According to @BankofAmerica, professional investors sold $4.2 billion in US equities last week, with institutional selling averaging $2.0 billion per week over the past month, while retail investors bought $700 million in the same period. This divergence in trading behavior highlights growing risk-off sentiment among institutions and increased risk appetite among retail traders. For crypto traders, such equity market outflows from institutional players may signal potential for increased liquidity or volatility in the cryptocurrency market, as capital could rotate into assets like BTC or ETH seeking higher returns or diversification (Source: Bank of America).

According to The Kobeissi Letter, a net 38% of institutional investors were underweight US equities in early May 2025, the lowest allocation since May 2023 and, excluding 2023, the weakest since before the 2008 financial crisis, as reported by Bank of America (source: The Kobeissi Letter, May 20, 2025). This significant bearish sentiment among large investors could lead to increased capital flows into alternative assets, including cryptocurrencies, as traders seek higher returns and diversification away from traditional equities. Monitoring this trend is crucial for crypto traders, as shifts in institutional allocations can directly impact digital asset prices and market liquidity.