Binance security breach triggers widespread market panic

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Anton Kharitonov

Yesterday

Binance security breach triggers widespread market panic — Bitcoin faces deeper losses amid hacks

The main catalyst for the selloff was a massive cyberattack on Binance, the world's largest cryptocurrency exchange, which triggered a sharp deterioration in investor confidence in the security of centralized trading platforms. During the overnight decline, Bitcoin fell to approximately $76,500–76,700, reaching a six-week low. At the same time, Ethereum, Solana, and XRP also faced heavy selling, while BNB, directly linked to the Binance ecosystem, initially lost more than 7–8%. Large-scale liquidation of leveraged long positions amplified the market's initial reaction, turning a localized selloff into a broader decline across cryptocurrency assets.

BTC price prediction

24H -0.56%

$77,782.19

48H -0.19%

$78,078.5

7D -3.52%

$75,468.1

1M -3.44%

$75,529.13

3M -25.94%

$57,934.27

6M -42.24%

$45,181.03

12M -9.51%

$70,786.2

Detailed

Current price: $78,223.45 789.77 1.02%

Real-time Data 09:12

Daily range 77517.2

78221.91

Weekly range 76325.98

81971.00

Market participants are primarily focused on the circumstances surrounding the Binance hack, which occurred on the evening of October 29. According to preliminary data from the exchange, the total value of affected assets is estimated at approximately $6.3 billion, potentially making the incident the largest cyberattack in the history of the cryptocurrency industry.

The initial investigation points to the compromise of a DevOps engineer's laptop, after which the attackers allegedly gained access to a service container and the ability to initiate unauthorized withdrawals. However, Binance states that it has found no evidence of cryptocurrency wallet private keys being compromised. The exchange temporarily suspended deposits and withdrawals to conduct additional security checks, revoked compromised permissions, and engaged specialized analytics firms to trace transactions.

As of the morning of October 30, joint efforts had resulted in the freezing of approximately $3 billion in assets linked to the incident, including substantial amounts of the USDT and USDC stablecoins. Binance has promised to compensate losses using its SAFU insurance fund and its own resources, although the final amount of irrecoverable losses and the method of intrusion are still under investigation. Thus, the immediate financial threat to customers may prove smaller than the initial estimate, but reputational damage and uncertainty surrounding infrastructure security are already exerting significant pressure on the entire cryptocurrency market.

Multiple exchange attacks threaten institutional trust

The situation is further complicated by the fact that the attack on Binance was not the only major incident in the cryptocurrency industry. On October 29, prediction market platform Polymarket temporarily suspended international trading after discovering unauthorized withdrawals of more than $2.6 million in user funds. According to preliminary information, the cause may have been the compromise of a third-party technology service provider, although there is currently no evidence linking this incident to the Binance hack.

Additional concerns stem from a series of previous attacks, including the September Bitget hack, which caused several hundred million dollars in losses, and the theft of approximately $1.5 billion from Bybit in February 2025. Analytics firms TRM Labs and Chainalysis have linked the latest Binance attack to the North Korean hacker group TraderTraitor, although the investigation is still ongoing. According to Standard Chartered analysts, pressure on cryptocurrencies could persist until more complete information emerges about the mechanism of the hack and the fate of the frozen assets.

A particular concern is the potential change in the behavior of major investors, who may begin reducing their holdings on centralized exchanges and reallocating capital toward self-custody and decentralized platforms. However, such an infrastructure shift would take time and could temporarily reduce spot market liquidity, increasing the magnitude of BTC/USD price fluctuations even in the absence of further attacks.

Liquidations and options expiry increase downside risks

Additional pressure on Bitcoin comes from the coincidence of the security crisis with deteriorating global demand for risk assets. Following Alphabet's sharp decline of more than 12%, investors reacted negatively to forecasts from Amazon and Intel, causing Nasdaq 100 futures to fall approximately 2.3% on October 30. Against this backdrop, the cryptocurrency market experienced a large-scale reduction in speculative positions: according to CoinGlass, total liquidations over 24 hours approached $1.5 billion, including around $468 million in Bitcoin, with the majority of liquidated positions belonging to buyers.

Of particular significance is the fact that the selloff occurred despite continued capital inflows into U.S. spot Bitcoin ETFs. Between October 26 and 28, total inflows amounted to approximately $423.7 million, while the funds attracted another $17.1 million on October 29, extending the positive streak to four consecutive trading sessions. However, the relatively modest inflows on the final day were insufficient to offset accelerated selling on cryptocurrency exchanges and in the derivatives market.

Another source of short-term volatility was the expiration of approximately $11 billion worth of Bitcoin options contracts on Deribit on October 30, increasing price sensitivity to changes in market-maker positioning. Thus, the current decline reflects a combination of several negative factors: a crisis of confidence in trading platforms, forced liquidation of long positions, and declining investor appetite for high-risk assets.

This entire "set" of negative factors, as noted in BTC/USD faces renewed selling pressure as $79,500 support comes into focus, could well trigger a much larger wave of liquidations, potentially leading to a break below support around $75,000 and a decline toward $70,000. Rebounds toward $80,000 could be used as selling opportunities; a break above this level would lead to a rise toward $81,000–82,000.

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