Ethereum (ETH) Price Struggles for Direction Following Bybit Hack Fallout

Key Takeaways

• Ethereum (ETH) has fallen by 35% since December 2024.
• The Ethereum price follows an ascending support trend line.
• Can ETH bounce above the $2,500 support, or will it break down?

Ethereum’s price has recovered admirably since falling to a low of $2,125 on Feb. 3. The movement has been contained inside a parallel channel in the past two weeks.

While ETH started to mount a breakout on Feb. 21, the breach of a cold wallet in the Bybit exchange caused losses of $1.5 billion, creating a bearish sentiment in the market and leading to a price decline. This was the largest cryptocurrency hack in history.

Nevertheless, Bybit’s CEO Ben Chou confirmed that it has closed the deficits and vowed to publish an audited Proof-of-Reserves soon.

North Korean hacker group Lazarus is assumed to be behind the Ethereum breach, more specifically, hacker Park Jin Hyok

With that in mind, let’s look at the ETH price movement since the Bybit hack and see where it is heading.

Ethereum Holds Above Support

The weekly time frame chart shows that ETH has fallen by 35% since its cycle high of $4,107 in December. The decline was preceded by bearish divergences in the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD), often leading to bearish trend reversals.

The fact that the divergences are present in the weekly time frame does not bode well for the long-term trend.

The ETH price drop led to a low of $2,125 on Feb.3 (black icon), validating a long-term ascending support trend line that has existed since June 2022.

Afterward, ETH bounced and closed above the $2,500 horizontal support area,  which is key for the future trend.

While the price action shows some bullish signs, the bearishness of the indicators cannot be ignored, especially since the RSI and MACD have fallen below 50 and 0 after the divergences.

As a result, Ethereum’s weekly chart leans bearish, supporting a breakdown below the trend line. If that happens, the ETH price could decline to $1,150.

What’s Next for Ethereum?

While the weekly chart is decisively bearish, the daily one offers hope for a possible bullish trend reversal. There are two main reasons for this:

Firstly, the Ethereum price decline is contained inside a descending parallel channel, which is corrective. However, ETH has not moved above its midline yet since the Bybit hack thwarted its most recent attempt (black circle).

Secondly, the RSI and MACD have turned bullish since the former broke out from a resistance trend line while the latter made a bullish cross (black icon).

However, the six-hour chart thwarts this possibility by showing a short-term ascending parallel channel during the recovery. The channel’s resistance trend line has created numerous long upper wicks (red icons), considered signs of selling pressure.

Today, the ETH price trades in the channel’s lower portion, signaling an impending breakdown. Since a breakdown from the channel will likely cause a close below the $2,500 support area, it will also have bearish implications for the long-term trend.

As a result, the weekly and daily time frame indicator readings alongside the price action give a bearish Ethereum prediction, implying that a breakdown will happen soon.

Unclear Path Forward

While ETH was on its way to a breakout on Feb. 21, the Bybit hack caused a sharp sell-off that prevented the price from doing so.

Now, the ETH price trades inside a short-term parallel channel, a breakdown below which can trigger another sell-off. The weekly and daily time frame readings support this bearish ETH prediction.