Bitcoin Outflows, Altcoin Inflows: Is a Crypto Market Shift Underway?

(Kitco News) – Digital asset investment products recorded their fourth consecutive week of outflows during the week ending May 3, with collective assets under management (AUM) falling by $251 million to $84.86 billion. dollars.

It was also “the first week that there were measurable outflows from newly issued ETFs in the U.S., which last week saw outflows of $156 million,” said James Butterfill, head of research at CoinShares. “We estimate the average purchase price of these ETFs since launch to be $62,200 per Bitcoin (Bitcoin), since the price fell 10% below that level, it may have triggered automatic sell orders.”

Outflows from BTC spot ETFs indicate that the US accounted for the majority of the AUM decline with $504 million in outflows, while Switzerland, Canada and Germany saw withdrawals of $9.8 million respectively, 9, 6 million dollars and 7.3 million dollars.

“The silver lining last week was the successful launch of Bitcoin and Ethereum spot ETFs in Hong Kong, which saw inflows of $307 million in their first week of trading,” Butterfill said.

In an unusual turn of events, Bitcoin was the only token to record outflows, with $284 million withdrawn from funds, while Ethereum (ET) broke its seven-week outflow streak to record record inflows of $30 million.

“A wide range of altcoins recorded inflows, with the most significant being Avalanche, Cardano and Polkadot, which recorded $0.5 million, $0.4 million and $0.3 million respectively,” he said. stated Butterfill.

Trade flows decrease

Another set of flow data cryptocurrency investors are watching involves Bitcoin inflows into cryptocurrency exchanges, which recently hit their lowest point in nearly a decade, suggesting a bullish recovery is on the horizon.

As shown in the chart provided by CryptoQuant analyst Axel Adler, Bitcoin inflows into exchanges amounted to 20,000 Bitcoins, the lowest the market has seen since 2015.

At the same time, Adler noted that long-term hodlers also stopped distributing their tokens and started reaccumulating them, which has been historically bullish.

Data provided by Alternatives shows that overall sentiment in the cryptocurrency market remains in “greed” territory, which some analysts say means further weakness is needed to ensure excess froth is cleared from the market.

But second for Kripto analyst Mevsimi, the situation could soon change as “We are approaching the ‘grey line’ [in the chart below]which serves as an optimism/pessimism threshold for the cryptocurrency market.”

“The blue line, which represents the percentage of Bitcoin supply currently in profit, is particularly high,” Mevsimi said. “This generally indicates that a significant portion of the market may be considering taking gains, potentially leading to increased selling pressure. Historically, such high levels have often preceded market volatility and potential recessions as holders begin to liquidate their positions.”

As the metric approaches the gray line, “market participants should be vigilant; Moving below this line could lead to a deeper correction in prices,” she warned. “However, if we remain above this line, market sentiment is likely to remain positive and any correction could be short-lived.”

“Profitability is a crucial factor in market psychology, especially when macroeconomic conditions, such as the current expansionary and unfavorable monetary policies for the economy, do not favor risky assets,” concluded Mevsimi. “Participants should monitor these dynamics carefully as they can significantly influence market movements.”

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It does not constitute a solicitation to trade in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article assume no responsibility for loss and/or damage arising from the use of this publication.

Source