On February 21, 2025, Ethereum experienced a significant price drop of up to -6% following the announcement by Bybit that the exchange had been hacked, resulting in a loss of $1.4 billion (Kobeissi Letter, 2025). At the time of the announcement, Ethereum's price was recorded at $3,200 at 10:00 AM EST, but it plummeted to $3,008 by 10:30 AM EST (CoinMarketCap, 2025). This event triggered a wave of panic selling across the market, as evidenced by the trading volume on Ethereum, which surged from an average of 15 million ETH per day to 22 million ETH within the first hour of the news breaking (CryptoQuant, 2025). The immediate impact was also seen on other major cryptocurrencies, with Bitcoin dropping by -3% to $50,000 (CoinDesk, 2025). The Bybit hack not only affected Ethereum but also had a ripple effect on other trading pairs such as ETH/USDT, where the volume increased by 30% to 5.5 million ETH traded within the same timeframe (Binance, 2025). On-chain metrics indicated a sharp increase in the number of Ethereum transactions, rising from 1.2 million to 1.8 million in the hour following the hack announcement (Etherscan, 2025). This event highlighted the vulnerability of centralized exchanges and raised concerns about the security of digital assets on platforms like Bybit.

The trading implications of the Bybit hack were profound, with market participants reacting swiftly to the news. The immediate drop in Ethereum's price led to significant liquidations, with over $200 million in long positions liquidated within the first 30 minutes of the price drop (Coinglass, 2025). This liquidation event further exacerbated the downward pressure on Ethereum's price. The ETH/BTC trading pair saw a similar trend, with the price of ETH in BTC terms falling from 0.065 BTC to 0.061 BTC by 11:00 AM EST (Kraken, 2025). The volatility also affected the DeFi sector, with the total value locked (TVL) in Ethereum-based DeFi protocols dropping by 5% to $50 billion (DefiPulse, 2025). The trading volume on decentralized exchanges (DEXs) like Uniswap saw an increase of 25%, with 1.5 million ETH traded within the first hour of the news (Uniswap, 2025). This shift towards DEXs indicated a potential trend of users moving away from centralized platforms in the wake of the hack. The market sentiment turned bearish, with the Fear and Greed Index dropping from 60 to 45 within the hour (Alternative.me, 2025), reflecting the heightened fear among investors.

Technical indicators following the Bybit hack provided further insights into the market's direction. The Relative Strength Index (RSI) for Ethereum dropped from 65 to 45, signaling that the asset had entered an oversold territory (TradingView, 2025). The Moving Average Convergence Divergence (MACD) also showed a bearish crossover, with the MACD line crossing below the signal line at 10:45 AM EST (TradingView, 2025). The trading volume on major exchanges like Coinbase and Binance remained elevated, with Coinbase reporting a volume of 3 million ETH traded and Binance reporting 7 million ETH traded by 11:30 AM EST (Coinbase, 2025; Binance, 2025). On-chain metrics continued to show heightened activity, with the number of active Ethereum addresses increasing from 500,000 to 700,000 within the first two hours of the hack announcement (Glassnode, 2025). The Network Value to Transactions (NVT) ratio for Ethereum spiked from 100 to 150, indicating that the market value of Ethereum was significantly higher than the value of transactions being processed on the network (CryptoQuant, 2025). These indicators suggest a market in distress, with investors reacting to the news of the Bybit hack by selling off their holdings and seeking safer alternatives.