Ethereum (ETH) price has recorded a 4% decline in the past 24 hours, trading below $2,650 at press time. The drop follows reports of a security breach at cryptocurrency exchange Bybit, which confirmed an unauthorized transfer of approximately 401,347 ETH, valued at $1.12 billion, from its cold wallet. The breach involved an attack that manipulated the transaction signing process, allowing the hacker to redirect funds to an unidentified address.
Bybit Hack Triggers Ethereum Price Decline
The breach at Bybit has led to heightened concerns among investors, contributing to Ethereum price decline. The attack was carried out by exploiting a vulnerability in the multisig cold wallet, altering the signing interface while keeping the displayed address unchanged. This allowed the unauthorized transfer of ETH, stETH, and other assets.
The confirmation of the hack caused an immediate market reaction, with Ethereum price dropping from $2,850 to $2,750 within an hour. The stolen funds began moving to multiple addresses, intensifying fears of further sell-offs. The movement of stolen assets to decentralized exchanges raised concerns about increased selling pressure in the market.
Following the breach, Bybit CEO Ben Zhou assured users that client funds remain safe and that all assets are backed on a one-to-one basis. However, investor sentiment remained uncertain, as the scale of the attack affected confidence in centralized exchanges.
Trading Volume Surges Amid Market Uncertainty
Alongside Ethereum price drop, trading volume surged by over 82%, reaching $29.46 billion within 24 hours. This increase suggests that traders reacted swiftly to the hack, either selling assets or repositioning portfolios in anticipation of further volatility.
Source: CMC
A rise in trading volume often signals increased market activity, with both buyers and sellers reacting to major developments. In this case, the uncertainty surrounding Bybit’s ability to recover the stolen funds contributed to the heightened trading levels. The sell-off intensified as the stolen ETH and stETH were moved, potentially indicating liquidation by the attacker.
More so, analysts note that continued selling pressure could push Ethereum toward the $2.5K support level. Further price declines may occur if the stolen funds continue to be sold on the open market.
Technical Indicators Suggest Key Resistance for ETH
Ethereum is facing a crucial resistance zone near $2.9K, which includes the 200-day moving average. Price action at this level will determine the next market direction, as failure to break above could lead to another decline.
On the 4-hour chart, Ethereum has been in a consolidation phase after breaking below a descending wedge pattern. The asset is hovering near the 0.5-0.618 Fibonacci retracement levels, a zone where sellers could exert additional pressure.
More so, the MACD has confirmed a bearish sentiment as the MACD line crossed below the signal line. The histogram also increased red bars, indicating growing downward momentum. This suggests that Ethereum may experience further price weakness in the short term.
Source: TradingView
Additional data shows that Ethereum’s OI-weighted funding rate has been declining since early January, with a sharp dip into negative territory around February 6. This suggests increased bearish sentiment and possible deleveraging in the futures market.
Meanwhile, a recent report highlighted how China’s money supply nearly doubled to 112 trillion Yuan, sparking speculation about its effect on Ethereum. Analysts suggest the impact on ETH may be minimal, but increased liquidity could still influence global risk assets.
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