosystem.
Prior to the incident, Balancer ranked among the top 10 DeFi protocols by total value locked (TVL).
How did hackers attack Balancer?
According to preliminary analysis by blockchain researchers, as cited by decrypt.co (5 November), the breach occurred due to a vulnerability in specific smart contracts managing liquidity pools. This flaw allowed price manipulation and exploitation of internal pool logic, enabling attackers to illegally extract funds from several pools.
The attackers used a flash loan exploit an instant, unsecured crypto loan repaid within a single transaction to maximise the value of assets withdrawn before the system could detect anomalies. As a result, over US$100 million in digital assets were reportedly drained from multiple Balancer pools.
Balancer’s developers stated that the exploit has been contained, though some assets remain at risk if not promptly moved to secure pools. (DK/LM)
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