Key Takeaways:

  • Digital asset funds saw $876 million in outflows last week, marking the fourth consecutive week of withdrawals and bringing total outflows to $4.75 billion.

  • U.S. investors led the sell-off, withdrawing $922 million, while Switzerland, Canada, and Germany saw inflows, indicating some regional buying interest.

  • Bitcoin saw the largest outflows at $756 million, though short-Bitcoin funds also had $19.8 million in withdrawals, suggesting investors may be nearing capitulation.

  • Ethereum, Tron, and Aave experienced notable outflows, while Solana, XRP, and Sui attracted inflows.

  • Blockchain-related equity exchange-traded products (ETPs) lost $48 million, reflecting broader negative sentiment.

Sustained Outflows Reduce Assets Under Management

According to CoinShares: Digital asset investment products continued their negative streak, with four consecutive weeks of outflows totaling $4.75 billion. This has reduced year-to-date inflows to $2.6 billion, with total assets under management (AUM) dropping to $142 billion, a $39 billion decline from their peak and the lowest level since mid-November 2024.

Bitcoin Remains Under Selling Pressure

Bitcoin was the primary focus, seeing $756 million in outflows last week, reflecting continued investor caution. However, short-Bitcoin funds also saw $19.8 million in outflows, the largest since December 2024, which may indicate that bearish positioning is unwinding.

Altcoin Fund Flows Show Mixed Sentiment

Ethereum, Tron, and Aave recorded significant outflows:

  • Ethereum: $89 million outflows

  • Tron: $32 million outflows

  • Aave: $2.4 million outflows

Despite the overall market downturn, some altcoins saw net inflows, suggesting selective accumulation:

  • Solana: $16.4 million inflows

  • XRP: $5.6 million inflows

  • Sui: $2.7 million inflows

  • U.S. investors were the most bearish, withdrawing $922 million, continuing a risk-off approach.

  • Switzerland, Canada, and Germany saw inflows of $23 million, $14.7 million, and $13.3 million, respectively, suggesting that some investors are taking advantage of lower prices.

Blockchain-Related Equities Face Selling Pressure

Blockchain-related equity ETPs also saw outflows, losing $48 million last week. This indicates that negative sentiment is extending beyond cryptocurrency funds into blockchain-focused stocks.

Market Implications and Outlook

Potential Capitulation Signs

  • The outflows from short-Bitcoin funds suggest that bearish sentiment may be fading, and some investors may be positioning for a market rebound.

Diverging Regional Sentiment

  • U.S. investors are withdrawing, while European investors are accumulating, indicating different market outlooks across regions.

Altcoin Accumulation

  • Continued inflows into Solana, XRP, and Sui suggest that investors see long-term value in certain projects despite overall market weakness.

Short-Term Caution, Long-Term Opportunities

  • The fourth consecutive week of outflows signals ongoing risk-off sentiment, but the slowing pace of withdrawals could indicate that selling pressure is beginning to ease.

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