Market Downtrend Triggers Bitcoin Inflows from Institutional Investors

The market continues to be in disarray as the price of Bitcoin has now fallen to the low $30,000s. Before that, confidence in the market fell, leading to lower inflows/higher outflows over the past few weeks. However, with prices now at their lowest levels, institutional sentiment towards digital assets has shifted this year, leading to the first major inflows into digital assets in weeks.

$45 million flows into Bitcoin

Bitcoin has now seen Inflow after weeks of outflow. The past week has proven positive for the pioneering cryptocurrency with inflows of up to $45 million. This is a complete shift on the part of institutional investors, who have been pulling money out of digital assets to potentially put them into their altcoin portfolios.

Related reading | Bitcoin exchange inflows hit three-month high, markets brace for more downside

Naturally, these institutional investors have been pulling out when indicators point to a bear market and are now taking a piece of the pie by trading bitcoin at low prices. This marks the return of positive sentiment among these investors.

Bitcoin bears followed the same trend and rode with it, recording its second-largest weekly inflows on record. With $4 million flowing into Short Bitcoin over the past week, its total assets under management (AuM) now hit a new high of $45 million.

BTC struggles to find support above $31,000 | Source: BTCUSD on TradingView.com

Other digital asset investment products have also not been excluded from the massive inflow. This time, a total of $40 million has flowed into digital asset investment products, an astonishing turnaround.

Although outflows were more dominant last week, altcoins were not left out. In this regard, however, Solana will be breaking the mold as the only altcoin to record any significant inflows, with $1.9 million flowing into the digital asset.

As for other altcoins, outflows continue as negative sentiment continues to rock the cryptocurrency. In a one-week period, $12.5 million left the digital asset. So far, 0.8% of Ethereum’s total AUM has left the digital asset as its year-to-date outflows have now reached $207 million.

Related reading | Bitcoin falls below $30k as markets show signs of paranoia

Inflows and outflows remain inconsistent across market regions. Investment products in the North American market have recorded $66 million, according to a CoinShares report. Across Europe, capital outflows dominated, with a total of $26 million keeping digital asset investment products in the region.

Nonetheless, new trends flowing into assets such as Bitcoin and Solana prove that institutional investment has moved away from woodwork to capitalize on the price weakness shown in the market. This price weakness continues, with Bitcoin still struggling to establish support above the $31,000 price range.

Featured image from Investopedia, chart from TradingView.com

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