Ether's $3K Recovery: Bybit's $1.4B Hack Boosts Sentiment

Ether's recovery above the $3,000 mark following Bybit's massive $1.4 billion hack hinges on investor sentiment and a decisive break above the key psychological level. The world's second-largest cryptocurrency has been in a downtrend since peaking above $4,100 on Dec. 16, 2024, marking its highest level since December 2021.

In a positive sign for Ether's trajectory, it rose over 5.38% in the two days since Feb. 21, when Bybit exchange was hacked for over $1.4 billion worth of liquid-staked Ether (STETH) and other digital assets. Part of Ether's upside may be attributed to more spot buying pressure from Bybit, as the exchange bought over 106,498 Ether (ETH) worth $295 million in over-the-counter (OTC) trades since the exploit occurred, helping it regain nearly 50% of its pre-hack Ether supply.

The North Korean state-affiliated Lazarus Group is the primary suspect behind the $1.4 billion hack. This could mean that the cybercrime unit won't immediately sell the stolen Ether, potentially providing some relief to the market. However, it's important to note that Lazarus Group's main publicly-known wallet currently holds over $83 million worth of crypto, of which $3.68 million is Ether, according to Arkham Intelligence data.

To stage a reversal from its over two-month downtrend, Ether will need to recapture the $3,000 psychological mark. Vugar Usi Zade, chief operating officer at Bitget exchange, told Cointelegraph that a decisive move above the $2,700-$3,000 resistance zone could pave the way for further gains, especially if institutional interest and ecosystem advancements continue to strengthen.

Despite the short-term volatility, Ether's fundamental value proposition remains exceptionally strong, according to Marcin Kazmierczak, co-founder and chief operating officer of Redstone blockchain oracle solutions firm. He told Cointelegraph that fundamentals will eventually catch up to Ethereum, and the influx of institutional participants makes the long-term trajectory clear. Decreasing Ether supply on crypto exchanges is also an optimistic sign for Ether price, as Ether reserves across all exchanges fell to 18.95