Ethereum is digesting the aftermath of a major exchange hack that left $6.3 billion in stolen funds and a large question mark over the market. The immediate price reaction has been contained. High-cap assets, ETH included, are down just over 3% this week. Exchange reserves and frozen stablecoin balances suggest selling pressure has not spilled into a broad panic. Maybe that is why traders are not rushing for the exits.
Stablecoin freezes do not cover borrowed ETH
Tether froze $1.5 billion in USDT and Circle froze $800 million in USDC, according to the article. But the attacker reportedly moved stolen USDT into Aave as collateral and borrowed ETH against it. That detail matters. Stablecoin issuers can freeze the collateral, yet they cannot directly freeze ETH that has already left the lending protocol. The attacker may still control liquid ETH while the collateral sits stuck. The reported Lazarus Group position is more than 420,000 ETH, a size that creates a potential supply overhang. It is not a guarantee of more selling, but it is a risk traders cannot ignore.
Thin liquidity meets oversold signals
One bearish read points to low order book liquidity and wider bid-ask spreads. Those conditions could make ETH more sensitive to spot selling through November and December. In that view, Ethereum may keep lagging Bitcoin until the pressure fades, perhaps into early 2027. The bullish case looks different. Binance has pledged to cover losses through its SAFU fund and company funds. SAFU holds around $1.15 billion in BTC, covering less than 35% of estimated losses, so Binance would need to absorb about $2.2 billion. The exchange appears able to handle that hit.
Dip buyers watch the 420K ETH overhang
Ethereum’s RSI is now in oversold territory for the first time since June. That has caught the attention of dip buyers looking for an entry point. If Binance absorbs the losses tied to the hack, the 420,000 ETH overhang could be digested rather than dumped. I think the next few weeks will show whether that scenario holds. For now, the market is weighing two forces: thin liquidity and a large ETH stash on one side, and exchange backing plus oversold conditions on the other. The result may be a slower recovery, not a clean reversal.
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