Flows Turn Cautious, Rails Keep Growing

GM Anon!

The market feels like it’s standing on a fault line, but not in a purely negative way. Two camps have emerged: one calling this the start of a new bear, the other arguing we’re breaking the usual four-year mold and stretching into a longer, more extended cycle. 

In the very short term price action is messy, yet structurally the backdrop for crypto still leans bullish. The macro environment is quietly improving: with the U.S. government reopened, the Treasury General Account that drained liquidity during the shutdown is set to come down, and the Fed ending quantitative tightening from December 1 should tilt conditions toward easier funding over time.

Price, for now, hasn’t fully reflected that shift. BTC has slipped back below the $100K mark, a technical break that highlights cautious flows and a more selective risk tone rather than outright capitulation. Until we see a clear turn in institutional flows and genuine net spot buying, crypto sits in a tug of war between better medium-term mechanics and a short-term tape still in repair mode — which is often where the next set of opportunities is seeded. Let’s break down this week!

TLDR

• Market at a pivot: short-term ugly, but TGA drain and QT ending in December keep the medium-term crypto backdrop bullish.

• Global mood is risk-off as tech stocks sell off, Japan 10Y hits 2008 highs, and the next US jobs report skips the unemployment rate.

• BTC slipped back below $96K/$100K with $1B in liquidations, underperforming stocks and dragging sentiment back toward early-March lows.

• ETF flows are net negative (BTC/ETH outflows), but IBIT hit an ATH daily inflow and Tether added $97M BTC, showing buyers still step in.

• Institutional surveys remain constructive: most plan to increase or maintain crypto exposure, treating volatility as an entry, not an exit.

• Majors are in retrace (BTC, ETH, BNB, SOL, DOGE, ADA all down), with only a few names like XRP/TRX holding up and alts showing extreme dispersion.

• Solana activity has reset, with 7D active addresses at a 12-month low (~3.3M) after the early-2025 memecoin/bot spike faded.

• DeFi keeps institutionalising via Lido/dYdX buybacks, Vitalik’s “savings” framing, and new primitives like USDsui, JPM Coin and tokenised deposit insurance.

• Payments and prediction rails are expanding through stablecoin integrations (Cash App, Visa, StanChart, SoFi, OKX) and new prediction venues (Polymarket, CME/FanDuel).

• Smart money is de-risking but not disappearing: Solana and EVM meme wallets mostly trim or sit tight, with only selective adds into names like BELIEVE, SURGE, CULT and BOOE.

Market Update

Global markets stayed firmly risk-off as a broad stock sell-off deepened on growing tech bubble fears, with Japan’s 10-year yield hitting its highest level since 2008 and adding to nerves around long-end rates. Policy signals were mixed: Trump’s push for tariff cuts framed as an affordability move landed against a backdrop of uncertainty, with the U.S. October jobs report set to skip the unemployment rate and remove one of the market’s key reference points. 

That caution has fed straight into crypto. BTC has dropped below $96K as 24-hour liquidations hit $1B, with BTC now performing the worst against stocks since 2022 and crypto sentiment sliding back toward early Feb/March lows. BTC ETFs have logged their second-highest ever daily outflow, highlighting how quickly passive and institutional money can lean away when volatility spikes, even as JP Morgan points to support around $94K rather than a full break in structure.

On the activity side, SOL is feeling the hangover from its speculative phase, with active addresses falling to a 12-month low, while ZEC has been volatile around heavy DAT activity and a rising shielded share of supply. The broader message is a market that remains willing to experiment at the edges but is clearly more defensive at the core.

Institutional product and treasury flows continued to build out in parallel with the drawdown. On the BTC side, the picture is split between heavy aggregate ETF outflows and targeted demand: IBIT recently recorded an all-time high single-day inflow, while Tether bought another $97M in BTC and is planning deeper expansion into gold as part of its broader reserve strategy. Sovereigns and central banks are edging in as well, with the Czech central bank buying BTC for a “test portfolio,” Taiwan studying a BTC reserve and Kazakhstan preparing a $1B crypto reserve.

In the structured-product space, Strategy’s basic mNAV has fallen below 1x with diluted mNAV at 1.2x even as the firm doubles its STRE offering to 715M and DATs move into focus, with Upexi the latest DAT to announce stock buybacks. At the same time, XRP is being positioned as the next institutional narrative, with Canary’s XRP ETF pulling in $58M on day one, and more XRP ETFs are set to launch with DTCC listing five spot XRP ETFs and adding a Bitwise ChainLink ETF. Meanwhile, FTX creditors are being guided toward a next payout window around December or January.

On-chain sectors and payments rails are evolving quickly despite the near-term price pressure. In DeFi, Lido has proposed enshrined buybacks and dYdX plans to channel 75% of protocol fees into DYDX buybacks, moves that line up with Vitalik’s argument that DeFi as a form of savings is finally viable and his “Trustless Manifesto” for ETH.

SUI has unveiled its USDsui stablecoin, while JP Morgan has introduced its deposit token JPM Coin and FDIC is considering tokenised deposit insurance, with FASB weighing a crypto transfer project that would further normalise digital assets in accounting standards. On the user-facing side, Cash App will enable stablecoin payments, Visa is piloting USDC payouts for creators, StanChart and DCS are partnering on a stablecoin credit card, SoFi is launching crypto trading, and OKX has rolled out in-wallet DEX trading.

Prediction markets are also in the spotlight: Polymarket has relaunched its U.S. platform in beta and is collaborating with Yahoo Finance and PrizePicks, while CME Group and FanDuel plan to launch a U.S. prediction market, signalling that on-chain and regulated venues are converging around event-driven trading.

Regulation, legal risk and corporate strategy round out the picture of a maturing but contested landscape. Europe is working toward tight crypto controls by 2027 and the UK has proposed capping stablecoin ownership at 20K GBP, while the CFTC plans leveraged trading on regulated exchanges and Atkins has unveiled a “token taxonomy” proposal to bring more clarity to asset classification. Legal friction remains visible as prosecutors seek a new trial for the MEV Brothers case after a mistrial, underlining that edge practices around value extraction remain under scrutiny.

At the same time, core crypto businesses are pushing deeper into public markets and institutional channels: Grayscale has filed for an IPO on the NYSE, Ledger is considering a New York IPO or fundraise, Bitfarms is winding down BTC mining operations as the economics of hashpower adjust. The net result is a market where prices and sentiment are under pressure, but the plumbing, rulebook and capital markets footprint for digital assets continue to advance.

Market Data Points

Rumors that Strategy offloaded ~47K BTC made the rounds this week, sparked by a dashboard read that implied a large reduction. Saylor publicly refuted it and added that they were buyers every day this week——aligned with their programmatic accumulation stance (and the fresh 487 BTC add disclosed earlier).

Survey data is still pointing in the right direction for crypto. Despite October’s drawdown, 61% of institutional respondents say they intend to increase their allocation, and another large chunk plans to hold current exposure, with only a small minority looking to cut. 

The rationale is classic institutional logic: most cite the expectation of better forward returns, portfolio diversification benefits, and the growing availability of institutional-grade, regulated products and service providers. In other words, volatility didn’t break the thesis, it gave professional investors a chance to add into an asset class they increasingly view as investable.

U.S. spot BTC ETFs have been bleeding since early October. The flow profile is mostly red with only a handful of green days. That’s a meaningful withdrawal of the marginal spot bid these vehicles provided through the summer—redemptions force selling or reduce the need to source coins, which tends to cap upside and exacerbate intraday fades.

It’s a de-risking phase more than a structural break: prior drawdowns also saw multi-week outflows that eventually flipped once volatility cooled and narratives improved. For confirmation that the tape is ready to trend again, you want to see (i) a turn to consistent +$ daily prints, (ii) breadth across multiple issuers, and (iii) a rising 5–10 day flow average rather than one-off spikes. Until then, rallies have a higher bar to clear.

Solana engagement has reset. The 7-day average of daily active addresses has slipped to ~3.3M — a 12-month low — down from >9M at the start of 2025 when memecoin issuance and bot-driven activity inflated counts. With that speculative flow fading, participation has normalized toward organic usage, which typically means softer fee revenue and thinner liquidity at the edges of the market.

Majors & Memes

Majors spent the week on the back foot, with most large caps posting clear retracements over the last 7 days. BTC fell about 7.9%, while major alts also rolled over, with ETH down 8.6%, BNB 6.8%, SOL 13%, DOGE 10.9% and ADA 12.9%. XRP held up relatively better at around -2.9%, and TRX was the lone major in the green, eking out a 0.5% gain. ETF data line up with this risk-off tone, with roughly $866.7M leaving BTC products and $259.6M flowing out of ETH funds on the latest day.

Below the top tier, rotation stayed very active into a handful of high-momentum stories. TEL led the tape with a 54.3% weekly surge, followed by SOON, AB, MET and ZANO, all posting gains north of 20%. UNI, WLFI, STRK, MORPHO, APEPE, GLM and others logged double-digit advances, and XMR also pushed higher, showing that traders are still willing to back targeted narratives even as headline assets correct.

The heaviest damage showed up in higher-beta altcoins and narrative plays. AR and FIL both dropped more than 40%, while ICP, ZEN and DASH were down around 30% or more. XPL, RAIL, SPX, JTO, H, and AI-linked tokens like FET, along with JUP, all saw declines in the mid-20s or worse as capital rotated out. Together with the negative BTC and ETH ETF flows and broad-based weakness in majors, the pattern points to a major derisking phase where investors are trimming exposure and concentrating only on a few standout winners.

Smart Money Accumulation

In current market conditions, activity has been muted, with most coins seeing position cutting. In the Solana meme ecosystem this week, smart money largely stayed cautious, keeping exposure concentrated and rotating only selectively rather than adding broad risk.

On the accumulation side, BELIEVE stood out again. Wallet count rose to 11 and balances climbed 13.04% to about $249.67K, keeping it the clearest high-conviction growth line in the basket. SURGE also attracted incremental buying, with balances up 3.52% to roughly $231.57K, while SPARK posted an 8.15% increase despite its smaller $88.76K size. 67 saw a marginal 0.63% lift to around $229.42K, suggesting it remains a steady secondary allocation.

Everywhere else the tone was defensive. KLED remains the largest dollar position at roughly $1.20M, but balances were essentially flat on the week at -0.08%, implying conviction to hold but little appetite to scale. The heavier trims hit Fartcoin (balances down 28.25% to about $579.75K) and 1 (-17.16% to $237.39K), with URANUS, DUPE and Tokabu also cut in the mid-single digits.

Smart money in the EVM meme ecosystem has been quiet for weeks now, and this past week kept that pattern intact. Activity stayed thin, volumes were low, and most positions saw only small adjustments as participants continued to wait out weaker majors and negative ETF flows.

On the risk-on side, CULT and BOOE were the clearest standouts. CULT balances climbed 28.02% to about $331.16K, while BOOE posted the biggest percentage increase, up 34.3% to roughly $68.09K. Smaller but still notable adds went into SHRUB and AP, with balances up 9.68% and 8.54% respectively, though both remain sub-$80K allocations. These look more like test probes than full-size conviction trades, but they show there is still some willingness to add selective beta.

Everywhere else the book looks like it’s on pause. Core holdings such as BITCOIN, APU, Mog and PEPE were essentially flat on the week, with near-zero changes despite PEPE still sitting at around $25.82M. Larger lines like TRWA (about $855K) and SPX (~$568.34K) edged lower, with balances down 6.14% and 1.59%, pointing to gentle de-risking rather than aggressive unwinds. Taken together, the muted flows and tight positioning confirm EVM smart money is still in wait-and-see mode, nudging into a few speculative names while keeping overall risk firmly capped.

That wraps up this post—we hope you found the insights valuable. See you next week, anon! 🚀