Can Ether recover above $3K after Bybit’s massive $1.4B hack?

Ether needs a break above the key $3,000 psychological level to reverse its two-month downtrend, which now hinges on investor sentiment following the largest financial hack in crypto history.

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, according to TradingView data.

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, resulting in the largest crypto theft in history.

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, which could mean that the cybercrime unit won’t immediately sell the stolen Ether.

Lazarus Group’s main publicly-known wallet currently holds over $83 million worth of crypto, of which $3.68 million Ether, Arkham Intelligence data shows.

This is only a small fraction of the estimated $1.34 billion worth of crypto stolen by North Korean hackers last year, which accounted for 61% of the total crypto stolen in 2024, according to Chainalysis data.

Related: Bybit hack, withdrawals top $5.3B, but ‘reserves exceed liabilities’ — Hacken

Ether needs a “decisive move” above $3,000

To stage a reversal from its over two-month downtrend, Ether will need to recapture the $3,000 psychological mark, according to Vugar Usi Zade, chief operating officer at Bitget exchange.

He told Cointelegraph:

“While a definitive breakout remains elusive, 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.”

Related: Lazarus Group consolidates Bybit funds into Phemex hacker wallet

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:

“Fundamentals will eventually catch up to Ethereum, and I still firmly believe that. While the market remains focused on short-term plays and, in some cases, questionable activities, 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, added Kazmierczak.

Ether reserves across all exchanges fell to 18.95 million on Feb. 18, marking their lowest level seen since July 2016 when Ether was trading around $14, CryptoQuant data shows.

Still, Ether faces significant resistance above $2,900 and $3,000.

A potential rally above $3,000 would trigger over $623 million worth of leveraged short liquidations across all exchanges, CoinGlass data shows.

Magazine: Ethereum L2s will be interoperable ‘within months’: Complete guide