Bitcoin Bull Market Coming to an End? First $33 Million Net Outflow in 11 Weeks

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Bitcoin Bull Market Coming to an End? First $33 Million Net Outflow in 11 Weeks

Last week, the cryptocurrency market saw an unexpected turn. After experiencing an impressive 11 weeks of consecutive net inflows of funds, several funds faced significant outflows of capital.

Digital Asset Investments Experience Sudden Reversal

Investment products in digital assets, which have been enjoying continuous inflows of funds, faced their first net outflow in 11 weeks.

According to the latest report from CoinShares, asset management companies such as CoinShares, Bitwise, Grayscale, ProShares, and 21Shares showed a net outflow of $16 million.

Funds based on Bitcoin experienced a substantial outflow of around $32.8 million. It is worth noting that investment products shorting Bitcoin also saw fund outflows, but on a smaller scale of only $300,000. Nonetheless, trading activity remained strong, with a total trading volume of $3.6 billion last week, significantly higher than the annual average level of $1.6 billion.

Different Regions Show Divergent Reactions

James Butterfill, Head of Research at CoinShares, explained the regional fund flows.

He believes that the current trend reflects more profit-taking by investors rather than a change in sentiment towards cryptocurrencies. The United States and Germany were the main contributors to fund outflows, with outflows of $18.3 million and $9.7 million, respectively. In contrast, Switzerland and Canada showed a more optimistic attitude, with inflows of $9.1 million and $6.9 million, respectively, highlighting the diversity of investment behaviors in different regions.

Similar Trends in Other Cryptocurrencies, Some Bucking the Trend

Investment products based on Ethereum and Avalanche also experienced fund outflows of $4.3 million and $1 million, respectively. However, not all digital currencies followed this pattern.

Solana, Cardano, and XRP moved against the tide, attracting inflows of $10.6 million, $3 million, and $2.7 million, respectively. In addition, funds based on Chainlink also received an inflow of $2 million. This mixed market response highlights the differences in investor confidence in various digital assets.

The cryptocurrency market is known for its volatility and unpredictability. The latest development of fund outflows, particularly from Bitcoin funds, after a prolonged period of inflows, exemplifies this characteristic. It is currently unclear whether this is just a temporary setback or a sign of a more enduring shift in investor sentiment.