Institutional Outflows From Bitcoin Paints Bearish Picture For Crypto Market

Institutional investors have been fairly neutral on both bitcoin and the crypto market at large 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, current online stream records show that these large investors are starting to find their chosen position in the market, and that is in the camp of the bears.

Bitcoin sees outflows

Bitcoin had registered less inflows over the past month and a half, which had been good for the digital asset despite not having a major impact. This has now completely changed as last week’s numbers show $13 million in outflows for the digital asset.

This bearish sentiment has been more prominent in the short bitcoin which is now heading for its third straight week of outflows. The $7.1 million brought the total outflow from short bitcoin to $28 million. These outflows show that large investors are withdrawing more from the market rather than taking one side over the other, a general bearish trend.

The digital asset outflows for the week came out to $15.6 million during this time. Furthermore, there was a bearish start to the month of 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 think that will be the case this time around.

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

Reason for bearishness

Although it has not had as great an effect as expected, the outcome of the FOMC meeting has largely influenced the behavior of investors in the market. The fourth consecutive rate hike of 75 bps showed that the Fed was nowhere near backing down on its hawkish stance against high inflation rates.

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 is also no surprise that the US led the outflows for the week as the Fed decision has the biggest impact in the region.

Nevertheless, there was still some influx from the other side of the point. Both Switzerland and Germany saw inflows of $6.8 million and $4 million respectively, most of which were focused on altcoins. Ethereum finally put an end to its outflow trends with inflows 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 it is expected that there may be a change in institutional investor sentiment in the coming week. However, overall crypto market sentiment continues to skew largely to the negative, meaning no significant inflows should be expected.

Featured image from BitIRA, chart from TradingView.com

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