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Ethereum Price Drops 4% After $1.12B Bybit Hack: Key Market Insights

Arslan Butt•Saturday, February 22, 2025•2 min read
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Ethereum (ETH) price has tumbled 4% in the past 24 hours, trading below $2,650 following a massive security breach at cryptocurrency exchange Bybit.

The incident involved the unauthorized transfer of approximately 401,347 ETH, valued at $1.12 billion, from Bybit’s cold wallet.

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The attack exploited a vulnerability in the multisig wallet, allowing hackers to alter transaction-signing mechanisms while keeping the displayed address unchanged. As a result, funds were redirected to unidentified addresses, triggering panic across the market.

  • Ethereum price plummeted from $2,850 to $2,750 within an hour.

  • Stolen ETH has been traced to multiple wallets, raising concerns over imminent sell-offs.

  • Bybit CEO Ben Zhou assured users that customer assets remain secure, yet investor sentiment remains shaky.

Despite Bybit’s reassurances, trust in centralized exchanges has weakened, exacerbating bearish pressure on Ethereum.

Ethereum Trading Volume Soars 82% Amid Panic

The market reaction to the Bybit hack was immediate, with Ethereum’s 24-hour trading volume spiking by 82% to $29.46 billion. This surge indicates heightened activity as traders react to the uncertainty.

A surge in trading volume often signals increased market volatility, with both buyers and sellers actively adjusting their positions. In this case, the sell-off intensified as stolen ETH and stETH were moved, fueling speculation of forced liquidation.

  • Increased on-chain activity suggests potential large-scale liquidations.

  • Whale movements indicate that institutional investors are closely monitoring the situation.

  • If selling pressure persists, Ethereum could test the $2,500 support level.

Market analysts caution that if Bybit fails to recover the stolen assets, further downside risks could emerge for Ethereum.

Technical Indicators Show Bearish Momentum

Ethereum now faces key resistance at $2,900, aligning with the 200-day moving average. Failure to reclaim this level could result in further declines.

Ethereum Price Chart – Source: Tradingview

Technical indicators reflect increasing bearish sentiment:

  • Descending Wedge Breakout: Ethereum recently broke below a descending wedge pattern, signaling a continuation of the downtrend.

  • Fibonacci Levels: ETH is hovering around the 0.5-0.618 Fibonacci retracement zone, often a critical level for trend reversals.

  • MACD Confirmation: The MACD line crossed below the signal line, with increasing red bars on the histogram, confirming downward momentum.

Additionally, Ethereum’s OI-weighted funding rate has dropped sharply into negative territory, indicating a shift toward bearish sentiment in futures markets. If this trend persists, Ethereum’s short-term outlook remains bleak.

Final Thoughts

The Bybit hack has triggered significant uncertainty, leading to Ethereum’s 4% decline and a sharp rise in trading volume. With stolen funds still in motion and technical indicators signaling further downside risk, Ethereum’s path forward remains uncertain. Investors should closely monitor resistance levels and whale movements for further market direction.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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