BitMart founder Sheldon Xia has confirmed a second exchange security incident, according to a recent post on X. Initial investigation indicates there may be a link between this hack and the attackers who exploited Mercado Bitcoin for $38 million to $49 million.
The two potentially connected hacks emerged within just 24 hours, adding to market uncertainty already driven by macro fears and Binance’s $6.3 billion exploit.
On-chain movement and altcoin sales
On-chain investigators are tracking where the funds went. Data shows 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 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.
The Mercado Bitcoin 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.
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.
Ethereum in focus
As the largest altcoin by market cap, Ethereum is now in focus. From a technical perspective, ETH is trading above $2.3k, and RSI remains in neutral territory. On the ETF side, 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.
However, the bigger risk is what happens next. If the hacker starts dumping the $18.19 million worth of ETH, Ethereum could get hit by negative selling pressure and push sentiment lower.
With 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.
