Liquidation Wave Resets Market

GM Anon!

What a week. The market got hammered with one of the heaviest liquidation waves we’ve seen in years — majors pulled back, alts were wrecked, and memes got washed out. But while the charts looked ugly, the headlines didn’t stop. ETFs flipped negative, Solana kept dropping big DAT news, stablecoins hit records, and BNB quietly pushed higher.

A brutal tape, but packed with developments.

Now let’s get into it.

TLDR

• Markets saw the sharpest liquidation in almost two years, with majors and alts hit hard.

• BTC held above $100K but lost momentum, while ETH dipped under $4K.

• SOL, DOGE, and ADA suffered steep double-digit weekly losses.

• Memes were hit hardest, with PUMP and HYPE leading the declines.

• Outliers: PNKSTR reached new highs, TROLL won a Coinbase listing, BNB stayed near ATH.

• ETF flows flipped negative, with BTC and ETH funds seeing heavy redemptions.

• Global regulation advanced — Australia, Canada, UAE, and U.S. hearings on crypto rules.

• Stablecoins hit a record $294.8B; ETH overtook TRX as top USDT chain.

• BNB DeFi momentum grew, led by ASTER, STBL, and AVNT.

• Smart money rotated: Solana wallets piled into SPARK, Tokabu, and 1, while trimming FLIPR, 67, and KLED.

Market Update

Markets endured their sharpest liquidation in nearly two years this week, a capitulation-style flush that drove alts down across the board as equities also wobbled. BTC remains north of the six-figure line but has lost momentum, while ETH briefly dipped under 4K before rebounding. The heaviest pain showed up in high-beta names: SOL, DOGE, and ADA all suffered double-digit weekly declines, and memes were hit hardest with PUMP sliding, HYPE spiking to new highs before crashing under 50, and SOL-based memes bleeding out.

PNKSTR managed to notch another ATH, while TROLL secured a Coinbase listing, highlighting how selective flows persist even in stress. BNB, by contrast, held close to record highs thanks to on-chain DeFi strength. The takeaway is simple: majors bent but didn’t break, while retail-led beta saw the washout.

ETF flows reinforced the sell pressure. On September 26, BTC ETFs lost more than $400M and ETH ETFs shed over $250M, flipping midweek inflows into net outflows and dragging AUM sharply lower. That scale of redemption explains the synchronized dump across majors and alts. Even with BTC clinging to six figures, institutions are clearly de-risking, and the bleed is especially visible in ETH and SOL. Armstrong’s call for BTC to reach $1M by 2030 made headlines, but near-term positioning shows the opposite—large investors cutting rather than adding.

Regulatory developments continued to move forward despite the volatility. Australia confirmed platforms will need licenses, the Bank of Canada called for stablecoin oversight, and the UAE joined a tax-reporting agreement. In Washington, the Senate set a hearing on crypto taxation, Democrats leaned into bipartisanship on a wider bill, and the CFTC allowed stablecoins as collateral for derivatives, bringing practice into line with reality. 

The Treasury opened consultations on GENIUS, Atkins floated an “innovation exemption,” and the White House is vetting Sterling for CFTC chair. Politics intersected as pro-BTC Calderon entered the California governor’s race. Europe’s finance ministers mapped out a digital euro, while the ECB admitted it is unlikely before 2029. Kazakhstan went live with its own stablecoin, Ohio agreed to take crypto for state fees, and China struck a different note by pausing RWA tokenization.

Stablecoins and tokenized money kept building out. ETH reclaimed the USDT lead from TRX, aligning with Vitalik’s emphasis that low-risk DeFi will dominate ETH’s future. Nine EU banks launched a euro stablecoin, and XRP with Securitize pushed RLUSD into funds like BUIDL and VBILL. Hyperliquid listed USDH, and Plasma announced a stablecoin-focused neobank. USDT reportedly seeks funding at a $500B valuation, while Circle is experimenting with reversible transactions to suit institutions.

TradFi rails widened too. Grayscale launched its first index-based ETF, GSR filed for a DAT product, and FINRA approved tZERO for tokenized corporate debt. Forward Industries will tokenize its stock, and Franklin Templeton brought Benji to BNB Chain. Access widened as Morgan Stanley opened crypto to E-Trade clients, PayPal rolled out P2P transfers, WLFI prepared a debit card, and ReserveOne filed for a SPAC merger. Infrastructure saw Coinbase and Cloudflare launch the x402 foundation, Tempo line up new partners, and Bubblemaps pitch itself as the “Wikipedia of investigations.”

Perps trading remains the sharp end. Hyperliquid’s share slipped to the high-30s, still dominant but pressured by a Justin Sun-backed venue, OKX’s launch of 0G perps, and Kraken’s planned Yield Basis product. Yet its moat deepened: MetaMask now routes perps through Hyperliquid, and USDH launched there, cementing stickiness. The paradox is clear—competition is real, but liquidity depth still anchors Hyperliquid.

On-chain, BNB has been the standout. Its token hit fresh highs as projects like ASTER, STBL, and AVNT led BSC DeFi. ASTER ran before cooling near a $20B FDV ahead of its October 5 airdrop, STBL pledged 100% of minting fees to buybacks, and AVAX rode momentum on a $550M DAT announcement. This rotation highlights how BNB DeFi is attracting flows even as SOL and other alts fade.

Corporates and treasuries continued to buy. BTC saw major accumulation from Metaplanet ($633M), Strategy ($100M), and B HODL ($11M). ETH exposure grew via BitMine’s $69M purchase and ETHZilla’s $350M debt raise. SOL was added to Fitell’s $100M treasury and Helius Medical’s $176M buy. Flora Growth set up a $401M 0G treasury. Equity-market buybacks also added fuel, with DeFi Development boosting to $100M and Thumzup to $10M.

On-chain protocols were active as well. STBL committed 100% of minting fees to buybacks, an aggressive approach to treasury management, while PUMP buybacks slowed to 2-month lows, underscoring meme-driven fragility. Smaller plays kept building: NFT Strategy tokens debuted strongly, Punk Strategy added another Punk, Myriad crossed $1M in weekly volumes, and Rekt Drinks hit 1M sales.

Exchanges and M&A reshaped the map. Naver is set to acquire Upbit in an all-stock deal, signaling a web2-to-exchange crossover. Bakkt surged on a new board appointment. CZ denied outside-capital rumors even as his YZi fund may broaden, while deepening support for Ethena. SBF’s “gm” tweet sparked an FTT pump, though FTX’s real story is in court: the trust sued Genesis for $1.15B in clawbacks and lined up another $1.6B payout to creditors. Strive also moved to buy Semler Scientific in stock, another sign of traditional companies leaning into digital assets.

Market Data Points

This week saw crypto markets endure their largest liquidation event in months — the heaviest since summer 2023 for ETH and SOL, and since June for BTC. A swift drop in majors sparked a cascade of forced unwinds, erasing leverage and dragging open interest sharply lower. 

ETH slipped below $4K, SOL gave up a chunk of its recent rally, and BTC faced its biggest flush in three months. Funding briefly flipped negative, showing sentiment turned defensive. While painful in the short term, these deep liquidations often reset positioning and clear the way for more sustainable moves ahead.

BNB recently pushed into fresh all-time highs, backed by a clear surge in on-chain activity with monthly active addresses now above 55M. At the same time, ASTER — the new perpetuals DEX on BNB Chain — has gone parabolic since launch, quickly positioning itself as real competition to players like Hyperliquid. 

The combination of a flagship token at record levels and a breakout protocol drawing serious traction highlights how momentum on BNB Chain is being fueled by both adoption and innovation, making it one of the ecosystems to watch closely going forward.

Stablecoin market capitalization has surged to a fresh all-time high of $294.8B, climbing $4.25B (+1.46%) over the past week. This development highlights the sector’s accelerating role as crypto’s primary liquidity base, with USDT maintaining a dominant 58.7% share. 

The expansion signals both rising demand for dollar-pegged stability and deeper integration of stablecoins into trading, DeFi, and settlement infrastructure. Historically, ATHs in stablecoin supply have aligned with stronger inflows into crypto markets, suggesting that liquidity conditions are turning increasingly favorable for risk assets.

Ethereum has reclaimed its spot as the leading network for USDT, with supply climbing back to $80B and overtaking Tron. The flip signals a renewed preference for Ethereum’s deeper DeFi ecosystem and institutional-grade infrastructure, even as Tron continues to offer cheaper transfers. 

With nearly 1M daily stablecoin transactions on Ethereum, the shift highlights active usage for payments and settlements—not just passive holdings. As traditional finance integrates stablecoins into payment rails, Ethereum’s institutional credibility and regulatory clarity appear to be tilting the balance in its favor, reinforcing its role as the dominant settlement layer.

Majors & Memes

The majors had a rough week as the Fed’s cut was followed by broad risk-on rotation that didn’t favor large caps. BTC slipped -5.2% to trade near $109K, holding up better than most but still retracing. ETH lagged badly, down almost -10% at around $4K, while SOL was the weakest of the top coins, dropping -14.3% to below $200. ADA also underperformed, losing -11.7%, with DOGE off -12.4%. XRP fell -7.1%, and BNB pulled back a milder -2.5% after recently breaking above $1K. TRX was the only top-10 gainer, managing +1.8%.

While majors corrected, mid-caps delivered the real momentum. APEX exploded +660%, and AIC surged +158%, the week’s two standout parabolic moves. ASTER rallied strongly again, up +134%, reinforcing its status as one of the hottest new tokens. MERL jumped +58%, SNX climbed +57%, and AVNT added +55%, highlighting strong rotation into DeFi and scaling narratives. Other notable winners included BARD (+22%), BORG (+22%), FLUID (+20%), ZRO (+18%), and ZEC (+14%), with a broad spread of mid-cap outperformance across infrastructure and L1 tokens.

On the losing side, high-flyers from earlier weeks were hit with sharp reversals. SYND dumped -42%, FORM fell -41%, and B collapsed -37%. FARTCOIN dropped -29%, while MOG retraced -27%. PUMP bled another -27%, highlighting fatigue in Solana meme plays. Other notable losers included REKT (-25%), HASH (-24%), PI (-23%), RSR (-23%), and BIO (-23%), showing a broad reset across speculative and narrative-heavy tokens.

Mindshare

Smart money attention across memes has been anything but evenly spread, with a handful of names clearly dominating narrative focus while others drifted into the background.

The clear leader this week was TROLL, which consistently held the largest slice of attention through the entire period. Even during volatility midweek (around Sept 22–23), TROLL maintained dominance, confirming it as the anchor meme in current rotation.

CARDS was the other major focal point, staying near the top of the stack for most of the week. Its ability to hold attention even as other names swung in and out shows it’s still viewed as a core meme narrative, lining up with recent accumulation flows we’ve seen into the token.

Newer entrants also made their presence felt. NYX rose sharply late in the week, carving out a significant share of mindshare by Sept 25–26. Similarly, SYND and QTO held mid-tier positions but with enough consistency to show they’re on smart money’s radar. ELIZABETH also punched above its weight during the midweek spike.

Other names like Mog, Tokabu, and SPARK stayed visible but didn’t break out, suggesting they remain tracked but not actively driving narratives. pwease, USDUC, TRWA, and Block also fit into this “present but not dominant” category.

At the bottom, $PAAL and EXO barely registered, indicating little traction in terms of attention despite being in the mix.

Smart Money Accumulation

With risk assets wobbling post-Fed, Solana wallets show the same pattern—no wholesale exit, just sharper positioning as traders crowd into momentum names and slash laggards.

SPARK continued to build momentum, rising 12% over the week to pass $1M in balances, reinforcing its status as a core smart money holding. Tokabu was another standout, jumping 50% to more than $570K, one of the strongest inflows across the ecosystem. Interest also picked up in 1, which climbed 46% to $220K, showing fresh allocations into smaller caps. CARDS was steady with a small 1.1% gain, but at nearly $2M it remains the single largest smart money position in this set.

The de-risking side was more dramatic. 67 saw allocations slashed by 42% to $328K, while KLED dropped 39% to $586K. FLIPR was the hardest hit, down 60% to $276K, showing a decisive exit. PUMP also continued to lose favor, down 17% despite still holding nearly $700K. STREAM fell 11% to $69K, while TRENCHER stayed flat with no new inflows.

The pattern shows a market that is still risk-on but highly selective. Capital is flowing decisively into momentum-driven names like Tokabu and SPARK, while stalwart positions like CARDS remain firmly held. At the same time, sharp cuts in FLIPR, 67, and KLED reflect traders reducing exposure to weaker or overextended plays.

Smart money activity across the EVM ecosystem this week has been relatively muted, with only a handful of tokens showing meaningful shifts. Instead of broad rotation, flows look more like quiet repositioning with selective adds and trims.

CULT was one of the few clear gainers, up 10.1% to $338K, showing that some wallets are still willing to scale into community-driven names despite softer market sentiment. ANDY also stood out with a 14.4% increase to $214K, albeit from a smaller base, hinting at opportunistic buying in less crowded plays. SPX was flat but edged higher (+0.02%) to $1.37M, still holding the top balance in this set.

Most other majors saw light trimming. TRWA slipped 0.8% to $925K, APU eased 0.4% to $347K, while Mog and PEPE were effectively unchanged but slightly red. BITCOIN allocations barely moved (-0.06%), holding steady at $476K, and SHRUB was flat at $92K. The notable outlier was Block, which dropped 19.3% to $222K, marking the only decisive reduction of the week.

Overall, with majors like ETH underperforming and macro tone mixed, the EVM side looks less rotational than Solana, more about holding conviction in core plays and quietly testing new bets.

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