Bybit Hack: Market Funding Rates Plunge, What’s Next For Ether?

Market funding rates have dropped since the infamous Bybit hack, which drained over $1.4 billion. This follows low sentiments amid creeping interest from bulls and large holders. On a positive note, Ethereum (ETH) reserves on the exchange have recovered, showing signs of renewed growth. Crypto users remain optimistic after further mounting fears this weekend, with bulls pinning an altseason.

ETH Traders Face Mixed Price Projections

In the last 48 hours, funding rates have hit the largest altcoin price trends, leaving many at a crossroads. On one hand, a sharp decline in the time frame places the asset below the previous support on its way to the $2,500 line.

This downward movement wiped out slight gains as altcoins set course for a possible recovery. At the time of writing, ETH price stands at $2,676, a 4% drop in the last 24 hours. Weekly gains also plummeted as sell pressure spiked.

“… funding rates have experienced a sharp decline during the latest market turbulence, even turning negative. This drop suggests heightened selling pressure and fear-driven activity in response to the hack. If this trend persists, particularly with continued resistance at the $3K level, further declines could follow, with sellers eyeing $2.5K as the next major support,” CryptoQuant wrote. 

The decline in funding rates leads to a sideways correction before the next cycle peak, often triggered by fresh capital. According to more analysts, a trend reversal could spur Ethereum price above the $3k mark, setting the tone for larger gains. Funding rates are pivotal to gauging the market’s direction due to the urgency of trade execution.

Bulls Chart Upward Course

On the flipside, Ethereum holders maintain a solid position to a price leap citing institutional and on-chain factors. First, the asset reserve on Bybit recorded over 400% increase after the Bybit incident. Hours after the hack, ETH reserves plummeted to 39,692. 

However, recent charts show over 200,000 ETH as trading activities rebound. While movement to exchanges is generally a bear signal, most previous outflows were sales and not generally to other custodians.

With trust increasing, whales also made huge purchases, looking to gain as the market swung upwards. Ethereum is expected to be at the fore of the altcoin season, which market experts deem to have kicked off. This fueled price projections above $4k before the cycle top.