- Profit-taking has increased sharply in recent weeks.
- This led to a 400% increase in the weekly outflow of digital asset investment products last week.
More profit-taking led to another week of outflows from digital asset investment products, investment firm CoinShares found in its new report.
Last week’s outflow was $107 million, according to the report. This represented the fourth week of sequential outflows from investment funds and a 400% increase from the previous week’s $2.1 million recorded outflows.
Source: CoinShares
CoinShares further noted that “summer doldrums” have begun. This is a term used to describe the period during the summer months when trading activity in the financial markets tends to slow down. This may be because many people are on vacation and there is less news and economic data to make trading decisions.
Regarding the crypto market, CoinShares discovered,
“The summer doldrums are in full effect with weekly trading volumes in investment products 36% below the yearly average, but volumes in the broader exchange market have suffered more, down 62% from the YTD average.”
There were a number of possible reasons for the drop in weekly trading volumes as summer draws to a close, the most prominent being the neutral sentiment that has permeated the crypto market. This has caused leading coins Bitcoin [BTC] and Ethereum [ETH]to hang in tight price ranges since April.
However, it was essential to note that summer freezes are a normal part of the cryptocurrency market cycle. It is often followed by renewed interest and market growth.
Bitcoin is seeing its biggest weekly outflow since March
Still facing significant resistance at the $30,000 psychological price level, BTC outflows totaled $111 million last week. This was a 472% increase in weekly king coin outflows compared to the $19.4 million recorded in the previous week.
Source: CoinShares
According to CoinShares, last week’s outflow represented,
“the largest weekly outflow since March, as US regulatory oversight began to escalate.”
Interestingly, after 14 weeks of consecutive liquidity exits, “the outflows to short bitcoin have stopped,” the report said. While no inflows were recorded, the lack of outflows suggested that investors had not bet against BTC’s price last week. This could be a bullish signal, indicating less selling pressure in the market.
Ethereum is reversing the trend again
After weekly inflows of $6.6 million in the previous week, ETH recorded an outflow of $6 million last week.
As for other altcoins:
“Other notable mentions included XRP and Litecoin, with inflows of US$0.5 million and US$0.46 million, respectively. Uniswap and Cardano saw outflows of $0.8 million and $0.3 million respectively.”