Ethereum Faces Increased Selling Pressure

Ethereum has been experiencing heightened selling pressure after the Bybit security breach on Friday, resulting in a 5% drop within 24 hours, trading around $2,650.

Traders are increasingly concerned about the potential for further declines as the market responds to the fallout from the hack.

Crypto derivatives expert Gordon Grant noted that investors are now actively seeking protection against potential downside risks. He indicated that Bybit’s attempts to stabilize the market by purchasing ETH in response to the breach may have concluded, raising the likelihood of the stolen assets being sold, which would further affect ETH prices.

“Given the balance of risk around the end of Bybit’s ETH purchase and the eventual sale of the remaining hacked ETH, it is plausible that further downside protection demand and reflexive call option sales on the frontend led to a week of skewed behavior,” Grant stated.

He emphasized investors’ bearish outlook, pointing to derivatives data that show short-term distortions favoring puts over calls. In the aftermath of the attack, the one-week 25-day risk reversal in favor of puts climbed by as much as 15 volatility points. This rise indicates that investors exhausted their downside protection, causing one-week breakeven volatility to increase from approximately 50 to 65.

Analysts from QCP Capital echoed these sentiments, observing that risk reversals in ETH options reflect fears of further declines leading up to March maturities.

This is not investment advice.