Crypto flashes red as ETF flows reverse

Markets shifted to a risk-off stance, with crypto sectors experiencing a broad sell-off while traditional assets remained stable. Bitcoin (BTC) fell 4.5%, dragging down the Nasdaq 100 and S&P 500. Miners and layer 2 solutions were exceptions, gaining 2.5% and 2%, respectively, due to optimism over scaling upgrades. In contrast, sectors like AI and decentralized physical infrastructure networks saw significant declines of over 13%. Traders reevaluated risk ahead of crucial economic reports, and the chance of a 25 basis point cut eased. Volatility increased as BTC dominance rose amid a downturn in altcoins. Institutional interest in Bitcoin ETFs waned in October, with substantial outflows totaling over $500 million after inflows peaked earlier in the month. This week saw a shift in ETF flows from accumulation to caution, highlighting changing market sentiment. The ongoing weakness in market liquidity and redemptions could prompt a more defensive trading strategy, potentially impacting altcoins and BTC volatility. Additionally, Morpho faced scrutiny following a vault curator’s significant losses, raising concerns over its permissionless model and promotional practices.

Source 🔗