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The bitcoin market has seen negative volatility, forcing its price to drop to $32k. This triggered a market-wide sell-off, resulting in enormous outflows. Bitcoin led the way with the largest outflows of $141 million.
This outflow accounted for 8.3 percent of nett inflows this year, making it the greatest single week of outflows for Bitcoin on record. However, in comparison to the outflows saw in 2018, it was still minor. Last week, digital asset investment products experienced withdrawals of $94 million, and weekly volume has also dropped by 62 percent. This was a symptom of the cautious trading that regular investors have adopted in recent weeks.
Given that BTC was still returning 13 percent to investors year to date, the asset was far from overvalued. Outflows may have grown as traders realised profits. Long-term traders, on the other hand, were waiting to purchase the drop, which would result in BTC’s value rising once more.
Surprisingly, Ethereum has seen more inflows than withdrawals during the last week. Its investment offerings saw $33 million in inflows, making ETH the favourite choice among altcoins. This was also due to ETH’s decreasing association with the most valuable digital asset. The second-largest cryptocurrency was up 253 percent year to date, thanks to market-wide increases.
As the spot market remained constrained, consumers’ interest in the enlarged ecosystem, which included decentralised finance, grew. Despite its exorbitant gas prices, this has increased the value of Ethereum.
Other cryptocurrencies, like as XRP and Cardano [ADA], had inflows totalling $7 million, the most since April. Cardano [ADA] was not far behind, with a total of $7.2 million streaming in via its multi-asset offerings.
Although the alts were reflecting investors’ confidence, the overall crypto market fell in the ‘Extreme Fear’ category. While ‘Greed’ ruled last month, this month was mainly looking at consecutive corrections spurring short-term losses in the market.