Massive Buy Fails to Lift ETH Price
Ethereum (ETH) surprised the market by dropping nearly 6% on February 24, even after reports revealed Bybit’s $700 million ETH purchase. Traders expected a rebound after the February 21 hack. Instead, ETH slipped from $2,850 to $2,650, erasing recent gains.
Why did such a large buy fail to boost prices? The answer lies in market dynamics and trader behavior.
Bybit Hack and Market Impact
The Bybit hack, reportedly linked to North Korea’s Lazarus group, shook investor confidence. Hackers exploited malicious code to siphon funds. Despite Bybit recovering over 50% of the stolen ETH, the market remained unfazed.
Bybit’s CEO, Ben Zhou, explained that the recovery involved over-the-counter (OTC) transactions, which provided enough liquidity to absorb the buying pressure without significantly impacting prices.
Leveraged Traders Face Reality Check
Many traders bet on an ETH price surge following Bybit’s bulk buy. When the expected rally didn’t materialize, they quickly unwound their positions. This shift was evident as ETH futures open interest dropped from 8.82 million to 8.52 million ETH within a day.
While forced liquidations totaled a modest $34 million, the market reaction highlighted excessive optimism among leveraged traders.
Multisig Risks and Staking Concerns
The hack also spotlighted vulnerabilities in Ethereum’s multisig wallet setups. Complex configurations using the Ethereum Virtual Machine (EVM) exposed systemic weaknesses. Institutions managing billions found themselves vulnerable to such sophisticated attacks.
Meanwhile, ETH holders face another challenge: a low 2.4% adjusted staking yield. With ETH’s supply growing at 0.6% inflation, investors are eyeing alternatives like Solana (SOL), offering a 4% yield. Hopes for staking integration in US spot ETH ETFs remain under review by the SEC.
What’s Next for Ethereum?
Ethereum’s price dip stems from multiple factors—Bybit’s OTC buying strategy, leveraged trader optimism, and broader market concerns. Until confidence fully returns, ETH’s path to recovery may face hurdles.
Traders should stay cautious and monitor developments around staking, regulatory moves, and market sentiment.
