Ethereum Plummets After $1.5B Bybit Hack, Fed Policy Adds Pressure

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been experiencing a significant downturn in recent weeks, with no signs of recovery in sight. The coin has plummeted drastically, even falling below the $2,500 mark following a massive hacking incident at the cryptocurrency exchange Bybit, where approximately $1.5 billion worth of crypto assets were stolen. Reports suggest that the attack was carried out by a North Korean state-sponsored group known as the Lazarus Group.

The hack instantaneously triggered a 25% crash in ETH's price, leading experts like Benjamin Cowen to predict that the token could potentially fall below the $1,000 mark. Currently, the price of ETH shows no signs of slowing down, having already breached several major support levels. This suggests that the token may continue to drop, as it has not yet found a bottom.

While the general sentiment surrounding ETH's price drop is one of panic, many believe that this is part of a broader market sentiment. Some even point to massive falls in April and August 2024 as evidence that ETH's price boom is just around the corner. However, this time, a swift recovery may not be in the cards.

The US Federal Reserve's monetary policy is also believed to be affecting ETH's pricing. The Fed controls the amount of money flowing into the economy, and there are no signs of any positive stimuli. If the Fed maintains its current stance on tightening, Ethereum could potentially drop below $1,500, possibly testing $1,200 or even lower before stabilizing.

TraderPA, a prominent cryptocurrency trader, believes that ETH is currently oversold and standing at a crucial support level. If the token remains above the $2k mark, there could be some positive price movement, potentially pushing the token as high as $3.5k to $4k. However, if selling pressure continues, the outcome could be different.