Ether experienced a sharp decline on Monday, plunging as much as 9% and breaking below the key $3,600 support threshold following reports of a multimillion-dollar hack on a protocol within the Ethereum network.

According to data from CoinMetrics, the cryptocurrency—native to the Ethereum blockchain—was last trading at around $3,600, marking a 6.6% drop for the day and leaving it roughly 25% below its recent high of $4,885 recorded on August 22.

The sudden downturn came after the decentralized finance (DeFi) platform Balancer, built on Ethereum, suffered a major exploit estimated to have resulted in losses exceeding $100 million. The incident adds to a growing list of negative developments that have fueled investor unease across the digital asset market in recent weeks.

Adding to the turbulence, mid-October saw U.S. President Donald Trump announce plans for “massive” tariffs on China in response to restrictions on rare earth exports. The statement prompted investors to retreat from volatile cryptocurrencies and seek safety in traditional assets such as gold. Although Trump later softened his stance, the initial announcement triggered a wave of panic selling that led to widespread liquidations of highly leveraged crypto positions.

Investor sentiment was further dampened last week after Federal Reserve Chair Jerome Powell warned against expecting imminent rate cuts. His remarks reinforced a cautious mood among traders already wary of tightening liquidity and macroeconomic uncertainty.

“These developments have left investors on edge as we move into November,” said Juan Leon, senior investment strategist at Bitwise, in an interview with CNBC. “Despite the short-term volatility, this recent market correction can be viewed as a healthy, though abrupt, de-leveraging phase that cleared out speculative excess.”

The weakness in crypto prices also rippled into the stock market, hitting companies with close ties to digital assets. Shares of Coinbase dropped nearly 4%, while Bitcoin treasury firm Strategy fell by more than 1%, reflecting broader pressure across the crypto ecosystem.

The latest setbacks underscore how vulnerable the digital asset market remains to both macroeconomic uncertainty and internal network risks. As investors reassess their exposure ahead of year-end, the coming weeks may prove critical in determining whether Ethereum and other major cryptocurrencies can stabilize after a volatile October.