Bitcoin and Ethereum see major outflows as altcoin investments rise

Digital asset investment products experienced significant outflows last week, with investors pulling a whopping $584 million from the market, according to CoinShares’ latest report .

Bitcoin and Ethereum took the hardest hits, with Bitcoin seeing $630 million in outflows and Ethereum experiencing $58 million in outflows.

Interestingly, this shift has led to a surge in altcoin investments, with multiple asset products receiving $98 million in inflows. This suggests that investors are spotting opportunities in the altcoin market despite the broader pessimism around major cryptocurrencies.

Source: CoinShares

This marks a second consecutive week of outflows, shaving off a total of $1.2 billion from digital asset investment products. The prevailing bearish sentiment among investors is largely attributed to the uncertainty surrounding potential interest rate cuts by the Federal Reserve this year.

Despite the outflows, there was no huge increase in short positions against Bitcoin, indicating a somewhat complex investor sentiment. The bearish outlook that affected Bitcoin also took its toll on Ethereum, although the scale was somewhat smaller.

Altcoins and multi-asset products gain traction

In contrast to the significant outflows from Bitcoin and Ethereum, multi-asset products saw a notable $98 million in inflows. This shift indicates that investors are viewing the current weakness in the altcoin market as a prime buying opportunity.

Source: CoinShares

This sentiment is further supported by the inflows into specific altcoins. Solana, Litecoin, and Polygon were among the notable beneficiaries, receiving $2.7 million, $1.3 million, and $1 million, respectively.

Global trends also reflect this shift. The United States led the charge in outflows with $475 million, followed by Canada with $109 million. Germany and Hong Kong also experienced outflows of $24 million and $19 million, respectively.

However, not all regions followed this trend. Switzerland and Brazil bucked the consensus, recording inflows of $39 million and $48.5 million, respectively.

Source: CoinShares

The altcoin market’s increased traction also aligns with industry expectations. There is growing anticipation for the approval of a spot Ethereum ETF, expected on July 2nd, according to Bloomberg ETF analyst Eric Balchunas.

Ethereum short-term prediction

Currently, Ethereum is trading around $3,300, showing slight recovery signs after a downward trend. The Fibonacci Bollinger Bands (FiBB) suggest key resistance levels at approximately $3,455 and $3,422, while support levels are at $3,312.80 and $3,279.

Source: TradingView

Given Ethereum’s current market sentiment and outflows, a bearish outlook remains plausible unless it can break above the upper resistance levels.

If it manages to hold above the support at $3,312.80 and push past the resistance at $3,422.17, it could signal a potential bullish reversal towards the $3,455.97 range.

However, if it fails to maintain this support, further declines towards $3,279.00 and below are possible.

Reporting and analysis by Jai Hamid