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The recent steep drop in the cryptocurrency market has impacted not just investors but also cyber criminals. Six distinct hacker wallets incurred losses exceeding $13.4 million due to panic selling during Ethereum’s rapid depreciation.
The Cycle of Panic Buying and Selling
According to a report by blockchain analysis firm Lookonchain, hackers sold 7,816 ETH for an average price of $3,728, resulting in approximately $29.1 million. However, this final transaction led to an additional loss of $3.37 million.
These hackers have previously made similar mistakes. Last week, cyber criminals who acquired 9,240 ETH for $39.45 million faced a sharp price decline, leading them to sell 8,638 ETH for $32.5 million, accruing a loss of $5.5 million. Consequently, the total loss exceeded $13 million in recent days.
On-chain data revealed that the hackers tended to buy during price increases and panic sell during declines. Derived from Lookonchain’s Arkham Intelligence data, these hackers repurchased 7,816 ETH after selling 8,638 ETH last week, only to offload these assets again during the recent plunge.
It was discovered that hacker wallets executed transfers involving millions of dollars in ETH and DAI (a stablecoin) through the CoW Protocol. Some transactions exceeded $6 million; one wallet exchanged 6.9 million DAI for 1,815 ETH through separate transactions.
Market Turmoil and Red Friday Effect
Researchers such as Specter Analyst and ZachXBT identified one wallet linked to a hacker who had previously stolen 400 BTC (approximately $35 million) from Coinbase. The address had converted some of the stolen Bitcoin 
$101,765 into Ethereum 
$3,417 earlier in October, but now appeared among the wallets suffering losses due to the market downturn.
Ethereum’s price closed the week in the red, trading 22% below its all-time high of $4,900. Coinglass data revealed that $269 million in ETH long positions were liquidated on Friday. Crypto analysis group Catalyst noted that “Ethereum has broken down from a descending triangle, indicating a bearish outlook.”
The harsh selling wave resulted in a second consecutive Friday with capital outflows exceeding $100 billion from the crypto market. Over the week, Ethereum’s value decreased by 1.5%, while Bitcoin fell 6.2% to 103,850 dollars before rebounding to 106,000 dollars.
CryptoQuant analyst Amr Tah observed a 30% rise in open interests (OI) in futures markets in the past week. He indicated that this increased investors’ risk appetite but that excessive leverage hastened the decline. Additionally, negative funding rates on Binance pointed to an accumulation of “overly short” positions in the market.
In conclusion, panic selling demonstrates that even criminals are not immune to market fear. On-chain data proves that even algorithmic traders cannot entirely escape human psychology. The volatility of Ethereum’s price reveals dangerous levels of leverage in the market. It is crucial for investors to exercise caution in the coming weeks to avoid severe losses due to sudden price movements.
