The latest report from CoinShares reveals that short Bitcoin outflows have come to a halt for the first time in 14 weeks. This indicates a shift in sentiment among institutional investors, who have stopped betting against cryptocurrencies despite the lackluster trading activity during the summer period.
Digital asset investment products saw outflows of $107 million this week, reflecting a trend of profit-taking. Weekly trading volumes in these investment products were 36% below the year-to-date average, highlighting the subdued market conditions.
The wider on-exchange market also experienced a significant decline, with volumes down 62% compared to the year-to-date average. This further emphasizes the overall decrease in trading activity in the crypto market.
Institutional investors, however, remained focused on Bitcoin but witnessed outflows of $111 million, marking the largest weekly outflows since March. Regulatory tensions in the US have likely contributed to this trend.
Interestingly, CoinShares’ report also reveals that Ethereum experienced outflows amounting to $6 million, contributing to a combined outflow of $117 million for both Bitcoin and Ethereum in the past week.
Despite the outflows in the two major cryptocurrencies, there is a notable improvement in sentiment towards altcoins. This has helped counterbalance the overall outflows in the market.
Solana, in particular, saw significant inflows of $9.5 million, representing the highest amount of weekly inflows since March 2022. This indicates growing interest in alternative cryptocurrencies.
Other noteworthy highlights include XRP and Litecoin, which experienced inflows of $0.5 million and $0.46 million, respectively. Ripple’s partial win against the US Securities and Exchange Commission (SEC) has likely contributed to renewed bullish sentiment for XRP. Additionally, the recent halving event has acted as a catalyst for Litecoin’s inflows.
On the other hand, Uniswap and Cardano encountered outflows of $0.8 million and $0.3 million, respectively. This suggests that investors are still cautious about certain altcoins.
Overall, the CoinShares report highlights the changing dynamics in the crypto market. While short Bitcoin outflows have halted, there is a growing interest in altcoins, indicating a shift in investor sentiment. As the market continues to evolve, it will be interesting to see how these trends develop in the coming weeks.
