Crypto Funds Suffer More Withdrawals: Investor Sentiment Weakens Over Five Weeks

Investor interest in cryptocurrency funds remains low following a significant outflow of $288 million in the past week. This marks five consecutive weeks of withdrawals, resulting in total outflows of $4 billion, trailing behind the $6 billion recorded in the same period last year.

Participation in the market has decreased sharply, with exchange-traded product (ETP) trading falling to $17 billion, the lowest level since July 2025. This decline indicates a growing disengagement among both institutional and retail investors this quarter.

Short Selling on the Rise

According to CoinShares’ latest weekly report on digital asset fund flows, Bitcoin continues to weigh on market sentiment with a loss of $215 million. Short positions are increasing, with short-bitcoin funds recording an inflow of $5.5 million, the highest among individual assets. Ethereum also saw considerable outflows of $36.5 million, alongside continued declines in multi-asset products and Tron, which lost $32.5 million and $18.9 million, respectively.

Despite minimal inflows from XRP, Solana, and Chainlink — ranging from $1.2 million to $3.5 million — these amounts are insufficient to counterbalance ongoing outflows across altcoins.

The United States drove the majority of outflows this week, contributing $347 million, while international investors viewed recent price drops as buying opportunities. Switzerland, Canada, and Germany led in inflows with $19.5 million, $16.8 million, and $16.2 million, respectively, with smaller amounts flowing into Brazil, Australia, and the Netherlands.

Bitcoin Faces Difficult Market Conditions

Bitcoin fell below $65,000 during early trading on Monday in Asia, triggering approximately $230 million in long liquidations as markets navigate a mix of geopolitical and economic challenges. This downturn followed former President Donald Trump’s announcement of an increase in a proposed global tariff to 15%, shortly after the U.S. Supreme Court rejected his prior tariffs.

Such policies add uncertainty to an already shrinking risk appetite, combined with renewed concerns over a potential conflict between the U.S. and Iran. QCP Capital has noted that the question isn’t whether Bitcoin has failed but rather how long these troubling conditions will last.

Potential Catalysts Ahead

With Bitcoin potentially facing its fifth consecutive month of losses, historically indicative of late-stage conditions, all attention turns to upcoming developments, including the progress of the Clarity Act and U.S.-Iran negotiations. QCP has also highlighted that reclaiming $74,000 is vital for any meaningful recovery.

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