(Kitco News) – U.S.-listed spot Bitcoin (BTC) exchange-traded funds (ETFs) have seen their record streak of inflows grind to a halt as the week ending April 26 marked the third consecutive week that crypto funds recorded outflows.
A total of $435 million was pulled from globally listed crypto funds last week, the largest level of outflows since March, according to the latest digital asset fund flows report from CoinShares.
“Trading volumes in ETPs fell to US$11.8bn last week compared to US$18bn the prior week, while Bitcoin prices fell by 6%,” said James Butterfill, Head of Research at CoinShares.
The U.S. accounted for the bulk of outflows as $388 million was pulled from the region, “although it is worth noting that inflows year-to-date remain at a record US$13.6bn,” Butterfill said. “Looking into the detail, the majority of the outflows were from the incumbent Grayscale, which saw US$440m outflows, which is the lowest for 9 weeks.”
The deceleration of Grayscale outflows has been accompanied by a deceleration of inflows from new issuers, which recorded $126 million in inflows last week, compared to $254 million the week prior.
“Germany and Canada did not escape the negative sentiment with US$16m and US$32m of outflows respectively, although Switzerland and Brazil bucked the trend with US$5m and US$4m inflows respectively,” Butterfill said.
Bitcoin was the primary source of activity, accounting for $423 million in outflows, while Ethereum (ETH) products lost $38 million.
“A broad range of altcoins saw inflows, with investors choosing multi-coin investment products which saw US$7m inflows,” Butterfill said. “Other regular favorites such as Solana, Litecoin and Chainlink continued to see inflows of US$4m, US$3m and US$2.8m respectively.”
Data provided by Alternative shows that sentiment in the crypto market has moderated some amid the repeated dips and now sits in ‘Greed’ territory, but is still well above “Neutral.”
According to cryptocurrency analytics firm Santiment, the ongoing marketwide pullback has pushed many altcoin traders to exit their positions and incur heavy losses, which may present a good buying opportunity for those with a higher risk appetite.
“According to our model, the mid-term gains and losses by average wallets indicate heavy realized losses across most altcoins,” they said. “Over 85% of assets we track are in a historic opportunity zone when calculating the market value to realized value (MVRV) of wallets’ collective returns over one-month, three-month and six-month cycles.”
The MVRV is an on-chain indicator used to assess whether a crypto asset is undervalued or overvalued. “It may be justified to buy while there is growing fear seeping in from the crowd after all of these market cap dips,” Santiment said.
Analysts at Bitfinex also see the current market as a good opportunity to open a long position in Bitcoin, saying, “Several on-chain metrics, including the MVRV measure and the Open Interest (OI) weighted funding rate, are currently indicating a potentially attractive entry point for Bitcoin investors.”
“This does not necessarily indicate that the current $59,675 local low will hold before a new All-Time High for the asset is reached, but current on-chain signals we are seeing have historically coincided with a bottom for BTC,” Bitfinex analysts said. “Further it is important to recognize that the impact of the halving on the market is historically becoming smaller, which suggests investors should be looking to other indicators to forecast BTC price trajectory.”
BTC/USD daily chart. Source: Bitfinex
“As is evident from the figure above, from a price perspective, BTC is currently retesting range lows. Statistically, the more times a support level or range low is tested the weaker it gets,” they added. “For bullish momentum to be re-established, it is critical for BTC to move towards the range highs, which is currently around the $71,000 mark.”
“Successfully breaking out of the lower range and moving towards these highs could signal strength and potentially attract further buying interest, supporting a positive trend reversal,” Bitfinex concluded. “If however, BTC fails to move upward and instead breaks down below the support level, it could lead to a bearish outlook, possibly triggering further declines as market sentiment shifts.”
