Bitcoin Faces $1.38 Billion Outflow as Traders Shift to Bearish Positions, Ethereum Struck Harder

Digital asset investment products saw $2 billion exit the market last week, marking the largest outflows since February. This downturn marks the third consecutive week with negative flows, totaling $3.2 billion. CoinShares attributes these outflows to ongoing monetary policy uncertainties and selling activities from significant crypto investors.

Falling prices have contributed to a near 27% decline in total assets under management (AuM) in digital-asset ETPs, dropping from $264 billion to $191 billion.

Digital Asset Exodus

In the latest issue of the Digital Asset Fund Flows Weekly Report, CoinShares reported that Bitcoin suffered the most, with $1.38 billion in outflows, accounting for 2% of total AuM. In contrast, short Bitcoin products attracted $9.1 million in inflows, revealing some traders are bracing for further declines. Over the past three weeks, these ETPs experienced a total of $18.1 million in new inflows.

Ethereum faced an even steeper decline, witnessing $689 million in outflows, or 4% of its AuM. Solana and XRP also reported minor outflows of $8.3 million and $15.5 million, respectively, while Sui, Litecoin, and Cardano managed to attract modest inflows of $6 million, $3.3 million, and $0.4 million.

Multi-asset investment products recorded $31.2 million in new capital as wary investors shifted to diversified products, resulting in $69 million flowing into these ETPs over the last three weeks.

Negative sentiment was predominantly felt in the US, which experienced $1.97 billion in outflows, comprising 97% of the global total, while Switzerland, Sweden, and Hong Kong joined the trend with outflows of $39.9 million, $1.3 million, and $12.3 million, respectively. Canada and Australia also followed suit with $9.8 million and $1.8 million.

Conversely, Germany emerged as the only significant region to benefit from the price downturn, attracting $13.2 million in inflows. Brazil also registered a more conservative $2.4 million in new capital.

Sentiment Cautious But Constructive

Despite current challenges, some market experts contend that Bitcoin is reaching the later stages of its correction rather than initiating a new downward trend. In a statement to CryptoPotato, Zilliqa’s Interim CEO Alexander Zahnd noted that the market twice rejected levels just below $100,000, suggesting that forced selling has largely been resolved, and buyers are starting to defend a critical support zone.

While it is premature to confirm a bottom, he suggested the market is stabilizing. Zahnd indicated that the prevailing bearish sentiment is a result of ETF outflows, reduced liquidity, and a brief pause in institutional investments, which do not reflect a structural change. Instead, investors are awaiting clearer macroeconomic signals in light of the recent Federal Reserve pause and US shutdown concerns. He characterized the overall sentiment as “cautious but constructive.”

Zahnd stated,>

“Positioning has lightened, but we’re not seeing panic. The rotation into ecosystems like Solana shows that capital is still active, just more selective. This phase is about rebuilding pressure, not chasing momentum. If anything, the current environment favors gradual accumulation on support rather than trying to time dramatic moves. The next impulse will likely come once ETF flows stabilize or new institutional buyers step back in.”