Crypto assets extended losses last week as sell pressure gripped investors. Overall, institutional sales remained strong due to high Bitcoin (BTC) numbers, although altcoins traded in the opposite direction. Analysts expect a surge in altcoins like XRP, Solana (SOL), and Ethereum (ETH) with the influx of fresh institutional capital. This month, the wider market has traded sideways, wiping out previous gains.
Altcoins Outpace Bitcoin
Data from CoinShares Digital Asset Weekly Flows shows a general bearish sentiment in crypto assets last week. XRP institutional inflows gained $38.3 million in the previous seven days, up from monthly inflows of $68.9 million. This increase comes despite a major market selloff, restating bullish sentiments. XRP became an institutional favorite last year after speculation about a major price jump due to certain factors.
Large-scale investors flock around altcoins linked to a spot ETF, as seen in Ethereum last year. These products are huge market drivers, opening up a new investment window for traditional players. XRP whales accumulated assets after institutional signals continued to soar. Aside from ETFs, an easing in US regulations set the tone for larger inflows.
Following Donald Trump’s victory, XRP price soared from under the $1 mark to $3, hitting levels not seen in months. The asset temporarily displaced USDT as the third-largest crypto after its market cap soared above $140 billion. Currently, year-to-date (YTD) flows to XRP stand at $200 million due to a bullish January.
Ethereum recorded $3.7 million in inflows, a slight increase compared to the total monthly gain of $789 million. This follows a sharp price drop below the $2,700 level after the infamous Bybit incident. YTD inflows are now over $984 million, with bulls looking to extend figures past the $1 billion mark. Solana and Cardano posted $9 million and $0.1 million inflows, respectively.
Bitcoin Products Fall Short
Bitcoin was the most affected digital asset from last week’s negative trading. Institutional exits totaled $571 million while overall net flows hit $508 million. Recent poor performance lowered sentiment as the price dipped below $100K. At this level, BTC traders hope to recover lost positions, but global macro factors pose a threat to bulls.
“We believe investors are exercising caution following the US Presidential inauguration and the consequent uncertainty around trade tariffs, inflation, and monetary policy. This is also evident in trading turnover, which has fallen considerably from US$22bn 2 weeks ago to US$13bn last week.”
