In this issue of Coin Metrics State of the Network, we unpack the forces driving recent weakness in digital asset markets. We take a closer look at ETF flows, leverage conditions across perpetual futures and DeFi markets, and orderbook liquidity to explore what these shifts tell us about the current market regime.
Key Takeaways
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Demand from major absorption channels like ETFs and DATs has recently softened, while October’s deleveraging and a risk-off macro backdrop continue to pressure digital asset markets.
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Leverage has reset across futures and DeFi lending markets, leaving positioning cleaner and reducing systemic vulnerabilities.
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Spot liquidity has yet to recover across majors and altcoins, keeping markets fragile and more susceptible to outsized price moves.
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