- There has been a surge in the amount of ETH purchased by crypto exchange Bybit, a positive sign for the market.
- The derivatives market is a better reflection of possible ETH movement, which is now positive.
Ethereum [ETH] has started displaying bullish tendencies in the market. In the past 24 hours, the asset has rallied 3.79%, reflecting this market movement.
Based on the current market trend—the recent Bybit purchase of ETH alongside increased derivative market buying activity—the asset could recover its weekly loss of 17.84%.
Bybit’s purchase of ETH is bullish
Recent data from Lookonchain showed that the cryptocurrency exchange Bybit has begun purchasing ETH in the past 24 hours.
During this period, a total of $297 million worth of ETH was bought in two moves. In the first, the exchange purchased 36,893 ETH at $2,711, worth approximately $100 million.
In the second phase—twice the size of the initial purchase—Bybit bought 71,755 ETH worth $197 million.
Source: Lookonchain
Typically, when a large entity executes a series of buybacks like this, it signals a bullish move for ETH, which is evident in its 3.79% price increase over the past 24 hours.
However, this buyback from Bybit followed the largest crypto hack in history, in which over 490,000 ETH worth $1.46 billion was stolen from exchanges.
Spot market activity shows rebalancing
There has been a surge in certain key metrics that would typically suggest a bearish scenario. However, in this case, they could indicate the market is regaining balance following the hack.
Since the start of February, the overall available ETH on exchanges has declined sharply from 19.7 million to a press-time value of 18.5 million.
A decline in exchange reserves is generally bullish for the asset as demand rises, whereas an increase would be bearish.
However, in the past 48 hours, there has been an uptick in available ETH on exchanges, rising from 18.509 million to 18.566 million.
This would typically indicate a bearish trend, but given the recent $1.46 billion ETH outflow, it suggests the market is stabilizing rather than weakening.
Source: CryptoQuant
Similarly, exchange net inflows, which indicate how much ETH is being moved into exchanges, increased by 18,984—potentially signaling a sell-off.
However, similar to the exchange reserves shift, this appears to be part of a market rebalancing. Notably, a massive outflow of over 457,000 ETH occurred on the 21st, the largest since the 478,000 ETH outflow in June 2023.
To determine whether the market is truly bullish or bearish, a better approach is to analyze the derivatives market.
The derivatives market is buying
The derivatives market provides a clearer view of market sentiment. Currently, Funding Rates and Open Interest have turned bullish, meaning that despite the recent hack, traders are opening long positions.
At the time of writing, the Funding Rate across all exchanges on CryptoQuant has moved into bullish territory, with a press time reading of 0.0020.
A positive Funding Rate suggests that traders are confident in their long positions and are paying a premium to maintain the price difference between the spot and derivatives markets.
Source: CryptoQuant
Open Interest, which tracks the total amount of unsettled derivative contracts, has also surged by 10.33% in the past 24 hours to $16.38 billion.
Combined with a massive increase in buying volume in the derivatives market, this suggests that most unsettled derivative contracts are likely buy positions.
Overall, ETH remains in a bullish phase despite the hack, and closely monitoring the derivatives market could provide further clarity on its next move.
