Ethereum (ETH) has fallen more than 8% in the last 24 hours and over 22% in the past 30 days, reflecting a bearish market sentiment. The price was already in decline before the Bybit hack, which further impacted market sentiment.

Although Bybit has since recovered 84% of its reserves, ETH’s price remains under pressure. With key resistance at $2,850 and no break above $2,900 since February 2, Ethereum’s outlook remains uncertain as bearish indicators continue to dominate.

Bybit Is Recovering Its ETH Reserves After the Hack

Ethereum’s supply on Bybit experienced a dramatic decline after the hack, plummeting from 443,000 ETH to just 20,250 ETH in a single day.

This sudden drop triggered panic selling pressure on ETH and also on BTC and other coins, as market participants feared a potential liquidity crisis.

The sharp decrease in reserves heightened uncertainty, leading to widespread speculation about the aftermath. Some users suggested that Bybit might be forced to buy back ETH to restore its reserves, potentially creating strong buying pressure.

Since February 22, Bybit’s ETH reserves have shown significant recovery, surging from 29,000 ETH to 372,000 ETH by February 24, which accounts for 84% of its pre-hack reserves.

The market’s initial panic selling appears to have been temporary, and the rebound in reserves could lead to renewed buying interest in ETH. However, Ethereum’s price has not recovered to levels before the hack yet.

Indicators Show No Signs of a Bullish Momentum

The Relative Strength Index (RSI) for Ethereum was recovering after the Bybit hack, reaching 63.2 yesterday, indicating strong buying momentum.

However, it has since dropped sharply and is now at 43, signaling a significant shift in market sentiment. RSI is a momentum oscillator that measures the speed and change of price movements, ranging from 0 to 100.

Typically, an RSI above 70 suggests that an asset is overbought, indicating potential selling pressure, while an RSI below 30 indicates that an asset is oversold, potentially signaling buying opportunities.

An RSI between 30 and 70 is generally considered neutral, with movements within this range reflecting normal market fluctuations.

Ethereum’s RSI dropping from 63.2 to 43 in just one day suggests a rapid shift from bullish to bearish sentiment. This significant decline could indicate increased selling pressure or reduced buying interest, possibly due to lingering concerns about the aftermath of the Bybit hack.

A drop to 43 also brings RSI closer to the oversold territory, which, if continued, could indicate a further bearish trend. However, if buying interest resumes, the RSI could stabilize or even rebound, suggesting a potential recovery.

Ethereum’s DMI chart shows the ADX at 18.3, down from 21.4 yesterday, indicating weakening trend strength. An ADX below 20 suggests a lack of clear momentum, aligning with Ethereum’s ongoing downtrend.

Meanwhile, the +DI dropped from 30.4 to 20, showing decreased buying interest, while the -DI rose from 12.3 to 22.9, signaling increased selling pressure.

The crossover of -DI above +DI confirms bearish dominance, suggesting continued downward pressure on Ethereum’s price.

The weakening ADX, combined with rising -DI, points to a declining trend that may persist unless buying momentum returns. This could result in further price drops or sideways movement in the short term

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

Ethereum has struggled to break above the $2,850 resistance, which has been repeatedly tested in recent weeks. If the current downtrend continues, ETH could test the support at $2,551, and if that level fails, it might drop further to $2,159.

Notably, Ethereum hasn’t broken above $2,900 since February 2, highlighting strong resistance in this range.

However, if Bybit successfully restores its reserves to pre-hack levels, this could boost positive sentiment for ETH. In this scenario, an uptrend might retest the $2,850 resistance, and if broken, Ethereum price could rise to $3,020.

Should momentum continue, the next target would be $3,442. A break above $2,900 would be significant, as ETH has struggled with this level since early February, potentially signaling a bullish reversal.

OKX announced today that it reached a settlement with the US Department of Justice (DoJ), closing previous investigations. It pled guilty to several charges and will pay over $504 million.

The exchange depicted this settlement as a casual misunderstanding, but the DoJ’s own press release referred to its “flagrant violations” and “blatant disregard.”

OKX Settles with the DoJ

OKX, one of the world’s leading crypto exchanges, has been clearing house on its global regulatory compliance issues. On one hand, it secured a MiCA license for EU operations last week. Now, the exchange is progressing towards new compliance in the US, announcing a settlement with the DoJ:

“We cooperated with the US Department of Justice in their thorough investigation of our business. We had a small percentage of customers who were able to use our international services due to historical compliance gaps. Today our compliance controls are among the leading in the industry. This matter is now behind us,” the firm claimed on social media.

According to the announcement, the exchange acknowledged that it allowed some US customers to trade on its platforms without proper licensing. OKX agreed to pay a fine of $84 million and forfeit $421 million in user fees. This concludes a saga of year-long investigations into the firm.

The US government’s financial regulatory apparatus is changing its attitude towards crypto, but frictions remain. The DoJ itself emphasized that the firm pled guilty to serious offenses. Quoting various officials, the DoJ referred to OKX’s “flagrant violations” and “blatant disregard” in its conduct.

It seems that the DOJ’s attitude towards the crypto industry will remain distinct from other federal regulators. In the last week alone, the SEC dropped a major lawsuit against Coinbase and quietly dismissed a probe into Robinhood’s potential misconduct. It also ended an investigation against NFT marketplace OpenSea.

OKX’s settlement involves an actual fine and guilty plea, which is more than these institutions can claim.

Nonetheless, OKX should be quite pleased with this settlement. It earned over $1.5 billion in revenue last year, and it has substantial asset holdings and trade volumes.

Although $504 million is a hefty price to pay, it is a worthwhile fee to regain the US regulator’s good graces.

Citadel Securities, one of the world’s largest market makers, is planning to jump into the crypto space. The firm plans to become a major liquidity provider for the industry, cooperating with leading exchanges.

However, rank-and-file traders have an intense dislike of Citadel due to its manipulation in the GameStop short squeeze. As this situation develops, it may turn into a major rift between different industry factions.

Will Citadel Transform Crypto?

Citadel Securities, an American market maker with over $62 billion in AUM (asset under management), has kept an eye on the crypto market for a few years. It consistently observed potential ETF gains since 2022, and became a major institutional investor in them after approval.

Now, according to a new Bloomberg report, the firm wants to become a liquidity provider for the crypto space.

Citadel is trying to take an overt role in crypto for a few reasons, not least of which is the favorable regulatory environment. Since Trump became President, a wave of pro-crypto energy has swept through the federal government, and the firm is planning to capitalize on it.

According to anonymous sources, Citadel wishes to begin by getting approval from major exchanges.

However, not everyone is happy about this. During the 2021 GameStop stock squeeze, Citadel CEO Ken Griffin played a major role in getting Robinhood to restrict user trading.

Robinhood, a major stock trading app, acquiesced to Griffin’s request because Citadel processes much of its revenue. An SEC probe against Robinhood was dropped today, contributing to the skepticism.

“Ken Griffin and Citadel Securities are set to become the liquidity provider for cryptocurrencies. Citadel is so openly corrupt rigging the stock market that even the mainstream media says the SEC is afraid of them. What could go wrong!” claimed the Wall Street Apes

After the biggest crypto exchanges approve Citadel, the firm wishes to set up market-making teams outside the US. Citadel began laying the groundwork for expansion in Southeast Asia in 2023 and tried to build up regional stock markets in the US last year.

In other words, Citadel could have a truly revolutionary impact on the crypto market if its dreams of becoming a liquidity provider come to pass. However, this revolution may be unfavorable to the community.

If rank-and-file traders detest Citadel, will that impact exchanges’ decisions? Could enough capital simply overwhelm community attitudes? These are all vital questions.

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