Market Commentary

THE BINANCE HACK: WHAT HAPPENED AND HOW TO READ IT

The week's central event was, without doubt, the attack on Binance. On Thursday night the exchange — the world's largest by volume — disclosed a security incident with an estimated impact of USD 6.3B, making it the largest theft in the history of Digital Assets, beyond any precedent. The initial investigation points to a compromised engineer's setup, which reportedly allowed access to a service container and the sending of unauthorized withdrawal transactions from its hot wallets (those connected to the internet for operations). On-chain analytics firms link the attack to the North Korean group TraderTraitor — the same one flagged for the USD 1.5B Bybit hack in February 2025, on method similarities — though that attribution is not yet officially confirmed.

Beyond the scale, what matters for the investor is the system's response, which worked quickly. Binance suspended deposits and withdrawals immediately as a containment measure and committed to cover 100% of the losses with its own capital and its emergency asset fund, so that, per the company, client balances are protected. In parallel, the issuers of the main stablecoins froze close to USD 3B of the stolen funds: Tether more than USDT 1,567M, Circle more than USDC 800M, with Ripple joining the freeze. The exchange estimates resuming withdrawals around Sunday — after completing a security review of its withdrawal service — and will publish a post-mortem report once the investigation closes.

The calm read is twofold. On one hand, it is a serious event that tests confidence and again exposed the concentration and custody risk at large centralized intermediaries. On the other, the industry's defense mechanisms — asset freezes, loss coverage, on-chain traceability — acted as designed, and there is to date no sign of a solvency problem. It is, above all, a reminder of why custody discipline — asset segregation, counterparty diversification and institutional frameworks — is the first pillar of capital preservation.

THE FED HOLDS, BUT WITH A HAWKISH TONE

On the macro side, the week was already loaded before the hack. On October 28 the Fed held rates in the 3.75%–4.00% range, as the market expected, but the message was harder than anticipated. The decision came with a split vote of 10 to 2: Governor Lisa Cook — in her first dissent since joining the Committee in 2022 — and Cleveland Fed President Beth Hammack voted for a quarter-point hike. A central bank in which two members want to raise — and none to cut — makes clear the restrictive bias remains firm and the door to a December hike stays open.

Confirmation came the next day. September PCE — the price index the Fed watches as its preferred inflation gauge — accelerated to 3.6% year over year, with core inflation (excluding food and energy) rising to 3.1% from 3.0%; the print came in line with expectations but marked an acceleration. That same day, third-quarter GDP grew 3.4%, above forecasts. It is the combination that underpins the hawkish case: a strong economy with inflation still above target gives the Fed room — and reason — to keep tightening. For Digital Assets, the implication is that of recent weeks: with high rates, the price of an asset that pays no coupon finds a ceiling.

The effect was felt in traditional safe havens: gold again traded below USD 4,000, a level it had pierced last week for the first time since July, as the rebound in rate expectations lifted real yields. It was a week in which neither gold nor Digital Assets offered a hedge — both gave ground — a reminder that when the dominant factor is the cost of money, nearly all risk assets move in the same direction.

Bitcoin (BTC): Trades at USD 77,500 (-4.1% versus the prior Friday's reference). BTC started the week near USD 80,000 and held through the first days — even with inflows into its ETFs — until Thursday, when the hack announcement, on a market already strained by the Fed, unleashed selling. The drop extended into Friday's early hours, when price marked a six-week low around USD 76,100–76,400, its lowest since mid-September, before recovering the USD 77,000 area. An on-chain data point helps frame the level: BTC is trading around the average cost basis of short-term holders — the price at which those who entered in recent months bought — a zone that has historically marked the transition from bear to bull market. BTC dominance rose, as it fell less than the rest. Support at USD 76,000 and, below, USD 74,000; resistance at USD 80,000 and USD 81,840.

Ethereum (ETH): Trades at USD 2,250 (-5.1%), after losing the USD 2,300 level it had defended in October and touching a low below USD 2,200. ETH remains the laggard of the institutional channel — its ETFs strung together a fifth week of outflows — and also carried a large share of Thursday's liquidations. Until it reclaims USD 2,300, the short-term bias stays weak. Support at USD 2,150–2,200; resistance at USD 2,300–2,400.

Solana (SOL): Trades at USD 97.00 (-5.4%), among the hardest hit of the three. It lost the USD 100 psychological level it had defended in prior weeks and fell to the USD 94–95 area — its weakest point in months — before stabilizing near USD 97. It was already under pressure from its ETF outflows before the hack, which worsened the move. USD 90 becomes the next relevant support to watch; to recover, it needs to reclaim USD 100. Support at USD 90–95; resistance at USD 100–103.

The mechanics of the drop confirm its nature. Thursday's episode triggered close to USD 1.57B in liquidations over 24 hours, of which around 84% were long positions (bullish bets that close automatically when price falls). Jordan Schlosser, co-founder of IPX Exchange, summed up the move with a figure: futures open interest fell just 1.4% against a 3% price drop, which he described as "a leverage flush rather than an exodus." The selling did not come from underlying investors unwinding spot positions, but from the forced closing of leveraged bets that could not withstand the double blow of macro and headlines.

That distinction matters for positioning. A drop built on liquidations leaves, once purged, a market with less leverage excess and a healthier base from which to stabilize. Two on-chain indicators accompany that read, though with signals pointing in different directions. The first is that BTC trades around short-term holders' cost basis, a zone from which the market has tended to rebound. The second is the Coinbase Premium — the price gap for Bitcoin between Coinbase, the main venue for U.S. investors, and global exchanges — which hit its lowest level in four years; the last time it was this depressed was November 2022, after the collapse of FTX, near a cycle low. It is worth reading precisely: in the near term it indicates the U.S. spot buyer is absent, which coexists with the ETF inflows but does not confirm them. Historically, levels this depressed have coincided with market bottoms, but this is a sentiment signal, not a leading indicator. It guarantees nothing; it does temper the panic.

Relative behavior again favored BTC — it fell less than ETH and SOL and its ETF channel closed the week positive, despite Friday's outflow — the rotation toward quality typical of stress moments.

Expected volatility for the week ahead: high. The Binance withdrawal reopening expected on Sunday, the digestion of the Fed's tone, and the November 3 midterm elections make for a sensitive start to the week. Any surprise around the Binance process can move price forcefully.

BTC: +USD 31.3M, a second straight week in positive territory, though by a narrow margin. The story is in the daily distribution: buying was strong Monday through Thursday (+110.3, +176.0, +137.3, +17.2), but on Friday the institutional channel turned to selling with a USD 409.5M outflow as the hack's impact set in. On a net basis the week closed green, but Friday's move shows institutional demand was not immune to the shock: it held for four days and gave way on the fifth. In perspective, over the prior 30 days BTC ETFs were already net negative, so the month's balance has yet to reverse. The underlying read holds — the drop was above all an event of sentiment and leverage — but it is worth watching closely whether Friday's outflow was an isolated episode or the start of a turn.

ETH: -USD 335.3M, a fifth straight week of outflows that confirms ETH as the weakest link. The absence of a catalyst of its own and the pressure of an adverse macro backdrop keep ETH's institutional demand in negative territory; it will take a sustained turn in flows to reverse the picture.

SOL: -USD 71.6M, a fourth negative week and, this time, of larger magnitude. The outflow accelerated versus prior weeks and helps explain why SOL was among the hardest hit in price. Institutional interest in SOL has yet to reactivate.

Coinbase, Q3 2026. On the corporate front, Coinbase reported results Thursday after the close: net revenue of about USD 1.22B (below the USD 1.23B consensus and 35% lower than a year ago) and net profit of USD 719M that came mostly from unrealized mark-to-market gains on its holdings (USD 715M), not the operating business — adjusted net income was USD 78M. The operating picture, however, is better than the headline suggests: adjusted EBITDA reached USD 333M, up 60% from the prior quarter and above expectations, in its fifteenth consecutive positive quarter. The read is instructive: the transaction business cooled with the market — trading revenue fell 44% year over year — but recurring revenue held, with subscriptions and services at USD 570M, now 49% of net revenue, and a prediction markets business that passed USD 200M in annualized revenue. It reflects an industry maturing and diversifying its revenue beyond trading.