- Volume in the wider crypto market remained low, almost 50% below the annual average.
- A majority of last week’s outflows came from Bitcoin totaling $46 million.
According to the latter report by CoinShares, digital asset investment products recorded a second straight week of net outflows. This could be in response to the likelihood of further rate hikes by the US Federal Reserve.
Last week’s outflow rose to $72 million from $30 million a week earlier as bearish sentiment lingered in the market. The rate hike was expected at the Federal Reserve’s policy meeting on May 3.
Coinshares added that volume in the wider crypto market remained low, nearly 50% below the annual average. On the other hand, exchange traded products (ETP) volumes reached $1.7 billion last week, 16% above the annual average.
Source: CoinShares
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BTC and ETH are feeling the pinch
The majority of outflows last week came from Bitcoin [BTC]totaling $46 million, while short Bitcoin also experienced the largest outflows since December 2022. These totaled $7.8 million.
Macroeconomic triggers such as the collapse of First Republic Bank, the second largest bank failure in US history, discouraged investors from putting their money into speculative assets.
Similarly, the second largest coin by market cap, Ethereum [ETH], registered outflows totaling $19 million last week, the largest week of outflows since the merger last September. This was surprising as interest in ETH, especially staking services, had resumed Nansen data showing that deposits have outpaced withdrawals over the past week.
On the other hand, altcoins like Solana [SOL] and Cardano [ADA] managed to buck the trend, registering small inflows of $0.2 million and $0.1 million respectively.
Source: CoinShares
return OI
Bitcoin fell nearly 3.92% in the past week, according to CoinMarketCap facts. Negative sentiment permeated futures markets as BTC’s Open Interest (OI) fell 3% over the past week. This put BTC at $11.29 billion as of writing, data from Coinglass showed.
A drop in OI accompanied by a price drop usually indicates that bearish sentiment prevailed in the market.
Source: Coinglass
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The negative sentiment was further reflected in the Longs/Shorts Ratio, which remained below 1 last week. This indicated that a larger proportion of investors are betting on price losses rather than price gains.
Source: Coinglass