- The negative sentiment in the market caused the increase in outflows from BTC and ETH.
- The expected distribution by a defunct exchange puts the cryptos at risk of another decline
Crypto investment products saw huge inflows for the second week in a row, according to the latest report from CoinShares. Outflows last week amounted to $584 million, according to Digital Asset Management.
This brought the total outflow in two weeks to $1.2 billion. As expected, Bitcoin [BTC] had the highest outflow at $630 million. The report explained that the gloomy perception among investors and the expected rate cut contributed to the capital flow.
It explained That,
“We believe this is a response to investor pessimism about expected Fed rate cuts this year.”
BTC and ETH play second fiddle to other altcoins
Excluding the outflows, trading volume of Exchange Traded Products (ETPs) fell to $6.9 billion. This was the lowest volume Bitcoin has had since the ETF’s approval on January 10.
Source: CoinShares
Ethereum [ETH] was second on the list with an outflow of $58.30 million. This was surprising given that the broader market expects Ethereum spot ETFs to begin trading in July.
Mostly this was supposed to induce optimism. However, that did not happen as the report stated that:
“Ethereum did not escape the negative sentiment and saw an outflow of $58 million. While a range of altcoins saw inflows following the recent price weakness, Solana, Litecoin and Polygon were the most notable with US$2.7 million, US$1.3 million and US$1 million respectively.”
At the time of writing, Bitcoin’s price was $60,028 after briefly falling below $59,000. ETH, on the other hand, changed hands at $3,349.
‘Tis the season to be careful
The initial price drop could be related to the revelation that Mt.Gox. intended to repay creditors for $9 billion worth of BTC starting in July.
Mt.Gox is the defunct Bitcoin exchange that was hacked in 2011. It then went bankrupt in 2014, leading to a wider market collapse. When distribution begins in July, there is a good chance that recipients will sell some of the coins.
Should this be the case, BTC could fall to $54,000 as predicted in some corners. For ETH, the expected live trading of the ETFs could save it from another round of correction.
If this happens, ETH’s price could resist another downside, and this could be the ticket to the altcoin season that hasn’t appeared.
Meanwhile, Bitcoin volume was approaching its monthly high. At the time of writing, volume was $42.86 billion. Volume measures buying and selling, which indicates interest in a cryptocurrency.
But given the decline in BTC, it means there was a decline selling more than buying. Although ETH’s volume also increased, it was not the same as Bitcoin.
Source: Santiment
Realistic or not, here is the market cap of ETH in BTC terms
At the time of writing, the volume of ETH on-chain was $22.76 billion. As it stands now, BTC seemed to be resisting further decline. If the bulls can defend the coin, the price could return to $63,000.
In the case of ETH, its value could reach $3,500. However, if selling pressure increases, prices could reach new quarterly lows.