The summer period has been marked by lackluster trading activity in the digital asset market. Investment products in the cryptocurrency space have seen outflows amounting to $107 million. This trend is indicative of profit-taking among investors, with weekly trading volumes in these products 36% lower than the year-to-date average. The decline in trading activity extends to the wider on-exchange market as well, with volumes down 62% compared to the year-to-date average, according to a weekly report from CoinShares.
Institutional investors have continued to focus on Bitcoin, but they witnessed outflows of $111 million. This represents the largest weekly outflows since March, largely fueled by increasing regulatory tensions in the United States. Despite this, CoinShares’ report reveals that outflows into short bitcoin positions have halted for the first time in 14 weeks, indicating a shift in sentiment among institutional investors who have stopped betting against the cryptocurrency, even during the summer doldrums.
While Bitcoin and Ethereum experienced outflows amounting to $117 million collectively, there is a notable improvement in sentiment towards altcoins. Solana, in particular, saw significant inflows totaling $9.5 million, marking the highest weekly inflows since March 2022. This indicates growing interest in alternative cryptocurrencies.
In terms of specific altcoins, XRP and Litecoin stood out with positive inflows. XRP saw an influx of $0.5 million, possibly attributed to Ripple’s partial win against the US Securities and Exchange Commission (SEC), which renewed bullish sentiment for the cryptocurrency. Litecoin experienced inflows of $0.46 million, potentially driven by the recent halving event, which served as a catalyst for increased interest in the cryptocurrency.
Not all altcoins saw positive inflows, as Uniswap and Cardano encountered outflows of $0.8 million and $0.3 million, respectively. These outflows suggest that investor sentiment towards these specific cryptocurrencies may be less favorable at the moment.
The summer period has brought about lackluster trading activity in the digital asset market, leading to outflows in crypto investment products. While institutional investors have shifted their focus towards Bitcoin and witnessed outflows, there is a growing improvement in sentiment towards altcoins, with Solana being the standout performer in terms of inflows. XRP and Litecoin also experienced positive inflows, while Uniswap and Cardano faced outflows. These dynamics indicate that market participants are navigating through regulatory uncertainties and the summer doldrums, seeking opportunities in both Bitcoin and alternative cryptocurrencies.