Ethereum dropped below $3,600 following a major DeFi protocol hack that triggered a rapid unwinding of leveraged positions across exchanges. Traders said heightened uncertainty around smart-contract vulnerabilities contributed to the sudden sell-off, although long-term holders remained largely unchanged based on on-chain data. Market analysts noted that security lapses remain a key structural challenge for decentralized finance platforms. Despite the drop, core network activity remained steady, signaling that broader ecosystem fundamentals are intact.