Ethereum, hit by the year's largest hack, is the $2,200 support line also collapsing?

▲ Ethereum (ETH)/ChatGPT generated image ©

Ethereum (ETH) is facing intense selling pressure and an emergency in price defense, as trust across the ecosystem has been severely shaken by the year's largest decentralized finance (DeFi) hacking incident.

According to cryptocurrency market tracking site CoinMarketCap on April 20 (local time), Ethereum is trading at $2,278.25, having fallen 3.25% over the past 24 hours. This is a particularly notable decline even within the generally bearish virtual asset market, with a large-scale security incident on the KelpDAO cross-chain bridge identified as the key reason for rapidly freezing investor sentiment.

According to CryptoBriefing, this incident is the largest decentralized finance hack to occur in 2026, with a staggering $290 million stolen from KelpDAO. This shock caused the total assets deposited in decentralized finance to evaporate by $10.5 billion in an instant. As the damage spread to over 20 blockchains, including Ethereum Layer 2, Aave suspended the rseth market due to concerns about bad debt, and Ethereum's steadfast core value as a secure settlement layer was damaged, leading to a loss of market trust.

Excessive leverage liquidations and capital movements in the derivatives market also significantly amplified the decline. Social data analysis revealed extreme speculative betting in the market, with one investor taking a $16.2 million long position with 25x leverage. Currently, the average funding rate has turned negative, creating a situation where short sellers pay buyers, making them targets for cascading forced liquidations. Simultaneously, Bitcoin dominance surged to 59.34%, indicating a clear defensive flow of capital rapidly moving from altcoins to safer assets.

From a technical perspective, Ethereum is currently testing a critical support zone between its recent low of $2,275.65 and the psychological defense line of $2,300. The 7-day Relative Strength Index (RSI) recorded 20.15, indicating an extremely oversold condition, suggesting that if this support line is successfully defended, a temporary relief rally or consolidation could be expected. However, the overall trend structure has been significantly weakened, and the short-term market outlook still leans towards downward pressure.

Consequently, this sharp decline is a complex result of the major hacking incident that shook the ecosystem, compounded by cascading leverage liquidations and risk-averse sentiment. If the $2,275 support line breaks, there is a risk of a large volume of stop-loss orders flooding the market, rapidly pushing the price down to the next Fibonacci extension level of $2,200. Therefore, it is crucial to closely monitor further announcements and recovery processes from major decentralized finance protocols for the time being.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*