Following the historic $1.4 billion breach of Bybit, the fate of Ethereum’s future trajectory, specifically its ability to surge back above the crucial $3,000 mark, depends largely on investor sentiment. The second largest cryptocurrency in the world has been on a downward spiral since it peaked over $4,100 on December 16, 2024, the highest since December 2021, as per TradingView data.
In a promising development for Ethereum, it gained more than 5.38% in the two days following February 21, the day Bybit was hacked, resulting in more than $1.4 billion in liquid-staked Ethereum (STETH) and other digital assets being stolen. This marks the biggest cryptocurrency theft in recorded history.
Ethereum’s rise may be partially credited to Bybit’s increased spot buying pressure, with the exchange purchasing over 106,498 Ethereum (ETH) worth $295 million in over-the-counter (OTC) trades after the hack, helping it recover almost half of its Ethereum supply prior to the hack.
Suspicions point to the North Korean Lazarus Group as the primary perpetrator of the $1.4 billion heist, indicating that the cybercrime unit might not immediately offload the stolen Ethereum. Currently, the Lazarus Group’s most well-known wallet holds over $83 million in cryptocurrencies, including $3.68 million in Ethereum, according to data from Arkham Intelligence.
This figure represents a minor portion of the estimated $1.34 billion worth of cryptocurrencies pilfered by North Korean hackers last year, accounting for 61% of all crypto thefts in 2024, as stated by Chainalysis data.
For Ethereum to reverse its falling trend of over two months, it must decisively cross the $3,000 threshold, says Vugar Usi Zade, chief operating officer at Bitget exchange. He explains, “While a clear breakout is yet to be seen, a decisive surpassing of the $2,700-$3,000 resistance area could set the stage for increased gains.”
Even amidst the short-term volatility, Ethereum’s basic value proposition remains “extremely robust,” says Marcin Kazmierczak, co-founder and COO of Redstone blockchain oracle solutions company. He believes that Ethereum’s fundamentals will eventually align with its market performance.
The declining Ethereum reserve on cryptocurrency exchanges is a positive sign for its price, adds Kazmierczak. Data from CryptoQuant indicates that Ethereum reserves on all exchanges dropped to 18.95 million on February 18, the lowest since July 2016 when Ethereum was trading at around $14.
However, Ethereum faces considerable resistance above the $2,900 and $3,000 mark. A potential rally above $3,000 could lead to over $623 million in leveraged short liquidations across all exchanges, as per CoinGlass data.
