Altcoin Slump Deepens as Binance Hack Claims Roil Market; Volatility Seen Around U.S. Midterm Elections

Market Recovery Unclear After Hacking Claims

Ether Slides to Around $2,170

XRP Falls Into the $1.23 Range; Solana Near $95

Any Rebound Likely to Lack Momentum

Weakness in the altcoin market is deepening after allegations of a major hack at Binance, the world’s largest cryptocurrency exchange. Investor sentiment has yet to recover even after the Federal Reserve’s Federal Open Market Committee delivered an outcome viewed as less hawkish than expected. Market watchers are urging caution, saying volatility could increase around the U.S. midterm elections.

The latest shock to the market was the hacking allegation that surfaced on Nov. 29. Concerns about a possible breach emerged after large fund movements were detected from a Binance hot wallet, which is connected to the internet. Arkham, a blockchain analytics firm, estimated that the wallet believed to belong to the attacker held about $5.7 billion in assets. Binance said it froze $2.54 billion of that amount. Investigators are still examining whether an actual hack took place and the precise scale of any losses.

The altcoin market had already been in a downtrend. According to South Korean cryptocurrency exchange Upbit, Ether, which traded in the 3.6 million-won range in early September, has recently fallen to around 3 million won, or about $2,170. XRP broke below 2,000 won and slid into the 1,700-won range, or about $1.23, while Solana was trading weakly near 132,000 won, or about $95. Over the past week, about 265 of the top 300 cryptocurrencies by market capitalization have declined. Their simple average weekly return was minus 9.2%.

Some analysts say any rebound in altcoins could be weaker than Bitcoin’s. Bitfinex, a global cryptocurrency exchange, wrote in a weekly research report that even if the market rebounds, Bitcoin is likely to rise first, with altcoins following later. If the market falls again, losses in altcoins could reach twice those of Bitcoin, it added.

The macroeconomic backdrop is also weighing on the market. The latest FOMC outcome was viewed as less hawkish than expected because the Fed did not strongly signal further rate increases. But rising oil prices and persistent inflation pressures have limited any recovery in sentiment toward altcoins.

Uncertainty over U.S. cryptocurrency regulation is also pressuring the market. Senate discussion of the Clarity Act, a bill on crypto market structure, has been delayed. At the same time, the U.S. Treasury Department, the Securities and Exchange Commission and the Commodity Futures Trading Commission are continuing to refine the regulatory framework. Policy uncertainty around the U.S. midterm elections, along with volatility in the stock market, is also seen as a factor that could shape short-term trading.

Some analysts are also warning about the risk of further declines. Crypto analyst Benjamin Cowen said that although the Fed held rates steady, producer prices recently came in higher than expected and rising oil prices could lift inflation again. Even if Bitcoin rebounds, he said, the market could still retest its lows in the fourth quarter.

Kang Min-seung, Bloomingbit reporter