Editor's Note: A notable feature of the crypto market recently is the divergence between price movements, social sentiment, and on-chain investor behavior.

On October 24, on-chain data analytics platform Santiment released its latest weekly market report, focusing on the market panic triggered by recent security incidents and how different types of investors responded.

Against the backdrop of weak performance across most altcoins, privacy coins Monero (XMR) and Zcash (ZEC) rose 6.6% and 6.2% respectively, becoming the two best-performing large-cap crypto assets this week. Meanwhile, Monero's social discussion volume grew nearly 50% compared with the previous week, reflecting a clear rise in market attention to privacy-related narratives.

However, the shift in sentiment did not lead to consistent capital outflows. Santiment data shows that large wallets holding 10 to 10,000 BTC accumulated approximately 110,000 BTC over the past four to five weeks, marking the fastest sustained accumulation pace this year. Ethereum saw a single-day net exchange outflow of about 170,000 ETH on October 22, the highest level in at least three months.

On the other hand, although Bitcoin social sentiment briefly turned pessimistic during the security incident, the ratio of positive to negative discussion quickly recovered, and on-chain valuation metrics such as MVRV did not show obvious extreme signals.

Santiment's analysis indicates that market panic, social buzz, and on-chain capital behavior do not always change in sync. Falling prices do not mean all investors are exiting, and rising discussion volume does not necessarily correspond to sustained capital inflows.

This divergence is particularly worth the attention of altcoin investors: at a stage when market sentiment is easily driven by news, the relationship between price, social discussion volume, and on-chain activity may be more informative than simply observing price changes.

The original text follows:

Privacy coins lead gains against the trend, altcoin market sentiment clearly diverges

Santiment noted that crypto market sentiment was hit by security incidents this week, but the performance of different assets showed clear divergence.

On October 21, PHP released an emergency security patch to fix two vulnerabilities, both with severity scores of 9.2. The vulnerabilities could allow attackers to execute code remotely, and some technical details had already leaked before the patch was released.

Although this incident did not directly affect the Bitcoin protocol, it raised market concerns about the security of crypto-related websites and infrastructure.

As the news spread, most crypto assets showed weakness. Bitcoin fell 0.3% this week, Ethereum dropped 1.1%; Quant (QNT) declined 10.3%, and Uniswap (UNI) fell 3.8%.

In contrast, privacy coins became one of the few sectors to post gains.

Monero (XMR) rose 6.6% this week, and Zcash (ZEC) gained 6.2%, making them the two best-performing large-cap crypto assets. Meanwhile, Monero's social discussion volume increased by nearly 50% compared to the previous week.

Santiment believes this performance reflects increased market attention to privacy-related assets as security risks escalate. When investors' concerns shift from price volatility to data and information security, the narrative appeal of privacy coins strengthens accordingly.

However, rising social热度 does not necessarily mean sustained buying demand. Santiment observed this divergence in another set of altcoin data.

From October 8 to 15, Basic Attention Token (BAT) price rose from $0.1026 to $0.2157, a gain of over 100% in one week, but there was no obvious major news catalyst behind the rally.

On-chain data shows that in the early stage of the rapid price increase, the number of BAT active addresses grew even faster than the price, reflecting a rapid rise in market participation. However, on October 13, the number of BAT active addresses had already peaked, two days ahead of the price high. By October 20, active addresses had dropped 46% from the peak, while the price had only pulled back about 10% over the same period.

This means that although the price remained at a relatively high level, on-chain participation heat had already declined significantly.

Santiment views this change as a noteworthy divergence: price action may lag behind changes in on-chain participation, and when active addresses decline first, the participation base for a short-term rally may already be weakening.

For the sentiment-driven altcoin market, this case illustrates that rising social discussion, price increases, and on-chain user participation are not the same concept. When prices are still rising but active addresses and actual participation have already begun to decline, the market's surface strength may be masking a weakening of internal momentum.

However, changes in a single token's active addresses cannot be directly used as a signal of a price top; they still need to be judged in combination with trading volume, capital flows, and the token's own use cases.

Whales Keep Accumulating BTC, ETH Fund Flows Send a Different Signal

In contrast to the sentiment swings in the altcoin market, large Bitcoin holders continue to accumulate coins. According to Santiment data, wallets holding 10 to 10,000 BTC currently hold a combined total of about 13.71 million bitcoins.

Compared with four to five weeks ago, this group's total holdings have increased by about 110,000 BTC, marking the fastest sustained accumulation pace since 2026. Santiment noted that only the accumulation phase from February to April this year came close to this level.

Notably, small wallets have also shown no clear signs of retreat. The number of wallets holding less than 0.01 BTC is still growing, meaning large holders and small holders are accumulating in tandem, rather than simply retail selling while whales absorb the supply. This contrasts with short-term market panic. Even as security incidents sparked negative discussion and Bitcoin's price came under pressure, some large wallets continued to expand their holdings.

However, growth in wallet holdings does not fully equate to net buying by independent investors. A single entity may control multiple addresses, and internal transfers by exchanges and custodians may also affect the relevant data.

Therefore, Santiment's data is better suited for observing changes in coin distribution and holding structure, rather than directly judging that Bitcoin's price is about to rebound.

Ethereum, meanwhile, showed another noteworthy signal in exchange fund flows. On October 22, about 170,000 ETH flowed out of centralized exchanges on a net basis, setting the largest single-day net outflow in at least three months. This timing coincided exactly with the phase when market panic sentiment was most pronounced.

For the full week, cumulative net outflows from exchanges totaled about 75,600 ETH, indicating that inflows on some trading days offset the large outflow that day. Santiment believes that a single-day fund movement of this scale likely involved large wallets, not just ordinary retail activity.

In contrast, Bitcoin saw net inflows to exchanges on six of the seven days in the week, with cumulative net inflows of about 10,600 BTC. The two assets thus showed different fund flow directions: ETH flowed out of exchanges, while BTC continued to flow into exchanges.

Generally speaking, assets flowing out of exchanges may mean transfer into self-custody or other holding channels, while inflows to exchanges may increase the supply of assets available for trading. But these data cannot be directly mapped to buying or selling behavior. Institutional custody migrations, wallet management, and other asset transfers may also cause large-scale flows.

Santiment also cautioned that these changes remain relatively small compared to the total supply of both assets. A single week's exchange balance change on its own has limited predictive value for future prices.

Market panic has not yet evolved into a full-scale exodus

Although negative news this week triggered market volatility, social sentiment data shows that investor pessimism has not continued to expand. Santiment data shows that the average ratio of positive to negative social posts about Bitcoin this week was 1.09, higher than 0.97 the previous week.

This indicator reached 1.32 on October 20, then fell to 0.96 on October 22 as security incidents intensified. When the indicator falls below 1, it means negative discussions briefly outnumbered positive ones. However, this round of pessimism did not last long. About 24 hours later, the ratio of positive to negative discussions recovered to 1.08.

Meanwhile, overall social discussion volume for Bitcoin was basically flat compared with the previous week. This indicates that although market sentiment briefly deteriorated, it was not accompanied by a significant expansion in discussion volume, and panic did not continue to spread on social platforms.

On-chain valuation metrics also show a relatively neutral state. According to Santiment data, Bitcoin's 30-day MVRV is -2.5%, and its 365-day MVRV is +0.6%. MVRV mainly measures changes in an asset's current market value relative to on-chain holding costs, and can be used to observe the average profit and loss status of investors across different holding periods.

Currently, short-term holders are overall in a slight unrealized loss position, while longer-term holders are basically near break-even. This means the market has not yet entered a clearly extreme profit or loss range. Santiment believes that the ratio of positive to negative discussions briefly falling to 0.96 and recovering within about 24 hours is closer to a short-term sentiment shock rather than a typical market capitulation event.

Looking at this week's data together, the market is showing three different changes.

On one hand, negative news has affected market risk appetite, with most altcoins under pressure, but privacy coins such as XMR and ZEC gained more market attention due to related narratives; on the other hand, large Bitcoin wallets continued to accumulate, and Ethereum also saw relatively large net exchange outflows, indicating that on-chain holding behavior has not fully synchronized with short-term pessimistic sentiment.

At the same time, the rapid recovery of social sentiment and neutral MVRV indicators show that although the market has been hit, it has not yet formed the characteristics of a full-scale exodus.

For subsequent market action, what is worth watching is not only whether market sentiment can improve, but more importantly, whether the improvement in sentiment can be continuously supported by real capital demand and on-chain activity.

The core issue revealed by Santiment's data this week is: market panic does not necessarily mean a full-scale capital flight, and social hype and price increases do not necessarily mean that real participation is strengthening in sync.

Especially in the altcoin market, the divergence between price, public opinion, and on-chain behavior may become an important clue for observing short-term changes in market structure.

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