In a notable shift, U.S.-listed spot Bitcoin exchange-traded funds (ETFs) have encountered a cessation in their record streak of inflows, with the crypto market witnessing significant outflows totaling $435 million last week. Analysts, however, perceive this downturn as a potential buying opportunity amidst market volatility.
Deceleration in Inflows
According to CoinShares’ latest digital asset fund flows report, trading volumes in Exchange-Traded Products (ETPs) plummeted to $11.8 billion, marking a decline from the previous week’s $18 billion. James Butterfill, CoinShares’ Head of Research, highlighted a 6% drop in Bitcoin prices, attributing the bulk of outflows to the U.S. market, primarily from incumbent Grayscale.
Global Trends
While the U.S. led in outflows, Germany and Canada also experienced negative sentiment, albeit to a lesser extent. Conversely, Switzerland and Brazil saw inflows, indicating varied market reactions globally.
Bitcoin dominated outflows, with Ethereum products also experiencing losses. Nonetheless, a range of altcoins saw inflows, with investors favoring multi-coin investment products alongside specific altcoins like Solana, Litecoin, and Chainlink.
Market Sentiment
Despite the downturn, sentiment in the crypto market remains in ‘Greed’ territory, albeit moderating from previous highs. Sentiments analysis suggests a historic opportunity zone for altcoins, enticing potential buyers amidst market dips.
Analysts Outlook
BTC/USD daily chart. Source: Bitfinex
Bitfinex analysts advocate for a long position in Bitcoin, citing favorable on-chain metrics such as the Market Value to Realized Value (MVRV) and Open Interest (OI) weighted funding rate. They suggest that while the $59,675 local low may not hold, current on-chain signals historically coincide with potential market bottoms.
Bitfinex emphasizes the importance of Bitcoin’s movement towards range highs, currently around $71,000, to signal strength and attract buying interest. Failure to do so could lead to a bearish outlook, potentially triggering further declines.
