- Outflows rose from $39 million the previous week to $62 million, up 58%.
- The short Bitcoin fund, which bets on Bitcoin’s decline, recorded a net outflow of $6.3 million.
According to the latter report according to crypto asset manager CoinShares, digital asset investment products recorded a seventh consecutive week of net outflows, highlighting bearish sentiment in the market. Outflows rose from $39 million the previous week to $62 million, up 58%.
Read Bitcoin [BTC] Price forecast 2023-2024
However, according to the research, the withdrawals were mainly driven by investors closing short positions and taking profits, rather than a fundamental shift in opinion towards cryptocurrencies, especially Bitcoin. [BTC].
Source: Coinshares
Taking advantage of declines
The seventh consecutive week of outflows, totaling $329 million, represented 1% of total assets under management (AuM). According to Coinshares, this trend was very similar to the wave of outflows seen in early 2022.
Most outflows last week came from Tron [TRX], totaling $51 million and representing approximately 70% of total assets under management. On the other hand, the largest and second largest assets by market capitalization, BTC and Ethereum [ETH]registered small outflows of $2.7 million each.
However, what is interesting to note is that the short Bitcoin fund, which is betting on Bitcoin’s decline, recorded a net outflow of $6.3 million, indicating that investors may be shorting.
From CoinMarketCapBTC is down more than 11% in the past month, creating fertile ground for short position traders to exit the market with a profit.
Coinshares added that the outflow occurred during a lull in trading activity, with volume in the broader crypto market remaining 60% below its annual average. Additional data from CoinMarketCap confirmed this observation. Daily volume stalled between $20 billion and $30 billion in May as the market entered a period of low volatility.
Source: CoinMarketCap
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Analysis of crypto futures markets
The face value of BTC’s Open Interest (OI) fell marginally last week to $11.91 billion, according to Coinglass. Since the price of the asset has dropped by more than 7% in the same time, this proves that money left the market.
Source: Coinglass
Surprisingly, the recession didn’t stop bullish leveraged traders from opening positions betting on price increases. The number of lungs increased sharp relative to shorts at the time of writing.