Bitcoin and Ethereum Lead Three Weeks of Crypto Investment Outflows, What’s Next?

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As an experienced analyst, I find the latest Coinshares report alarming, especially with regard to Bitcoin ETF inflows drying up considerably. The outflows from US spot Bitcoin ETFs have been a major contributor to this trend, and the declining inflows from new issuers add to the concern. The total outflows from Grayscale alone have surpassed $17 billion since its conversion to a Bitcoin ETF. This could be an indication of investors taking profits or becoming risk-averse due to market volatility and uncertainty.

According to the most recent Coinshares report, there was a third successive week of cryptocurrency investment product withdrawals amounting to $435 million. This is one of the largest weekly outflows since March the previous month. The primary cause of these substantial withdrawals was significant outflows from US Bitcoin spot ETFs.

Bitcoin ETF Inflows Drying Up Considerably

Last week, the Bitcoin price experienced a notable decrease, dropping approximately 6%. Simultaneously, the trading volume for crypto Exchange-Traded Products (ETPs) diminished to $11.8 billion from the previous week’s $18 billion.

The majority of the US$471 million in outflows went toward Bitcoin and Ethereum, specifically US$423 million for Bitcoin and US$38 million for Ethereum. A large portion of these outflows can be attributed to Grayscale, totaling US$440 million – the smallest amount in the past nine weeks.

The amount of money flowing out of Grayscale has been gradually decreasing, while the inflows from new investors have also slowed down significantly. Last week, these inflows reached only $126 million, compared to $254 million in the previous week. Since its conversion into a Bitcoin ETF, Grayscale’s total outflows have surpassed $17 billion.

Regarding regional trends, the United States saw the biggest net withdrawals, amounting to $388 million. On the other hand, Germany and Canada dealt with negative sentiment as well, resulting in outflows of $16 million and $32 million respectively. Contrarily, Switzerland and Brazil bucked this trend, recording inflows worth $5 million and $4 million respectively.

From my perspective as an analyst, while Bitcoin attracted outflows totaling US$16 million, other altcoins saw significant inflows. Specifically, investors showed interest in multi-coin investment products, leading to a total of US$7 million in inflows. Furthermore, well-established coins like Solana, Litecoin, and Chainlink continued to gain traction, with individual inflows amounting to US$4 million, US$3 million, and US$2.8 million respectively, according to CoinShares’ data.

BTC Price Rejected At Crucial Resistance

Based on Rekt Capital’s analysis, the recent closing price of Bitcoin has made $65,600 a new hurdle for further advancement. The digital currency is currently oscillating between the prices of $59,000 and $65,000.

#BTC
The new Weekly Close has confirmed the $65600 level as new resistance
I, as an analyst, can confirm that Bitcoin has established itself within a significant range. Currently, it hovers around the $65,600 resistance level. Beneath this level lies a substantial pool of liquidity, acting as a potential support zone. #Bitcoin #BitcoinHalving
— Rekt Capital (@rektcapital) April 29, 2024

As a crypto analyst, I’ve been closely monitoring Bitcoin’s price action. Currently, it seems that Bitcoin is trading within a range, suggesting a possible downturn in the near term. The upcoming Federal Open Market Committee (FOMC) meeting on Wednesday could be a significant factor influencing market sentiment. If the FOMC announces hawkish policies or indications of faster-than-expected rate hikes, we could see a correction before the event. However, if the FOMC signals dovish policies or potential rate cuts, there’s a good chance that Bitcoin will rebound afterward, fueled by investors’ hopes for increased liquidity and lower borrowing costs.

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2024-04-29 14:15