Binance hack, ETF outflows sink altcoins up to 25% during US midterms

4 min

Crypto prices declined due to a convergence of negatives: a multibillion-dollar Binance-related hack overhang, two straight sessions of large US spot ETF outflows, and US midterm election uncertainty, all against a backdrop of higher oil and rising rate expectations. A circulating chart from dealer.eth highlights that Bitcoin fell 15% to 51% after each of the last three US midterms, though those episodes occurred during bear markets and are not forecasts.

Market Snapshot

Bitcoin trades at $77,088, down 7.8% since October 1. Large-cap altcoins fell more: Solana -21.7%, Dogecoin -21.3%, Cardano -23.3%, Ether and XRP about -15%. Total crypto market capitalization: $2.58 trillion. 24-hour volume: $67.9 billion. Fear & Greed Index: 26. Bitcoin dominance: 59.9% as capital rotates toward BTC during risk-off.

Key Drivers This Week

Binance hack: $6.36 billion stolen on October 29. Elliptic estimates $3.24 billion remains in hacker wallets, largely BTC and ETH. Potential liquidations create supply overhang.
ETF outflows: US spot Bitcoin ETFs saw -$643.3 million Friday and -$398.6 million Monday. US spot Ether ETFs recorded -$140 million Monday, a sixth straight day of withdrawals.
US midterms: Markets price a higher probability of Democratic control of the House and likely the Senate, which would delay or stall crypto legislation for at least two years.
Macro: Brent crude trades above $100 following a US strike on Iran. Futures pricing shifted toward a potential Fed rate hike in December, tightening financial conditions.

Bitcoin After Past Midterms

dealer.eth’s scaled analysis of prior midterms relative to today’s price:

2014: -48% in 71 days implies ~$40,500
2018: -51% in 39 days implies ~$38,400
2022: -15% in 13 days implies ~$66,300

Each episode coincided with bear market lows. One-year performance after those elections: +24%, +45%, +92%. Context matters: all three occurred during deep bear markets, and 2022 overlapped with the FTX collapse. Pattern is notable but not predictive.

Major Crypto Performance Since October 1

ETH: $2,272, -15.4%. Underperformed month-to-date, but declined less than BTC post-hack: ETH -2.8% vs BTC -4.7%. ETF selling remains persistent.
XRP: $1.256, -15.7%. Only top-five coin positive over 24 hours: +0.6%.
BNB: $698, -9.2% month-to-date; -6.2% since the Binance hack.
Solana: $92.52, -21.7%, weakest among top six.
Dogecoin: $0.0744, -21.3%.

Further declines among other majors: Sui -24.7%, Chainlink -22.6%, Avalanche -22.3% since October 1. Hyperliquid’s HYPE fell 10.3% since the hack. TRON is comparatively resilient at -4.2% for the month and +2.2% today.

Solana technicals: SOL lost its 200-day EMA at $98.11 and trades near $92. Next swing low: $83.50, about 10% below current price.

SOLUSDT 1D chart. Source: TradingView

On-Chain Positioning

Glassnode reports that late September saw the largest spike in profitable selling since December 2024 for recent buyers. A month later most are selling at a loss, while bitcoin:native shows minimal movement. This indicates rapid sentiment reversal in altcoins relative to BTC.

What Could Stabilize Prices

Election clarity: First polls close at 7pm ET. A decisive outcome reduces policy uncertainty.
ETF reversals: Net inflows into Bitcoin and Ether ETFs would signal institutional dip-buying.
Hack funds immobilized: Frozen or inactive hacker wallets lower forced-sale risk. $3.24 billion remains unlaundered; further freezes reduce overhang.

Current downside drivers: supply risk from hacked funds, sustained ETF outflows, election-related policy uncertainty, and tighter macro conditions. Buyers have not yet emerged at scale.