State of the Market: A Risk-Off Turn as Yields and Oil Climb

Talos State of the Market is a weekly view of market structure, venue activity, derivatives positioning and flows across the digital asset landscape.

Weekly pulse

A Risk-Off Turn as Yields and Oil Climb

Markets entered October with softer U.S. employment data (29,000 jobs added vs. ~90,000 expected), pulling October rate-hike odds lower. Equities reached fresh highs on earnings and AI optimism even as yields continued to climb, while BTC struggled to hold its 2026 opening level near $87,500 as ETF inflows slowed.

Wednesday’s reversal pulled equities and BTC lower as strikes in the Strait of Hormuz pushed oil above $100 and the 30-year Treasury yield reached its highest level since 2002. More than $400 million in crypto longs were liquidated within an hour, while rising open interest and funding dipping negative suggested fresh shorts entering the selloff. Altcoins saw a sharper pullback, with ETH facing added pressure from signs that BitMine’s buying could soon slow. 

Source: Talos CM Market Data

Bitcoin’s relationship to macro assets has continued to shift beneath the surface. Equities had largely shrugged off elevated yields, supported by strong earnings and the AI buildout, before Wednesday’s selloff pulled stocks and BTC lower together. During September’s yield surge, BTC diverged from equities, trading inversely to the dollar (−0.55 correlation) and alongside gold (+0.6). Its correlation with the Nasdaq 100 has since recovered above 0.5, pointing to renewed sensitivity to equity market drivers.

With BTC increasingly trading like tech, AI demand and capex guidance from upcoming earnings could become key near-term drivers for digital assets. Easing yields or oil prices could also relieve pressure on BTC, opening the door to a more decisive move beyond its range.

Market performance

The total crypto market cap stands at $2.94T, down 1.2% over the past week. BTC declined by 0.4%, underperforming the S&P 500 (+1.6%) and Nasdaq 100 (+2.0%), while outperforming gold (-1.7%) as markets broadly turned risk-off. Breadth deteriorated sharply from recent weeks, with only 10 of the top 50 assets advancing, down from 37 of 50 just two weeks ago.

• Crypto Majors: BTC -0.4% | ETH -4.2% | SOL -1.6%, with ETH/BTC down 3.85% on the week as ETH absorbed the larger brunt of this week's liquidations.
• Top Gainer: Aave (AAVE) added 9% on the week 
• Market Breadth: 10 of the top 50 assets gained this week, with declining market cap outweighing advancing cap ($105.2B vs. $6.9B)

Source: Talos CM Market Data, Talos State of the Market Dashboard

Flows

• Spot Bitcoin ETFs saw $370M in net inflows over the past week, down 29% from the prior week. However, the 30-day total remains positive at $1.42B, suggesting a cautious pause rather than a reversal so far.
• BTC exchange outflows continued, with $2.49B moving off exchanges this week, extending a 30-day outflow of $8.95B, consistent with accumulation rather than positioning to sell.
• Stablecoin supply grew by ~$393M, the largest single contributor being Falcon Finance's USDF (overcollateralized synthetic dollar). Over the trailing 30 days, Ethena's USDe and Sky's USDS have seen the largest supply growth, pointing to continued demand for yield-bearing stablecoins backed by delta-neutral strategies or RWA/stablecoin collateral baskets. 

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Source: Talos State of the Market Dashboard, Talos CM Network Data Pro

Spot & derivatives activity

• Spot volume across exchanges fell 7.8% WoW to $199.1B while futures volume declined 10.8% to $947.4B, a broad pullback in trading activity through the week's volatility.
• Open interest rose 5.7% WoW to $46.3B (BTC) and 0.6% to $27.4B (ETH) even as longs absorbed heavy liquidations.
• Funding rates compressed, with BTC down 2.83pp WoW to +3.97% annualized as short pressure built. Liquidations climbed sharply, BTC 7D liquidations up 32.6% WoW to $366.5M and ETH up 24.5% to $323.3M, with the bulk concentrated on longs. 
• RWA perp volume on Hyperliquid remained concentrated in index and commodity markets this week. The top 5, XYZ100, S&P 500, WTI crude, Brent crude and SKHX combined for over $5.3B in volume.

Source: Talos CM Market Data 

The latest move toward ~$81K into Thursday saw open interest fall on Binance's BTC-USDT perpetual, suggesting longs added into the dip were unwound.

^{Disclaimer: Talos Global, Inc. and its affiliates ("Talos") is not an investment advisor or broker/dealer. This information does not constitute an offer to buy or sell, or a promotion or recommendation of, any digital asset, security, derivative, commodity, financial instrument or product or trading strategy. This information is not intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. This information is subject to change without notice. It is provided only for general informational, illustrative, and/or marketing purposes and is not intended for retail clients. The information provided was obtained from sources believed to be reliable at the time of preparation, however Talos makes no representation as to its accuracy, suitability, non-infringement of third-party rights, or otherwise. Talos disclaims all liability, expenses, or costs arising from or connected with the information provided. All content is provided for informational and illustrative purposes only. It does not represent firm offers, executable prices, or commitments of any kind, and should not be relied upon as indicative of current or future market prices or the terms on which any transaction may be executed.}

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