FTX has launched legal action against NFT Stars Ltd. and KUROSEMI INC. (d/b/a Delysium) for failing to deliver tokens it is entitled to under contract. This step follows numerous attempts to resolve the issue without litigation. FTX plans to reach out to other token and coin issuers with outstanding assets and will file additional lawsuits against those who remain unresponsive. The company urges these parties to engage promptly to avoid further legal action.
Ethereum price plunges below $1,600 on Tuesday, with ETH conceding more ground to BTC amid multi-chain expansion and rising macro pressure. With ETH price at risk of a potential slide to multi-year lows, here are key levels traders must watch in the days ahead.
Ethereum (ETH) faces intense sell-offs a week after Trump repeals DeFi law
Ethereum (ETH) is facing increasing headwinds as its market share among Layer-1 chains continues to erode, now approaching historic lows last seen during the 2021 altcoin supercycle.
Ethereum is facing bearish headwinds this week as competition among Layer-1 chains continues to erode, ETH market share. While Ethereum price is holding above the $1,590 level at press time, key trading signals suggest ETH could be at risk of plunging towards historic lows last seen during the 2021 altcoin supercycle.
Ethereum price action | Source: Coingecko
ETH’s latest sell-off intensifies just one week after former President Donald Trump repealed a Biden-approved law, mandating DeFi platforms to adhere to stringent KYC measures required of registered brokers.
Interestingly, the abrupt rollback—aimed at curbing what Trump called “bureaucratic overreach”—has instead spooked capital, accelerating outflows from Ethereum-based protocols.
With rising competition from faster, cheaper alternatives like Solana, Avalanche, and Base, Ethereum’s share of total value locked (TVL) and network activity has declined to under 55%, down from over 70% at its peak.
Ethereum TVL plunges $12B as ecosystem demand weakens
Despite the successful rollout of Ethereum’s Dencun upgrade in March 2025, on-chain activity has remained tepid. Gas fees have stabilized at lower levels, but that has not translated into renewed demand. Daily active addresses and transaction counts are plateauing, while Ethereum L2s like Arbitrum and Optimism have absorbed increasing volume, inadvertently siphoning activity away from the base layer.
Ethereum DeFi TVL dips from $58B to $46B between March 2 to April 16, 2025 | Source: DeFiLlama
Meanwhile, capital rotation into Solana and emerging EVM-compatible ecosystems has led to a fragmentation of liquidity, diluting Ethereum’s dominance in both DeFi and NFT verticals.
According to DeFillama data, investors have withdrawn over $12 billion from Ethereum DeFi protocols since the start of March 2025.
ETH/BTC Pair Paint a Grim Picture
Ethereum’s underperformance is further highlighted in its ETH/BTC trading pair, which has now declined below the 0.02 level, a psychological threshold watched closely by strategic investors.
ETH/BTC trading pair | April 2025 | Source: TradingView
The continued strength of Bitcoin’s dominance—now hovering above 54%—suggests capital is rotating out of altcoins and into more defensive majors as positive headwinds from US inflation data subsides.
With the SEC yet to provide a regulatory model from Ethereum’s staking model, spot ETH ETF continue to face rapid outflows, as sentiment around ETH remains fragile. While US inflation eased macro pressures, investors remain jittery anticipating the impact of the US-China trade war on stock prices.
Ethereum Price Forecast: Bull counting on $1380 support
As Ethereum’s market share relative to Bitcoin near all-time lows and bullish sentiment weakens,technical indicators reveal key support levels to watch in the days ahead.
Ethereum long-term price forecast prospects remain strong due to its global developer network and media dominance, short- to medium-term price action suggests vulnerability. Unless ETH can reclaim the $2,200 level with strong volume and improve on-chain fundamentals, the downside target near $1,100 may become an increasingly realistic scenario.
Ethereum price forecast
Hovering around $1,642, ETH price is trading at 31% discount from March highs, with a potential drop to $1,100 flagged by the measured move of a bear flag breakdown. However, the RSI at 42.45 suggests ETH is near oversold territory, hinting at possible short-term support near $1,385. While the 50-, 100-, and 200-day SMAs remain in a clear bearish alignment, the current consolidation pattern shows ETH trying to stabilize.
In this scenario, a bullish Ethereum price forecast would require a breakout above $1,730. Conversely, failure to hold $1,597 risks confirming the $1,100 downside target.
The decentralized exchange Hyperliquid is facing scrutiny following its handling of the JELLY token market, raising concerns from industry leaders. Bitget CEO Gracy Chen compared Hyperliquid to the now-defunct exchange FTX after Hyperliquid’s response to unusual activity involving the JELLY token resulted in an estimated $10.6 million loss. The delisting of the token and forced settlement of open positions drew sharp reactions from the crypto community.
Bitget CEO Warns Hyperliquid May Mirror FTX Collapse
In a recent post on X, Bitget CEO Gracy Chen warned that Hyperliquid could follow a similar trajectory to FTX. Chen raised alarms over the platform’s decision to halt the trading of the JELLY token and forcefully settle open trades. According to her, this action created unfair outcomes, favoring some traders while causing losses to others.
Bitget CEO labeled Hyperliquid’s actions as immature and unethical. The forced closure followed a 230% spike in JELLY price within one hour. A $5 million short position was liquidated during this time, raising concerns about market manipulation. The situation placed Hyperliquid’s treasury at further risk, with potential exposure reportedly nearing $240 million.
Gracy Chen added,
“Unless these issues are addressed, more altcoins may be weaponized against Hyperliquid—putting it at risk of becoming the next catastrophic failure in crypto.”
A recent report highlighted how Hyperliquid Vault is at risk of losing its entire $230 million fund due to a surge in the Solana-based memecoin JELLY JELLY. The platform inherited a short position amid a short squeeze and now faces mounting pressure as the token’s price continues to climb.
Concerns Over Compliance and Risk Structure
Bitget CEO continued to criticize Hyperliquid’s lack of standard compliance practices. She pointed out the absence of Know-Your-Customer (KYC) and Anti-Money Laundering (AML) measures. Chen stated that Hyperliquid, although presenting itself as a decentralized platform, operated similarly to an offshore centralized exchange.
She added that this regulatory gap may allow illicit funds to move through the platform undetected. These concerns were echoed by others in the industry, including former BitMEX CEO Arthur Hayes. Chen also warned that if left unchecked, the model could lead to the same vulnerabilities that contributed to the collapse of FTX.
Mixed Vaults and Position Sizes Raise Risk
The Bitget CEO highlighted structural concerns with the platform’s product design. She noted that the use of mixed vaults exposed users to shared risks. According to Chen, this could allow the actions of a few traders to affect all users on the platform.
The JELLY token’s sharp price rise triggered emergency action from the exchange’s validator set. The platform cited suspicious market activity as the reason for delisting the token. However, the decision to settle trades at a specific price led to a backlash from affected traders.
Bitget CEO described the settlement approach as a dangerous precedent. She stressed that trust, not just capital, is essential for the success of any exchange. Without addressing these vulnerabilities, Chen warned that Hyperliquid could face further threats from manipulated markets.
Meanwhile, FTX bankruptcy case expenses reached nearly $1 billion, with legal and advisory firms receiving substantial payouts. Court records show that Sullivan & Cromwell LLP alone has earned over $248 million for handling the proceedings.
