Institutional Outflows From Bitcoin Paints Bearish Picture For Crypto Market

Crypto News
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Institutional investors have been quite neutral on both bitcoin and the crypto market in general for some time now. This has translated into a mix of inflows and outflows to various digital assets, alternating with each passing week, even through the bear market. However, the current net flow data shows that these major investors are starting to find their chosen position in the market and it is in the bears’ camp.

Bitcoin sees outflow

Bitcoin had registered a small influx in the past month and a half, which was good for the digital asset, despite not having much of an impact. This has now completely changed as the Last week’s numbers show $13 million outflow for the digital asset.

This bearish sentiment has been more prominent in bitcoin short which is now entering its third consecutive week of outflows. The $7.1 million brought the total short bitcoin outflow to $28 million. This outflow shows that major investors are withdrawing more from the market rather than choosing one side over the other, a general bearish trend.

Digital asset outflows for the week totaled $15.6 million over the period. Plus, it was a bearish start to November with $19 million in outflows already. So while November has historically been a bullish month for the crypto market, investors don’t seem to believe that will be the case this time around.

Crypto Total Market Cap Chart from TradingView.com

Crypto market suffers general bearishness | Source: Crypto Total Market cap on TradingView.com

Reason for bearishness

While it hasn’t had as profound an impact as expected, the outcome of the FOMC meeting has largely influenced investor behavior in the market. The fourth consecutive 75 basis point rate hike showed that the Fed was nowhere near its aggressive stance against high inflation.

As expected, such high interest rates will have an effect on markets like crypto, severely limiting their ability to grow, especially during a bear market. It’s also no surprise that the United States led the outflow this week, as the Fed decision has the most impact in the region.

Nevertheless, there was still an influx from all over the place. Both Switzerland and Germany saw inflows of $6.8 million and $4 million respectively, most of which focused on altcoins. Ethereum finally ended its outflow trends with an inflow of $2.7 million. XRP followed this trend with inflows of $1.1 million, marking its third week of inflows.

Since then, the crypto market has taken a turn, so the expectation is that there may be a change in institutional investor sentiment in the coming week. However, overall crypto market sentiment remains largely negative, meaning significant inflows should not be expected.

Featured image from BitIRA, chart from TradingView.com

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