Ethereum (ETH) has shown signs of bullish momentum recently, driven by a significant purchase from the cryptocurrency exchange Bybit. With the asset surging 3.79% in the last 24 hours, many traders are now considering whether Ethereum can fully recover from its recent 17.84% loss over the past week.
The market’s reaction to Bybit’s $297 million purchase, alongside the current trends in the derivatives market, suggests that ETH’s recovery might be on the horizon.
Bybit’s $297M ETH Buyback: A Bullish Signal
Bybit’s recent moves have attracted the attention of Ethereum traders and analysts alike. According to data from Lookonchain, Bybit purchased ETH in two large transactions, buying a total of 108,648 ETH, valued at $297 million. The first purchase involved 36,893 ETH at $2,711 each, worth approximately $100 million. The second phase, which was more significant, saw the exchange buying 71,755 ETH for around $197 million.
Typically, when a major entity like Bybit makes such large-scale purchases, it signals confidence in the asset’s future performance. This optimism was reflected in ETH’s 3.79% price increase within the last 24 hours.
Despite these bullish signs, it’s important to note that this purchase follows the largest cryptocurrency hack in history, where over 490,000 ETH—worth $1.46 billion—was stolen from exchanges. While the hack raised concerns about the security of the market, Bybit’s buyback could be seen as a positive sign of market confidence in ETH’s long-term prospects.
Rebalancing the Market: Signs of Stability
Alongside Bybit’s purchase, other key metrics in the Ethereum market are providing insights into its recovery. Since the beginning of February, the total available ETH on exchanges has decreased from 19.7 million to 18.5 million, signaling a rise in demand for the cryptocurrency. A drop in exchange reserves is generally seen as a bullish indicator, suggesting that investors are holding onto their ETH rather than selling it.
Interestingly, in the last 48 hours, there has been a slight uptick in the available ETH on exchanges, rising from 18.509 million to 18.566 million. Typically, this could signal a bearish trend, but given the massive outflow of over 490,000 ETH during the hack, this increase may simply indicate a market rebalancing rather than a bearish shift.
Additionally, exchange net inflows, which track the amount of ETH being moved into exchanges, have increased by 18,984 ETH. This would generally suggest a potential sell-off. However, similar to the rise in exchange reserves, this may indicate the market is stabilizing after the massive hack, rather than heading into a bearish phase.
The Derivatives Market: A Clearer Picture of Market Sentiment
For a more accurate read on the market, many traders are turning to the derivatives market. The derivatives market, which includes futures contracts and other financial instruments, often provides a clearer picture of market sentiment.
Currently, both the Funding Rate and Open Interest in the derivatives market have turned bullish. The Funding Rate, which measures the cost of maintaining long positions in derivatives contracts, has moved into positive territory, indicating that traders are confident in ETH’s future price movements and are willing to pay a premium to hold long positions.
Additionally, Open Interest—the total value of unsettled derivative contracts—has surged by 10.33% in the last 24 hours, reaching $16.38 billion. This increase suggests that many traders are opening new long positions, reinforcing the belief that Ethereum remains in a bullish phase despite recent challenges.
Outlook for Ethereum: A Bullish Future Ahead?
Despite the shock of the hack, Ethereum is showing signs of a strong recovery, particularly in the derivatives market. Bybit’s large ETH purchases, combined with the rise in funding rates and open interest, suggest that sentiment is leaning positively. While ETH has experienced a loss in the past week, the current momentum indicates that the market is stabilizing and could potentially recover from its recent dip.
As the market rebalances, Ethereum’s bullish phase could continue, and traders should keep a close eye on the derivatives market for further signs of strength. Although the hack remains a significant event, it may not be enough to derail Ethereum’s ongoing recovery.
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