The cryptocurrency market is in turmoil following a massive hack on the Dubai-based Bybit exchange, which saw over $1.4 billion in Ethereum (ETH) and related tokens drained from its hot wallets. This event, coupled with increasing macroeconomic pressures, has sent Bitcoin (BTC) and Ethereum prices downward, triggering widespread liquidations and raising concerns about further volatility.
Bybit Hack Sparks Panic, Ethereum Takes the Hardest Hit
Ethereum, the primary target of the Bybit attack, has suffered a steep decline, plunging nearly 8% in a single day to $2,584 as of this writing. The hack, one of the largest in recent history, has intensified fears over security vulnerabilities in centralized exchanges, shaking investor confidence.
Bitcoin has also taken a hit, though its decline has been less severe compared to Ethereum. The world's largest cryptocurrency is down at $89,417. While BTC has shown relative resilience, the market remains on edge as liquidation pressure continues to build.
According to CoinGlass, more than $686 million in leveraged crypto positions were liquidated in the past 24 hours alone, with Ethereum accounting for $147 million and Bitcoin for $143 million. The vast majority of these liquidations have been on long positions, indicating that investors were caught off guard by the rapid downturn.
Additionally, cryptocurrency exchange OKX recently pleaded guilty to charges from the U.S. Department of Justice for illegally serving American customers. The exchange agreed to pay over $500 million in fines and penalties, marking another blow to investor confidence. The crackdown on unregulated crypto firms is fueling fears of tighter enforcement actions, which could further impact Bitcoin and Ethereum trading volumes.
The total crypto market cap is down 9.6% today to $3.01T as Bitcoin falls below $90K.
— CoinGecko (@coingecko) February 25, 2025
Are you buying, selling or HODL-ing? pic.twitter.com/eVIDSi0C9H
Macroeconomic Factors
Beyond the Bybit hack, macroeconomic forces are also exerting downward pressure on crypto markets. Economists are warning of a potential “nightmare scenario” for the U.S. Federal Reserve, as speculation grows around Elon Musk’s rumored push for a major overhaul of the central banking system.
Meanwhile, equity markets have weakened, particularly in the AI sector, where investor sentiment has soured amid declining demand for high-performance chips. The Nasdaq Composite fell more than 1%, with concerns growing ahead of Nvidia’s earnings report on Wednesday.
Further complicating matters, U.S. President Donald Trump confirmed that tariffs on Canadian and Mexican imports will move forward as planned. This has reignited concerns over inflation, economic growth, and global trade tensions, which in turn have fueled risk-off sentiment across financial markets.
Regulatory and Institutional Catalysts
- Senator Cynthia Lummis is preparing to introduce a major legislative update that could impact Bitcoin’s regulatory standing in the U.S.
- The Federal Reserve’s next policy decisions will play a key role in determining Bitcoin’s future price action.
- Ethereum’s network upgrades and upcoming developments in Ethereum Layer 2 solutions could help restore investor confidence.
For now, investors are closely monitoring support levels, macro trends, and regulatory updates to gauge where the market might head next. Whether BTC and ETH can recover or face deeper declines depends on how these factors unfold in the coming weeks.
HODL Team
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