Two exchange security incidents and a potential shared threat actor.

November has started with volatility. Macro FUD is driving uncertainty in the market. However, crypto security is also playing its part.

Binance’s exploit of a $6.3 billion hack triggered fresh panic, and now Mercado Bitcoin’s $38 million-$49 million exploit has added another layer of FUD over the past 24 hours.

The key takeaway? Another large-scale hack has occurred, which was confirmed by BitMart founder Sheldon Xia via his recent post on X. Initial investigation shows there may be a link between this and the attackers who exploited the $38M-$49M exploit on Mercado Bitcoin.

이미지 불러오는 중BitMart

Source: X

In essence, two potentially connected hacks have emerged within just 24 hours.

On-chain investigators are currently tracking down where the funds went. Interestingly on-chain data shows that around $11.45 million worth of altcoins has been moved between various wallets, raising concerns about potential liquidation.

This includes around $1.1 million worth of VIRTUAL being sent to a new wallet, with sales potentially taking place in batches of around $20,000. The attacker still holds around $1 million of VIRTUAL.

Timing is also important here. There is already a lot of crypto market FUD ahead of the US midterm elections. The Altcoin Season Index has also fallen below its third lower low, which means things are not looking great for altcoins.

With exchange hacks adding to the uncertainty, could rising sell pressure trigger a broader altcoin crash?

Two exchange hacks raise fears of a wider altcoin sell-off

Altcoins face another test as the Mercado Bitcoin and BitMart hacks trigger fresh market concern.

The MercadoBitcoin hacker has moved to sell multiple altcoins such as PEPE, AAVE, UNI, ONDO, and ENA, converting them into ETH. The attacker now holds 7,988 ETH worth around $18.19 million.

Meanwhile, Arkham Intelligence reports that the hacker has moved 31 different altcoins to wallet 0x848 and sold them for around $316,000 in ETH. In essence, the hacker is rotating out of altcoins and moving into Ethereum.

As the largest altcoin by market cap, Ethereum is now in focus. From a technical perspective, Ethereum [ETH] is trading above $2.3k, and RSI remains in neutral territory. On the ETF side, however, flows have been weak, with Spot ETH ETFs recording seven consecutive days of net outflows.

This indicates that recent ETH strength has less to do with strong demand for ETH and more to do with Bitcoin weakness, with ETH dominance (ETH.D) up nearly 2% this week.

이미지 불러오는 중altcoins

Source: TradingView (ETH.D)

However, the bigger risk is what happens next.

If the hacker starts dumping his $18.19 million worth of ETH, Ethereum could get hit by negative selling pressure and push the sentiment lower.

With the altcoins already struggling, consecutive lower lows, weak ETF flows, and rising macro uncertainty, the market could face another liquidity squeeze, increasing the risk of a deeper altcoin crash.

Final Summary

• Two linked exchange hacks have raised fresh fears, with hackers selling altcoins and moving millions into ETH.

• Weak market sentiment, ETF outflows, and rising uncertainty could trigger more selling and a wider altcoin crash.