Ethereum Fluctuates as Bybit Rebuilds ETH Reserves Post-Lazarus Hack

Ethereum’s price has managed to hold steady around $2,795, even though the market has been adjusting to the fallout from the $1.4 billion hack attributed to North Korea’s Lazarus Group. The attack targeted Bybit’s cold wallets, raising concerns about the security of digital assets held by exchanges. Despite the massive theft, Ethereum’s price has only seen minor fluctuations and remains significantly above its Friday low of $2,665. However, it’s still about 32% below the peak it reached last December.

In the wake of the hack, there has been a noticeable increase in Ethereum balances on Bybit, which rose sharply from 61,000 ETH to over 200,000 ETH. There are two plausible explanations for this. One possibility is that Bybit is actively purchasing Ethereum from the market to restore confidence among its users, especially since the exchange has assured that it will cover 100% of the stolen coins. Another explanation is that customers are moving their Ethereum into Bybit, believing that the exchange will manage the recovery efforts effectively. Bybit has set up a $140 million fund to trace the stolen funds and potentially return some of them to their rightful owners.

The hack, attributed to Lazarus Group—a North Korean state-sponsored hacking group—has raised serious concerns about the safety of assets stored in cold wallets, even by large and well-known exchanges. The breach has prompted many to question the vulnerability of centralized crypto exchanges and their ability to safeguard users’ assets in the event of a cyber attack of this magnitude.

From a technical analysis perspective, Ethereum is showing several signs of potential trouble. The price chart has formed a death cross pattern, which occurs when the 50-day moving average crosses below the 200-day moving average. This is considered one of the most bearish signals in technical analysis, often indicating that the market is turning in favor of sellers. Additionally, Ethereum’s price has been forming a bearish flag pattern, which is another typical continuation pattern indicating that the price could continue to decline after a period of consolidation. The flag shape, with its consolidation and subsequent downward movement, suggests that Ethereum may struggle to maintain its current support levels.

Should Ethereum continue on its bearish path, the next key support level to watch will be around $2,155. This level represents the lowest point Ethereum has reached so far this year, and a breakdown below this level could signal further downside. A 23% decline from its current position would be a significant blow to Ethereum’s market sentiment, especially in the wake of the hack and broader market challenges.

On the other hand, Ethereum’s outlook could shift dramatically if the price rises above the critical 200-day WMA level of $3,085. If Ethereum breaks above this key level, it could invalidate the bearish signals and shift the market sentiment back in favor of buyers. Such a breakout would suggest that Ethereum might be entering a recovery phase, overcoming the negative news surrounding the hack and the broader market environment.

As the situation continues to unfold, Ethereum’s price will likely be influenced not just by technical indicators, but also by the broader market sentiment and the outcome of Bybit’s efforts to recover the stolen funds. The growing concern over the safety of assets in the wake of the hack has already had a noticeable impact on the market’s mood, and Ethereum’s price could experience further volatility depending on how the situation develops in the coming days.

Investors and market participants will be watching closely as the situation develops, weighing the potential risks posed by the ongoing hack recovery efforts and the broader macroeconomic conditions that are shaping the future of Ethereum and the cryptocurrency market as a whole.