Understanding texture compression is important since all textures are handled differently depending on how they are being used.

Untitled

Default (DXT1 /5, BC1 /3 on DX11)

Compression Format Alpha Support Use
DXT1 NO This compression format should be used for any textures that do not require the use of an alpha channel.
DXT5 YES This compression format should be used for any textures that require the use of an alpha channel.

Normalmap (DXT5, BC5 on DX11)

Compression Format Alpha Support Use
BC5 NO The Normalmap (DXT5, BC5 on DX11) texture compression format is used to compress normal maps.

Masks (no sRGB)

Compression Format Alpha Support Use
DXT1 / DXT5 YES For any textures that are to be used as masks as this will disable sRGB as texture masks should not be gamma corrected.

Grayscale (R8 RGB8 sRGB)

Compression Format Alpha Support Use
G8 NO used for any textures that are going to be used as black and white masks.

Displacement Map (8 / 16bit)

Compression Format Alpha Support Use
G8 YES Used for any textures that are required for surface displacement.

Vector Displacement Map (RGB8)

Compression Format Alpha Support Use
B8G8R8A8 YES Used for any textures that are used to displace surfaces in the X, Y and Z position.

HDR (RGB, no sRGB)

Compression Format Alpha Support Use
FloatRGBA YES Used for any textures that are used for image based lighting or skyboxes.

User Interface 2D (RGBA)

Compression Format Alpha Support Use
B8G8R8A8 YES Used for any textures that are to be used for the user interface.

Alpha (no sRGB, BC4 on DX11)

Compression Format Alpha Support Use
BC4 YES Used for any textures that are to be used as alpha masks.

Distance Field Font (R8)

Compression Format Alpha Support Use
G8 YES Used for any textures that are to be used as fonts that use distance fields.

HDR Compressed (RGB, BC6H, DX11)

Compression Format Alpha Support Use
FloatRGBA YES Used for any HDR textures that need to be compressed.

BC7 (DX11, optional A)

Compression Format Alpha Support Use
B8G8R8A8 YES Used for any textures that need high quality compression.

Source

Texture Compression Settings

Flowmaps for example

For flow maps, it depends on the type of flow map... But either vector displacement or normal map compression is best. In this case probably the normal map (BC5) compression. Simply put, it will compress more data in Red and Green allowing smoother gradients.

in the example of this since Long is just using R and G, normal map compression will be best.