Bitcoin ETF Outflows Slow to $264M as Altcoins Attract Fresh Capital

The most striking development is the dramatic slowdown in the rate of outflows from digital asset investment products. After two consecutive weeks of pulling over $1.7 billion, weekly outflows fell to just $187 million last week. This deceleration in the pace of selling is the key signal, not the continued net outflow itself.

Historically, changes in the speed of flows have been more informative than the absolute direction. As CoinShares' research head noted, this pattern has historically offered more useful signals regarding shifts in investor sentiment, often indicating a potential inflection point.

This stabilization coincides with a surge in market activity, as evidenced by a record ETP trading volume of $63.1 billion set last week. High volume at a depressed price level can signal renewed participation and thinning liquidity, which may be setting the stage for a bottom. The flow data now points to a market seeking a local low, even as broader price action remains under pressure.

Bitcoin's Stressed Outflows vs. Altcoin Rotation

Bitcoin's continued outflows highlight the market's deep stress. The asset saw $264.4 million in outflows last week, extending a three-week negative trend. This selling pressure coincides with the Crypto Fear and Greed Index falling to 9, signaling "extreme fear" and widespread deleveraging. The data shows investors are still fleeing the flagship asset even as prices attempt a recovery.

In stark contrast, altcoin funds have turned positive for the first time in three weeks. This marks a clear rotation of capital away from Bitcoin. XRP led the inflows with $63.1 million, followed by Solana and Ethereum. The shift suggests a search for better risk-adjusted returns or specific catalysts in the broader crypto ecosystem, as investors bail on the perceived safe haven.

The bottom line is a market in transition. While Bitcoin remains the focal point of selling, the inflow into altcoins indicates a diversification of risk. This rotation, occurring amid extreme fear, could signal a reallocation of capital ahead of a potential broader market stabilization.

Catalysts, Risks, and What to Watch

The immediate price catalyst is the $70,000 level. Bitcoin briefly fell below it last week, marking the first break since November 2024. That move triggered a bounce, but it also highlighted a key technical vulnerability. Analysts note a break below $70,000 could lead to further declines, with some targeting a potential downside range of $70,000 to $60,000. This level is now a critical support test.

The sustainability of the altcoin inflow rotation remains uncertain. While XRP, Solana, and Ethereum saw fresh capital last week, this shift occurred amid extreme market fear and a broader sell-off. It reflects a search for catalysts, not necessarily a broad-based return of risk appetite. The rotation could be a tactical reallocation, not a definitive trend change, especially if Bitcoin's price weakness persists.

The true signal for a market inflection will be a sustained shift from outflows to net inflows in Bitcoin ETFs. The recent single-day inflow of nearly $562 million was a notable rebound, but total net assets remain down sharply from their mid-January highs. For the flow deceleration to translate into a sustained price recovery, institutional accumulation must become consistent. Until then, the market remains in a fragile state of thin liquidity and high volatility.