Will Ethereum’s Problems Continue? Risk Appetite Hits Lowest Level Since 2024
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- Ethereum’s risk appetite is declining, indicating caution in the market and slower growth ahead.
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It seems that the Bybit hack had a minor impact compared to larger market changes. Recent events, like the rumored Bybit hack, have altered market sentiment.
The sell-off that followed the suspected security breach was surprisingly less impactful than the significant market drop on February 3, which still influences traders despite its unclear origins.
However, underlying these short-term fluctuations is a serious issue: Ethereum’s risk appetite has been decreasing continuously since March 2024.
A lower risk appetite might lead to fewer liquidations and encourage accumulation. Yet it also signals a sluggish market. With ETH hovering near critical levels, it’s uncertain whether stability will be maintained or if uncertainty will continue.
Is the Bybit hack just a minor incident?
Despite worries about the potential impact of the Bybit hack, analysis shows that ETH’s most drastic declines in recent months are primarily due to widespread risk aversion rather than isolated incidents.
Source: Alpharactal
Price drops were evident in late January and February prior to public knowledge of any hacking event.
The downturn on February 3 was more severe than any consequences from hacking incidents and illustrates deeper liquidity issues along with changing investor sentiment.
As we’ve seen decreased risk appetite since early March last year,
Ethereum has encountered diminishing participation from leveraged traders.
While this could mean fewer transactions going forward,
ETH’s slow recovery indicates that there remains lingering turbulence within broader markets.
