Bitcoin and altcoins are under selling pressure amid massive outflows from crypto investment products. According to CoinShares, last week saw $726 million in outflows, the largest since March this year.
Bitcoin and Solana: Contrasting Flows
CoinShares' data shows that Bitcoin recorded a $643 million outflow, making it the most affected cryptocurrency, while short-Bitcoin products saw an inflow of $3.9 million. Ethereum (ETH) followed Bitcoin with a $98 million outflow, largely due to Grayscale Trust and negligible inflows into newly launched spot Ethereum ETFs. On the other hand, Solana (SOL) attracted the highest inflow among crypto investment products with a total of $6.2 million, indicating selective optimism among investors despite the overall market downtrend.
US: Epicenter of Outflows
The US was the epicenter of outflows, with a staggering $721 million, followed by Canada with $28 million. In contrast, Europe showed a more positive outlook, particularly with inflows of $16.3 million and $3.2 million recorded in Germany and Switzerland, respectively.
Macroeconomic Factors and Markets
The US Federal Reserve’s stronger-than-expected macroeconomic data, increasing the likelihood of a 25 basis point rate cut, is cited as the main reason for the current negative sentiment in the crypto market and crypto investment products. Last week’s weaker-than-expected employment market data accelerated the outflows, while inflows into crypto investment products are expected to resume if this week’s inflation figures fall below expectations, making a 50 basis point cut more likely.
The situation in the cryptocurrency market remains volatile, with investment products showing both significant outflows and selective inflows into certain assets. Macroeconomic conditions continue to have a substantial impact on investor sentiment.
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