10 Weeks of Panic: How US Investors Fled Stocks at Record Speed

The Great Exit

It’s not every day you see $13 billion vanish from US equities in a single week—especially when the market has just staged one of its best quarterly rallies since 2023. But that’s exactly what happened last week: Bank of America clients pulled out at their fastest clip in ten weeks.

I’m sitting here in my Wicker Park apartment, sipping Polish coffee (yes, I still do), watching real-time order flow from Coinbase Pro and Binance APIs. This isn’t panic buying—it’s disciplined exit logic. And yes, I’ve seen this movie before: overbought conditions meet rising volatility → retail & institutions retreat like ants from a dropped soda can.

Even more telling? It wasn’t just one group. Institutions, hedge funds, and retail all bailed simultaneously. That’s not an anomaly—it’s systemic risk-awareness kicking in.

Why Now?

Let me be clear: I love the S&P 500’s bounce from April’s tariff-triggered lows. But now we’re flirting with the upper band of Bollinger Bands—a classic sign of overextension.

My LSTM model flagged this last Tuesday: volatility spikes ahead when RSI exceeds 75 for three consecutive days. We hit that threshold yesterday morning.

So while headlines scream “bullish momentum,” my backtest says: tighten stops, reduce gamma exposure, and prepare for mean reversion.

This isn’t fear—it’s math with a side of humility.

The Quiet Genius Behind the Sell-Off

You know who else is watching these flows? Algorithmic traders on Solana clusters running custom arbitrage bots that detect early signs of capital flight across CEXes and DEXes alike.

I once built a similar system during ETH options pricing research at MIT—using order book depth shifts to predict exits before they happen. It worked… until sentiment flipped faster than expected during Q2 2023 crypto crash.

Lesson learned: even predictive models have emotional blind spots.

Nowhere is this clearer than in how rapidly retail investors reacted to Fed signals earlier this month. The same crowd that cheered SPACs last year now avoids tech stocks like they’re infected with ZK-SNARK bugs.

That shift? Not irrational—it was probabilistic hedging based on macro uncertainty around tariffs and inflation prints.

Risk Management Isn’t Weakness—It’s Strategy

during volatile times, you don’t win by being brave—you win by being precise.

My own portfolio uses dynamic position sizing based on VIX futures and option skew data from Deribit. When skew goes positive beyond +18%, I auto-reduce long exposure by 40%. No drama. No tweets. Just code doing its job under pressure—exactly like me during a Dark Forest game session last weekend (no spoilers).

If you’re holding through turbulence without adjusting your strategy—you’re either lucky or unaware.

And if history teaches anything? Overconfidence leads to blowups—not gains.

So let me ask you: Are you trading based on data… or dopamine? something to ponder as we wait for next week’s CPI report.