Bitcoin outflows, altcoin inflows: Is a shift in the crypto market underway?

(Kitco News) – Digital asset investment products recorded their fourth consecutive week of outflows in the week ending May 3, as collective assets under management (AUM) declined by $251 million to 84 .86 billion dollars.

It was also “the first week to see measurable outflows from newly issued ETFs in the United States, which saw outflows of $156 million last week,” said James Butterfill, head of research. at CoinShares. “We estimate the average purchase price of these ETFs since their launch at US$62,200 per Bitcoin (BTC), as the price fell 10% below this level, this may have triggered automatic sell orders.

Outflows from spot BTC ETFs mean the US is responsible for the majority of the drop in assets under management with $504 million in outflows, while Switzerland, Canada and Germany saw withdrawals of $9 .8 million, $9.6 million, and $7.3 million, respectively.

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

In an unusual turn of events, Bitcoin was the only token to experience outflows, with $284 million withdrawn from funds, while Ethereum (ETH) ended its seven-week outflow streak to record inflows of $30 million.

“A wide range of altcoins saw inflows, with the largest being Avalanche, Cardano, and Polkadot at $0.5 million, $0.4 million, and $0.3 million, respectively,” Butterfill said.

Trade flows are decreasing

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

As shown in the chart provided by CryptoQuant analyst Axel Adler, Bitcoin inflows into exchanges stand at 20,000 Bitcoins, the lowest value 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 always been bullish.

Data provided by Alternative shows that general sentiment in the crypto market remains in “greed” territory, which some analysts say means additional weakness is needed to ensure excess froth is cleared from the market.

But according to for analyst Kripto Mevsimi, this could soon change: “We are approaching the “gray line” [in the chart below]which serves as an optimism/pessimism threshold for the crypto market.

“The blue line, representing the proportion of Bitcoin supply currently in profit, is particularly high,” Mevsimi said. “This generally indicates that a significant portion of the market may be looking to make gains, which could lead to increased selling pressure. Historically, such high levels often preceded market volatility and potential pullbacks as holders began to liquidate their positions.

As the measure moves closer to the gray line, “market participants must be vigilant; a move below this line could lead to a deeper price correction,” he warned. “However, if we remain above this line, market sentiment will likely remain positive and any correction may be short-lived.”

“Profitability is a crucial factor in market psychology, especially when macroeconomic conditions, such as current economic expansionary monetary policies, do not favor risky assets,” Mevsimi concluded. “Participants should carefully monitor these dynamics 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 for informational purposes only. This is not a solicitation to trade any commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.

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