Editor's note: A notable feature of the recent crypto market has been 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.

While most altcoins were underperforming, privacy coins Monero (XMR) and Zcash (ZEC) rose 6.6% and 6.2%, respectively, making them the two best-performing large-cap crypto assets this week. Meanwhile, social discussion of Monero increased by nearly 50% from the previous week, reflecting a marked rise in market interest in privacy-related narratives.

But shifts in sentiment have not led to a uniform outflow of funds. Santiment data shows that large wallets holding 10 to 10,000 BTC accumulated about 110,000 BTC over the past four to five weeks, the fastest sustained accumulation pace of the year so far. Ethereum, meanwhile, saw a single-day net outflow of about 170,000 ETH from exchanges on October 22, its highest level in at least three months.

Meanwhile, Bitcoin’s social sentiment briefly turned pessimistic as the security incident unfolded, but the ratio of positive to negative discussion quickly recovered, and on-chain valuation metrics such as MVRV showed no clear signs of an extreme.

Santiment’s analysis shows that market fear, social buzz, and on-chain fund activity do not always move in sync. A price decline does not mean all investors are exiting, and increased discussion does not necessarily correspond to sustained inflows.

This divergence is particularly worth watching for altcoin investors: when market sentiment is easily driven by news, the relationships between price, social discussion volume, and on-chain activity may be more informative than simply watching price gains and losses.

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Privacy coins lead gains against the trend as sentiment in the altcoin market diverges sharply

Santiment noted that sentiment in the crypto market was shaken by a security incident this week, but the performance of different assets diverged significantly.

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

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

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

By contrast, privacy coins were among the few sectors to rise.

Monero (XMR) rose 6.6% this week and Zcash (ZEC) gained 6.2%, making them the two best-performing large crypto assets. Meanwhile, social discussion volume for Monero grew nearly 50% from the previous week.

Santiment believes this performance reflects increased interest in privacy-focused assets as security risks intensify. As investors’ concerns shift from price volatility to data and information security, the appeal of the privacy coin narrative grows.

But increased social buzz does not necessarily mean sustained buying demand. Santiment observed this divergence in another set of altcoin data.

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

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

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

Santiment sees this change as a divergence worth watching: price action may lag behind changes in on-chain participation. When active addresses decline first, the participation base behind a short-term rally may already be starting to weaken.

For the highly sentiment-driven altcoin market, this case shows that rising social discussion, price gains, and on-chain user participation are not the same thing. When the price is still rising but active addresses and actual participation are already declining, apparent market strength may mask weakening underlying momentum.

However, changes in the active addresses of a single token cannot be taken directly as a signal that its price has peaked. They should be assessed alongside trading volume, fund flows, and the token’s own use cases.

Whales continue accumulating BTC as ETH fund flows send a different signal

In contrast to sentiment swings in the altcoin market, large Bitcoin holders continue to accumulate. According to Santiment data, wallets holding 10 to 10,000 BTC now collectively hold approximately 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 of 2026 so far. Santiment noted that only the accumulation period from February to April came close to this level this year.

Notably, smaller wallets have also shown no clear signs of exiting. The number of wallets holding less than 0.01 BTC continues to grow, meaning that large and small holders are accumulating in tandem, rather than retail investors simply selling while whales buy. This contrasts with short-term market fears. While a security incident has fueled negative discussion and put pressure on Bitcoin’s price, some large wallets are still increasing their holdings.

However, growth in wallet balances is not exactly the same as net buying by independent investors. A single entity may control multiple addresses, and internal transfers by exchanges and custodians can also affect the data.

Santiment’s data is therefore better suited to tracking changes in coin distribution and holdings structure than to directly predicting an imminent Bitcoin price rebound.

Ethereum, meanwhile, has shown another noteworthy signal in exchange fund flows. On October 22, around 170,000 ETH flowed out of centralized exchanges on a net basis, marking the largest single-day net outflow in at least three months. This coincided with the period when market fear was most pronounced.

For the week as a whole, cumulative net outflows from exchanges were about 75,600 ETH, indicating that inflows on some trading days offset the large outflow that day. Santiment believes a single-day transfer of this size likely involved large wallets, rather than just ordinary retail activity.

By contrast, Bitcoin saw net inflows to exchanges on six of the seven days of the week, with cumulative net inflows of about 10,600 BTC. The two assets therefore showed different fund flows: ETH flowed off exchanges, while BTC continued to flow onto them.

In general, assets moving off exchanges may indicate transfers to self-custody or other holding channels, while assets moving onto exchanges may increase the supply available for trading. But these data do not directly correspond to buying or selling. Institutional custody migrations, wallet management, and other asset transfers can also cause large movements.

Santiment also cautioned that these changes remain small relative to the total supply of either asset. Changes in exchange balances over a single week have limited predictive value for future prices on their own.

Market fear has not yet turned into a full-scale exit

Despite the market volatility triggered by negative news this week, social sentiment data shows that investor pessimism did not continue to deepen. Santiment data shows that the average ratio of positive to negative social posts about Bitcoin this week was 1.09, up from 0.97 the previous week.

The indicator reached 1.32 on October 20, then fell to 0.96 on October 22 as the security incident unfolded. When the indicator drops below 1, it means negative discussion has briefly exceeded positive discussion. However, this wave of pessimism did not last long. About 24 hours later, the ratio of positive to negative discussion had recovered to 1.08.

Meanwhile, overall social discussion about Bitcoin was roughly flat compared with the previous week. This suggests that although market sentiment briefly worsened, it was not accompanied by a significant increase in discussion volume, and fear did not continue to spread across social platforms.

On-chain valuation metrics also showed a relatively neutral picture. According to Santiment data, Bitcoin’s 30-day MVRV was -2.5%, while its 365-day MVRV was +0.6%. MVRV primarily measures changes in an asset’s current market value relative to its on-chain cost basis, and can be used to assess the average profit or loss of holders over different holding periods.

At present, short-term holders are collectively at a slight unrealized loss, while the profit or loss of longer-term holders is close to breakeven. This means the market has not entered a clearly extreme profit or loss zone. Santiment believes that the brief drop in the ratio of positive to negative discussion to 0.96, followed by a recovery within about 24 hours, is more consistent with a short-term sentiment shock than a typical market capitulation event.

Taken together, this week’s data point to three different developments in the market.

On the one hand, negative news has affected risk appetite, putting pressure on most altcoins, while privacy coins such as XMR and ZEC have attracted greater market attention thanks to their associated narratives. On the other hand, large Bitcoin wallets continue to accumulate, and Ethereum has seen sizable net outflows from exchanges, showing that on-chain holding behavior has not fully tracked short-term pessimism.

At the same time, the rapid recovery in social sentiment and neutral MVRV readings suggest that although the market has been shaken, it has not yet shown signs of a full-scale exit.

Looking ahead, what matters is not only whether market sentiment improves, but also whether that improvement is sustained by real demand for funds and on-chain activity.

The key point from Santiment’s data this week is that market fear does not necessarily mean a wholesale exit of funds, just as social buzz and rising prices do not necessarily mean that real participation is increasing in step.

This divergence between price, public discussion, and on-chain behavior may be an important clue to short-term changes in market structure, especially in the altcoin market.