Key Takeaways:
- Digital asset investment products saw $508M in outflows last week, extending the two-week total to $924M.
- Bitcoin led the downturn with $571M in outflows, while altcoins like XRP and Solana saw steady inflows.
- Weak investor sentiment and declining Bitcoin network activity raise concerns about potential market stagnation.
The crypto investment landscape witnessed a significant downturn last week, with digital asset investment products registering $508 million in outflows, according to the report from Coinshares.
This marks the second consecutive week of heavy withdrawals, totaling $924 million, after an 18-week bull run that brought in $29 billion. The uncertainty following the U.S. presidential inauguration, coupled with concerns over trade tariffs and monetary policy, has led investors to adopt a cautious stance.
A notable decline in trading turnover highlights this sentiment shift, plummeting from $22 billion two weeks ago to $13 billion last week. The exodus was most pronounced in the U.S., where outflows reached $560 million. However, European investors appeared undeterred, as Germany and Switzerland recorded inflows of $30.5 million and $15.8 million, respectively.
Bitcoin bore the brunt of the sell-off, shedding $571 million, while short-Bitcoin products saw inflows of $2.8 million, indicating some investors are betting on further declines. Despite Bitcoin’s struggles, altcoins continued to attract capital, with XRP leading the way, recording $38.3 million in inflows.
Since mid-November 2025, XRP has accumulated $819 million in inflows, reflecting optimism that the SEC may abandon its lawsuit. Other assets, including Solana, Ethereum, and Sui, saw modest inflows of $8.9 million, $3.7 million, and $1.47 million, respectively.
Bitcoin Network Activity Declines as Sentiment Weakens
On-chain data from CryptoQuant indicates a clear decline in Bitcoin network activity, further dampening investor confidence. The number of active wallets and transactions related to Bitcoin deposits and withdrawals is on a downward trajectory.
Additionally, spot Bitcoin ETFs are experiencing a slowdown in accumulation, with recent minor outflows adding to the cautious market outlook. One concerning trend is the drop in unspent transaction outputs (UTXOs), reminiscent of the correction period seen in September 2023.
Historically, a significant decline in UTXOs has signaled market cycle peaks, as witnessed in 2017. However, analysts caution that this metric alone isn’t sufficient to declare the end of the current cycle, as other indicators still suggest a bullish undertone.
Bitcoin’s rally, driven by Trump’s election optimism and potential asset shifts, has cooled due to a lack of policy changes and rising geopolitical tensions. With bullish narratives priced in, fresh catalysts are needed for another surge. If uncertainty persists, consolidation like March 2024 may follow.
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