Ethereum (ETH) traded around the $2,650 level, marking a 5% decline within the past 24 hours. This drop reflects traders' worries about potential further decreases after Friday's Bybit hack, which placed considerable downward pressure on the value of the world's second-largest cryptocurrency by market cap.
According to CoinTelegraph, the breach at Bybit resulted in the theft of about 401,000 ether, worth approximately $1.5 billion. The incident, suspected to involve the North Korean Lazarus Group, took place during a transfer from a cold wallet to a hot wallet.
Following the hack, Ethereum's price has been affected by the massive amount of stolen ether potentially being sold off by the hackers.
Gordon Grant, a cryptocurrency derivatives trader, observed that there is a growing demand for protection against further price drops in Ethereum. He suggested that Bybit's buying activity to offset the impact of the hack might have ended, raising the risk of the stolen ether hitting the market and driving prices even lower.
Grant explained that the market's response to the hack has led to a noticeable change in derivatives behavior. Specifically, there has been a shift toward a preference for puts over calls, indicating a bearish outlook among traders.
This was evidenced by the one-week 25-day risk reversal for ether options, which surged to as much as 15 volatility points in favor of puts, signifying a significant increase in demand for downside protection.
Additionally, analysts at QCP Capital have pointed out that the risk reversals in ether options are showing signs of increased apprehension about further declines as the March expiries approach.
The Bybit hacker, now in possession of a substantial amount of ether, ranks as the 14th largest ETH holder, which adds to the concern among derivatives traders.
The broader cryptocurrency market has also felt the impact, with related indices such as GMUT (Utilities & Tools) and GMSOLMEME (Top Solana Meme Tokens) experiencing declines of 12.22% and 13.78%, respectively.
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