A major security breach at cryptocurrency exchange Bybit has sent shockwaves through the market, with over $1.46 billion in ETH stolen. This incident ranks among the largest crypto hacks in history. As the stolen assets are liquidated, Ethereum's price has plummeted by 5%, affecting key technical indicators.
Speculation is growing that Bybit may initiate a market buyback to compensate affected users, which could generate significant buying pressure. However, with the situation still developing, Ethereum's price action remains uncertain in the coming days.
Could the Bybit Hack Trigger a Major Buyback?
Earlier today, Bybit, one of the world's largest cryptocurrency exchanges, suffered a devastating security breach. Hackers made off with over $1.46 billion worth of Ethereum from the exchange's hot wallets, marking one of the most significant security failures in cryptocurrency history.
CEO Ben Zhou confirmed that attackers compromised Bybit's security systems by tricking wallet signers into approving changes to smart contract logic. This manipulation granted the hackers control over the assets.
The stolen ETH is now being liquidated on various platforms, causing Ethereum's price to drop more than 4%. Following the theft, the hacker's address began transferring funds to dozens of different wallets.
Some analysts suggest that if Bybit cannot recover the stolen $1.5 billion, they might initiate a market buyback of ETH to maintain user funds. This action could create substantial bullish buying pressure. However, whether this will happen—and when—remains uncertain as Bybit's next steps are still unfolding.
Recently, Arkham Intelligence reported that a Bybit cold wallet transferred over $500 million to another Bybit wallet, suggesting the exchange might be preparing funds for user compensation.
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Technical Indicators Show Hack Impact on Ethereum Price
The Bybit hack has immediately impacted Ethereum's technical indicators. The Relative Strength Index (RSI) dropped sharply from 62.8 to 51.6 within hours of the news breaking.
This dramatic decline indicates a sudden loss of buying momentum, reflecting increased selling pressure from the liquidation of stolen ETH. Although the RSI remains above the neutral 50 level, the sharp drop suggests bullish sentiment has significantly weakened.
With ETH's RSI at 51.6, it remains in neutral territory, indicating balanced buying and selling pressure. Notably, Ethereum's RSI has been in neutral territory since February 3, reflecting a period of consolidation and market indecision.
If the RSI falls below 50, it could signal bearish momentum, while a rise above 60 would indicate renewed buying interest.
Ethereum's Directional Movement Index (DMI) chart shows the Average Directional Index (ADX) currently at 14.9, indicating weak trend strength.
Meanwhile, the +DI has declined from 29.6 to 20.94, showing decreased buying pressure since the Bybit hack. Conversely, the -DI has risen from 11.3 to 16.3, indicating increased selling pressure as the stolen Ethereum is liquidated.
This shift suggests changing market sentiment, with sellers gaining more control over price action. The ADX measures trend strength, with values below 20 indicating weak or non-existent trends regardless of direction. The declining +DI and rising -DI suggest bullish momentum is fading while bearish pressure is increasing.
With ADX remaining low, ETH will likely continue in a consolidation phase without strong directional movement. However, if the -DI continues rising above the +DI, Ethereum could face increased selling pressure leading to further price declines.
How Will Ethereum Markets Change After the Hack?
If liquidations continue or user confidence weakens due to the Bybit incident, ETH could soon test the $2,551 support level. A break below this level might trigger a decline toward $2,160, indicating increased selling pressure.
Conversely, if Bybit manages to recover the stolen assets or significant buying pressure emerges, the ETH price could test the $3,020 resistance level. Breaking above this level could push the price toward $3,442, which would mark the highest point since late January.
The market will closely watch several factors in the coming days:
- The pace of stolen fund liquidations
- Bybit's official response and compensation plans
- Overall market sentiment toward exchange security
- Broader cryptocurrency market conditions
Frequently Asked Questions
What happened in the Bybit hack?
Hackers compromised Bybit's security systems and stole over $1.46 billion worth of Ethereum from the exchange's hot wallets. The attackers tricked wallet signers into approving changes to smart contract logic, granting them control over the assets.
How has the hack affected Ethereum's price?
The liquidation of stolen ETH has created significant selling pressure, causing Ethereum's price to drop approximately 5%. Technical indicators show weakened buying momentum and increased selling pressure.
What is a market buyback and could it happen?
A market buyback involves Bybit purchasing ETH from open markets to compensate users for lost funds. This would create buying pressure that could support ETH prices. Evidence suggests Bybit may be preparing funds for such action.
What key support levels should traders watch?
The $2,551 level represents immediate support. If broken, ETH could decline toward $2,160. Resistance sits at $3,020, with a breakthrough potentially targeting $3,442.
How are technical indicators affected?
The RSI dropped from 62.8 to 51.6, indicating reduced buying momentum. The Directional Movement Index shows increased selling pressure with -DI rising and +DI declining while ADX remains low, suggesting weak trend strength.
Should investors be concerned about exchange security?
While individual exchange hacks don't directly affect blockchain security, they can impact market sentiment and price action. 👉 Explore security best practices for protecting your digital assets across different platforms.
The coming days will be crucial for understanding the full impact of this security breach on Ethereum's price trajectory and market sentiment. Traders should monitor technical indicators closely while watching for developments regarding Bybit's response to the incident.