Cryptocurrency inflows reached $226 million last week, indicating a cautiously optimistic investor sentiment amid continued market volatility.
According to CoinShares data, altcoins broke a five-week negative trend and recorded inflows for the first time in a month.
Cryptocurrency Inflows of $226 Million Last Week
This result shows a significant slowdown compared to the previous week, which saw inflows of $644 million. This ended five consecutive weeks of outflows. Previously, inflows had reached $1.3 billion, with Ethereum leading investor demand ahead of Bitcoin.
"Digital asset investment products recorded inflows of $226 million last week, suggesting positive but cautious investors," reads an excerpt from the report.
The retreat to $226 million last week suggests a more cautious approach as investors assess macroeconomic conditions and regulatory uncertainty.
Specifically, CoinShares researcher James Butterfield explains the $74 million small outflow on Friday was due to US Personal Consumption Expenditures (PCE) exceeding expectations.
"The Fed's preferred inflation indicator (core PCE) rose to 2.8% in February, still exceeding the 2% target. The market expects the Fed to maintain rates at 4.25-4.50% at its next meeting on May 7," investor Charlie Bilello mentioned.
Nevertheless, this occurred after nine consecutive inflows into cryptocurrency ETPs.
Despite the slowdown, Bitcoin continued to attract strong inflows of $195 million. Meanwhile, short Bitcoin products recorded $2.5 million in outflows for the fourth consecutive week, suggesting investors are bullish on Bitcoin, even as altcoins begin to recover.
According to the CoinShares report, altcoins recorded inflows of $33 million last week, following $1.7 billion in outflows last month.
Altcoins Rebound After $1.7 Billion Outflow in 5 Weeks
Ethereum (ETH) led the recovery, drawing in $14.5 million, while Solana (SOL) recorded $7.8 million. XRP and Sui recorded $4.8 million and $4 million respectively. Market analysts believe altcoins are establishing a bottom and creating potential buying opportunities.
"Altcoins are oversold. The bottom is near. Preparing for a rebound," emphasized famous analyst Crypto Rover.
Other analysts shared similar views, suggesting increasing interest in altcoins, including trader Thomas Kralow, who said, "Altcoins are preparing to return."
Adding credibility to this bullish altcoin outlook, project researcher Bitcoinhabebe pointed to technical indicators suggesting a market reversal.
"While bears spread fear and try to make you sell your altcoins, TOTAL3 [altcoin market cap chart excluding Bitcoin and Ethereum] rebounded on HTF [high timeframe] retest," the analyst said.
This suggests most coins have established a bottom and are expected to reverse soon. Cole Garner further supported this view by mentioning key buy signals in market liquidity indicators.
"The Tether ratio channel has already sent a double buy signal this month. Now my lower timeframe version is activating. New capital is flowing in," he noted.
The Tether ratio channel is an on-chain analysis tool that helps identify potential buy signals by tracking the ratio of Bitcoin's market cap to stablecoin market cap, serving as a leading indicator for short to medium-term trends.
When the ratio reaches certain levels, it can signal changes in market sentiment, often indicating whether new capital is entering or leaving the market.
While overall cryptocurrency inflows have slowed compared to the previous week, the return of capital to altcoins suggests a recovery of investor confidence. Analysts are observing market indicators suggesting an imminent altcoin rally, believing most coins have established a bottom.
As investors consider macroeconomic uncertainties, the next few weeks may be crucial in determining whether the altcoin recovery will continue or caution will prevail.
