Key Notes

Key Notes:

US crypto funds lead decline with $464 million withdrawal, while European markets show resilience, with Germany gaining $21 million.Bitcoin experiences $430 million outflow without corresponding short-Bitcoin investment, suggesting temporary market adjustment.Analysts remain optimistic despite outflows, citing potential Bitcoin surge to $100,000 pending ETF interest and support levels.

International crypto funding products such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares experienced a significant downturn last week, with $415 million in outflows, according to CoinShares.

The report claims that this is the first net outflow in five weeks, ending a streak of consistent inflows. From all indications, however, the sudden shift may be attributed to hawkish signals from the US Federal Reserve and higher-than-expected inflation data.

James Butterfill, Head of Research at CoinShares, explained the reasons behind the decline. He said in a statement on Monday:

“We believe these outflows were triggered by the Congressional meeting with Fed Chair Jerome Powell, who signalled a more hawkish monetary policy stance, coupled with US inflation data exceeding expectations.”

Most of the outflows came from US-based crypto funds, with withdrawals reaching $464 million. In comparison, digital asset investment products in other regions, particularly in European markets, remained relatively stable. For example, Germany recorded $21 million in inflows. Switzerland and Canada also saw positive numbers, adding $12.5 million and $10.2 million, respectively.

Furthermore, US spot Bitcoin ETFs played a big role in the week’s downturn, contributing $580.2 million to the general net outflows.

“Bitcoin, highly sensitive to interest rate expectations, bore the brunt of investor outflows, totalling $430m last week. Interestingly, there were no corresponding inflows into short-Bitcoin products, which instead saw outflows of $9.6m,” Butterfill noted.

For now, market analysts are generally hesitant about what to expect, given how history shows that investor sentiment can shift quickly. However, many, like Bitget Research’s Ryan Lee, believe that Bitcoin and Ethereum remain highly sensitive to macroeconomic factors. According to the lead analyst, there is a possibility that Bitcoin surpasses $100,000 by the end of this week. However, that will depend on two things; its ability to keep attracting strong ETF interest and holding above key support levels, he said.

Lee is also optimistic about Ether, which he says could see a new bullish trend if it breaks through the $2,700–$3,000 resistance zone.

While the outflows of last week show some uncertainty, the crypto market holds tightly to hopes that interest rate trends and regulatory developments will bring renewed momentum to digital assets.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He’s a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa’s fancied distractions include soccer or discussing world politics.

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