Connect with us
Active Currencies 14728
Market Cap $2,613,717,717,366.74
Bitcoin Share 51.39%
24h Market Cap Change $2.01

Crypto market falls to negative sentiment, tremors felt throughout

2min Read

Digital asset investment products recorded a seventh straight week of net outflows, underlining the bearish sentiment prevalent in the market.

Share this article

  • Outflows increased to $62 million from $39 million the week before, representing an increase of 58%.
  • The short Bitcoin fund, which bets on the decline of Bitcoin, recorded $6.3 million in net outflows.

According to the latest report by crypto asset manager CoinShares, digital asset investment products recorded a seventh straight week of net outflows, underlining the bearish sentiment prevalent in the market. Outflows increased to $62 million from $39 million the week before, representing an increase of 58%.


Read Bitcoin’s [BTC] Price Prediction 2023-2024


However, according to the research, the withdrawals were primarily driven by investors closing short positions and taking profits, rather than a fundamental shift in opinion towards cryptocurrencies, particularly Bitcoin [BTC].

Source: Coinshares

Profiting from 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 spate of outflows observed at the start of 2022.

Most outflows last week were from Tron [TRX], totaling $51 million and representing about 70% of the total AuM. On the other hand, the largest and the second-largest asset by market cap, BTC and Ethereum [ETH], logged minor outflows of $2.7 million each.

However, what’s interesting to note is that the short Bitcoin fund, which bets on the decline of Bitcoin, recorded $6.3 million in net outflows, indicating that investors may be short covering.

As per CoinMarketCap, BTC has plunged over 11% over the past month, creating fertile ground for short position traders to exit the market with gains.

Coinshares added that the outflows came amidst a lull in trading activity with volume across the broader crypto market remaining 60% below the year’s average. Additional data from CoinMarketCap lent credence to this observation. Daily volume was stuck in the $20 billion- $30 billion range throughout May as the market entered a period of low volatility.

Source: CoinMarketCap


Is your portfolio green? Check the Bitcoin Profit Calculator


Analyzing futures crypto markets

The nominal value of BTC’s Open Interest (OI) fell marginally over the last week to $11.91 billion, as per Coinglass. As the price of the asset has retreated over 7% in the same time, it goes to prove that money was moving out of the market.

Source: Coinglass

Surprisingly, the downturn didn’t prevent bullish leveraged traders from opening positions betting on price increase. The number of longs increased sharply vis-à-vis shorts at the time of writing.

Share

Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.