The abrupt decline in cryptocurrency markets has not spared cyber criminals from its clutches. Amid Ethereum’s sharp depreciation, hackers found themselves grappling with substantial financial setbacks, losing over $13.4 million due to hasty sell-offs.
What Drives the Cycle of Panic Sales?
Data from blockchain analysis firm Lookonchain unravels the series of miscalculated moves by these hackers. Having disposed of 7,816 ETH for about $29.1 million at an average price of $3,728, they later faced an additional $3.37 million in losses on their concluding transaction. This trading misstep is not isolated, as past errors indicate a habitual trend among the hackers.
In previous transactions, the hackers had secured 9,240 ETH for $39.45 million, only to sell 8,638 ETH for $32.5 million, suffering a $5.5 million loss. Such actions cumulatively set them back by more than $13 million in recent days, showcasing a repeated pattern of buying during price hikes and panic selling when values fall.
How Has Market Turbulence Magnified the Dilemma?
Insights derived from Lookonchain’s Arkham Intelligence illustrate that after selling 8,638 ETH the prior week, the hackers reacquired 7,816 ETH, but offloaded these anew in the latest Ethereum price slump. Utilizing the CoW Protocol, these hacker wallets engaged in multimillion-dollar ETH and DAI transfers, some exceeding $6 million. One particular wallet notably converted 6.9 million DAI into 1,815 ETH.
Additionally, analysts like Specter Analyst and ZachXBT highlighted a wallet linked to the theft of 400 BTC from Coinbase. This particular address, which had shifted part of the pilfered Bitcoin into Ethereum earlier this October, now surfaces among those incurring losses in this market disruption.
As Ethereum’s value closed lower, trading at 22% less than its peak of $4,900, Friday marked noteworthy capital outflows of over $100 billion for the second consecutive week. The dismal market conditions affected both Ethereum, which fell 1.5%, and Bitcoin, dropping to $103,850 before a minor recovery.
“Ethereum has broken down from a descending triangle, indicating a bearish outlook.” – Catalyst
Amr Tah from CryptoQuant observed a spike of 30% in futures market open interests, suggesting a heightened risk appetite among investors that contributed to the price plummet. Excessive leverage and negative funding rates on platforms like Binance mirror the tendency towards “overly short” market positions.
- Ethereum closed the week 22% below its peak of $4,900.
- Friday saw long positions worth $269 million liquidated.
- Total market outflows surpassed $100 billion two weeks in a row.
Panic selling patterns highlight even criminals are not immune to market jitters. While algorithmic trading tools might streamline processes, they fall short of overcoming inherent human behaviors. As Ethereum’s price swings expose volatile leverage, investors must tread carefully to mitigate drastic financial risks amid unpredictable market shifts.
