Altcoin Inflows Break Five-Week Negative Streak as Crypto Outflows Hit $226 Million
Cryptocurrency inflows surged to $226 million last week, reflecting cautious optimism among investors as the market continues to fluctuate.
According to a report from CoinShares, altcoin inflows have ended a five-week streak of negative inflows, marking the first time in over a month that altcoins have seen an increase in inflows.
Crypto Inflows Hit $226 Million Last Week
Although inflows last week only reached $226 million, this was a significant drop from the previous week’s $644 million, when inflows ended a five-week streak of outflows. The market previously saw a record high of $1.3 billion inflows, with Ethereum outperforming Bitcoin in terms of investor interest.
“Digital asset investment products attracted $226 million inflows last week, reflecting a cautious but optimistic investor sentiment,” an excerpt from the CoinShares report said.
The drop in inflows to $226 million reflects a more cautious stance by investors as they assess macroeconomic factors and regulatory uncertainty.
According to CoinShares researcher James Butterfill, the small $74 million increase in inflows on Friday was due to a higher-than-expected U.S. personal consumption expenditure (PCE) index.
“The Federal Reserve’s preferred inflation measure (core PCE) rose to 2.8% in February, well above the Fed’s 2% target,” noted investor Charlie Bilello. Markets are expecting the Fed to keep interest rates unchanged at its next meeting on May 7 at 4.25%-4.50%.
Bitcoin Continues to Attract Strong Inflows
Despite the slowdown in crypto flows, Bitcoin has continued to attract large inflows, with $195 million inflows. Meanwhile, Bitcoin short-selling products recorded $2.5 million in outflows for the fourth consecutive week, indicating that investors are increasingly bullish on Bitcoin, even as altcoins begin to recover.
Altcoins reportedly attracted $33 million in inflows last week, after suffering a total of $1.7 billion in outflows over the past month.
Altcoins Recover After $1.7 Billion Outflows
Ethereum (ETH) led the recovery, attracting $14.5 million, followed by Solana (SOL) with $7.8 million. XRP and Sui also recorded inflows of $4.8 million and $4.0 million, respectively. Many market analysts believe that altcoins have bottomed, opening up potential buying opportunities.
"Altcoins are oversold. The bottom is near. We are preparing for a big rally," noted prominent analyst Crypto Rover.
These views are also supported by many other analysts. Thomas Kralow, a prominent trader, said that "altcoins are preparing for a strong comeback."
Indicators point to an upcoming reversal
In addition, Bitcoin researcherHabebe, who is known for analyzing mid- and low-cap coins, pointed to technical indicators that point to a reversal in the market.
“As bears try to instill fear and get you to sell altcoins, the TOTAL3 [altcoin market cap excluding Bitcoin and Ethereum] chart just bounced off a higher timeframe retest,” the analyst said.
This means that most altcoins have bottomed and are expected to start recovering soon. Analyst Cole Garner also noted a key buy signal from market liquidity indicators, further supporting the view that altcoins are on the way to recovery.
Tether Ratio Channel Flashes Buy Signal
Garner pointed out that the Tether Ratio Channel – a blockchain analytics tool that tracks the market cap ratio of Bitcoin to stablecoins – has flashed a double buy signal this month. This typically indicates that new capital is flowing into the market.
While the overall inflows into the cryptocurrency market have shown signs of slowing, the return of inflows into altcoins shows a return of confidence from investors. Analysts believe that altcoins could be on the verge of a strong recovery, as the market slowly enters a reversal phase.
The coming weeks will be crucial in determining whether altcoins continue to maintain their bullish momentum or whether caution will prevail in the market again.