In the previous week, there was a positive shift in digital asset inflows into crypto investment products, with a total of $862 million in net inflows. This is a significant improvement compared to the previous week, which saw net outflows of $931 million.
However, the popularity of spot Bitcoin exchange-traded funds (ETFs) appears to be waning. The daily trading volume of ETFs for Bitcoin has dropped to $5.4 billion, which is 36% lower than its peak of $9.5 billion in the first week of March.
Bitcoin (BTC) led the way in terms of digital asset flows, with $863 million in inflows. This was largely driven by the demand for spot BTC ETFs, which recorded $1.8 billion in inflows. In contrast, the Grayscale Bitcoin Trust (GBTC) experienced outflows of $965 million.
Interestingly, Grayscale’s ETF continues to see significant outflows, even though it has been nearly three months since the products were approved in the United States on January 11. These continuous outflows from GBTC have put considerable selling pressure on BTC prices over the past three weeks.
Market experts had predicted that outflows from GBTC would eventually slow down and dry up, leading to a surge in demand for ETFs. However, the current investor trends suggest that GBTC outflows are still ongoing, and it continues to dominate ETF flows.
The selling pressure from ETFs is evident in the BTC price, which has dropped by $4,000 in the past 24 hours and is currently trading just above $66,000.
Many analysts view this price correction as a routine occurrence ahead of the Bitcoin halving event scheduled for April 20. They believe it is a temporary setback and not indicative of a long-term trend.
The BTC price correction has also resulted in approximately $500 million in liquidations, indicating a bearish sentiment among traders. The options market has seen an increase in heavy put calls, further supporting this bearish outlook.
In terms of other cryptocurrencies, Ether (ETH) experienced its fourth consecutive week of outflows, with $19 million leaving the market. However, the altcoin market as a whole saw a net inflow of $18.3 million, with Solana’s (SOL) token leading the way with $6.1 million in inflows.
In terms of geographical distribution, the United States had the largest outflows in the past week, totaling $897 million. Europe and Canada combined saw outflows of $49 million.
Overall, the current market sentiment appears to be turning bearish, with concerns about Bitcoin’s price correction and the outflows from GBTC. It remains to be seen how these factors will continue to impact the crypto market in the coming weeks.