Ethereum Plunges 7% After $1.5B Bybit Hack; Rollback Debate Erupts

Ethereum (ETH/USD) experienced a significant drop of over 7% following the hack of Bybit, a major cryptocurrency exchange, which resulted in the theft of nearly $1.5 billion worth of ETH. The incident has sparked a heated debate within the crypto community about whether Ethereum should roll back its blockchain to recover the stolen funds. Ethereum has since recovered to $2,735, but doubts persist about the sustainability of this rebound.

The crypto community is sharply divided on how to respond to the Bybit hack. Arthur Hayes, co-founder of BitMEX, advocates for a blockchain rollback, pointing to Ethereum’s 2016 DAO hack as a precedent. He argued, “If the community wanted to do it again, I would support it because we already voted no on immutability in 2016.” Samson Mow, CEO of JAN3, also supports this move, suggesting it could prevent the stolen funds from being misused.

However, critics argue that a rollback would undermine Ethereum’s credibility and decentralization principles. Jimmy Song, a prominent Bitcoin advocate, contends that the Bybit hack is different from the DAO exploit because the stolen funds have already been moved, making a rollback impractical.

Some community leaders propose alternative solutions to prevent similar incidents without compromising immutability. Adriano Feria, an Ethereum supporter, suggested Layer 2 (L2) solutions with reversible transactions to enhance security. Meanwhile, the Bybit hack has intensified discussions on the need for better regulatory oversight. Analysts caution that increased scrutiny could lead to stricter regulations for digital assets, particularly for meme coins and other speculative tokens.

Ethereum is trading at $2,735, with a 24-hour trading volume of $33.06 billion. It briefly dropped to $2,625 before recovering above the $2,710 support level, which aligns with the 50-Day Exponential Moving Average (EMA). Despite the recovery, ETH faces strong resistance at $2,795, coinciding with the 50% Fibonacci retracement level. The descending wedge pattern indicates a potential bullish reversal, but Ethereum must close above $2,795 to confirm this breakout. Conversely, failing to break above this resistance could lead to further consolidation or