Following the Binance hack, the Lazarus Group is reported to hold more than 420,000 ETH that cannot be frozen, a potential supply overhang for Ethereum. Analysts point to thin liquidity as a risk, while others see a buying opportunity as Binance pledges to cover the losses.
The Lazarus Group is reported to hold over 420,000 ETH that can't be frozen, which creates a potential supply overhang for Ethereum. The position could pose a risk of additional selling pressure.
One analyst noted that the Binance hacker may have found a workaround to the freezes on the $6.3 billion in stolen funds. Tether froze $1.5 billion in USDT, and Circle froze another $800 million in USDC. However, the attacker allegedly deposited the stolen USDT into Aave as collateral and borrowed Ethereum against it.
Ether falls just over 3% as borrowed ETH stays out of reach
Tether can freeze any USDT held as collateral, but it cannot directly freeze the ETH already borrowed from Aave. The attacker therefore keeps free access to liquid ETH while the collateralized assets remain stuck in the protocol, which makes recovery harder.
The market is still digesting the post-hack developments. Ethereum has fallen by just over 3% this week, which indicates relatively contained selling pressure, and exchange reserves indicate limited market impact.
Bears cite thin liquidity, bulls cite Binance's pledge
On the bearish side, one analyst noted that low order book liquidity and 5x wider bid-ask spreads could make ETH vulnerable to spot-selling pressure through November and December. Ethereum may continue to lag Bitcoin until some of that pressure eases, possibly into early 2027.
Other analysts see the dip as a time to buy back into Ethereum because Binance has pledged to cover all the losses. The SAFU fund holds around $1.15 billion in BTC, covering less than 35% of the estimated losses, so Binance would need to absorb the remaining $2.2 billion.
Ethereum's RSI is also in oversold territory for the first time since June, potentially creating an attractive entry point for dip buyers.
Source: AMBCrypto
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