Ethereum Faces Bearish Pressure Amid Bybit Reserves Recovery, Potential for Reversal Remains Uncertain

• Ethereum (ETH) is experiencing significant bearish pressure, falling over 18% in the last 30 days amid heightened market uncertainty.

• The Relative Strength Index (RSI) has declined sharply, indicating a significant shift in market sentiment and suggesting increased selling pressure.

• Despite a recovery of 84% of Bybit’s reserves post-hack, ETH continues to struggle below key resistance levels, highlighting ongoing market trepidation.

Ethereum’s price faces challenges under $2,900 resistance, marked by bearish indicators and a recent hack recovery, inviting cautious market sentiment.

Bybit Is Recovering Its ETH Reserves After the Hack

Following a major hack, Ethereum’s supply on Bybit plummeted dramatically, with reserves dropping from 443,000 ETH to just 20,250 ETH in a single day. This sudden decrease spurred panic-driven selling across the market, impacting not just ETH, but also BTC and various altcoins. Market participants feared liquidity issues, amplifying the overall bearish sentiment.

The swift reduction in reserves heightened anxiety among investors, leading to speculations about the potential need for Bybit to repurchase ETH to restore its liquidity. Since the initial panic, Bybit’s reserves have steadily recovered, climbing from 29,000 ETH to approximately 372,000 ETH—a restoration of about 84% of the assets lost during the incident.

While this recovery signals a potential return of buying interest in ETH, the price remains under pressure, reflecting a market still reeling from previous fears.

Indicators Show No Signs of a Bullish Momentum

The Relative Strength Index (RSI) for Ethereum recently dropped significantly from 63.2 to 43, indicating a troubling shift in buying momentum. This metric, which assesses the speed and change of price movements, reveals a market perception that has turned bearish, as the RSI now ventures closer to oversold territory.

An RSI reading above 70 typically hints at asset overbought conditions, while below 30 reflects oversold conditions, presenting potential buying opportunities. The current value of 43 reflects a significant weakening of buying interest, likely a consequence of lingering concerns about the hack’s implications on market stability.

Further analysis reveals that Ethereum’s Average Directional Index (ADX) has dropped from 21.4 to 18.3, indicating a waning trend strength. With the +DI (positive directional indicator) declining and the -DI (negative directional indicator) rising, the market sentiment leans heavily towards further downside pressure.

The crossover between -DI rising above +DI confirms the prevailing bearish trend, pointing to an environment ripe for continued downward price movements unless a resurgence in buying momentum occurs.

Ethereum Price Has Been Below $2,900 For Three Weeks

Ethereum’s struggle to surpass the $2,900 threshold highlights ongoing resistance in the market. Testing the $2,850 resistance repeatedly in the past few weeks, ETH’s inability to mount a sustained rally indicates strong selling pressures remain present. Should the current downtrend persist, potential support levels lie at $2,551 and further down at $2,159.

On the optimistic side, if Bybit successfully reinstates its ETH reserves to pre-hack levels, this could ignite a positive market sentiment for Ethereum. If such circumstances arise, a potential uptrend may challenge the critical $2,850 resistance, and a breakthrough could pave the way to $3,020 and beyond, with $3,442 identified as a significant bullish target.

Conclusion

In summary, Ethereum faces significant headwinds as it navigates a landscape marked by bearish sentiment and resistance levels that have remained unbroken since early February. While recovery in Bybit’s reserves offers a glimmer of hope, continued vigilance is warranted as market dynamics evolve. Investors should remain attentive to these signals to make informed decisions moving forward.