The crypto market is experiencing significant declines following crypto products’ fund outflows and Trump’s policies.
Following President Trump’s announcement of the US Crypto Strategic Reserve, the crypto market lost all of its gains, falling more than 14.7% in a week to reach $2.7 trillion in overall evaluation as of March 10. Trump’s acknowledgment that his ideas will hurt the economy in the short term is one of the many variables resulting in the most recent decline in cryptocurrency prices.
The continued withdrawals from cryptocurrency investment products indicate that investors are becoming less risk-tolerant.
Trump Admits the Economy and Crypto Market May Experience Short-term Hardship
Bitcoin’s (BTC) price dropped 4% to $83K, and Ether (ETH) is trading above $2,000 after declining 3.2% over the past day. Solana (SOL) and XRP prices have declined by 7.2% and 4.5%, respectively.
Substantial liquidations have also occurred in the derivatives market. On-chain data shows that $650.80 million was liquidated in the last 24 hours. The most significant hit was long holdings, with $595.75 million in liquidations.
Ethereum and Bitcoin liquidations totaled $114.76 million and $264.22 million, respectively. When buying positions are liquidated, traders’ holdings are instantly sold, increasing market supply and lowering prices.
Meanwhile, US President Donald Trump has admitted that his proposed budget cuts and trade penalties on China, Canada, and Mexico could cause short-term hardship for all financial markets.
Also read:Hence, it is no surprise that crypto fund investors continue to reduce their risk. The significant outflows from cryptocurrency investment products are consistent with the ongoing correction in the market.
The week ending March 7 saw $876M in outflows from digital asset investment products, marking the fourth consecutive week of such outflows, according to a CoinShares analysis. Outflows in the last four weeks have totaled $4.75B, bringing the total inflows for the year down to $2.6B.
Bitcoin Notes the Most Outflows from The Crypto Market
The total crypto asset under management is $142 billion, the smallest since mid-November 2024, a $39 billion drop from its peak. Research head at CoinShares, James Butterfill, believes investor sentiment is still negative, even though this suggests that the rate of outflows is slowing down.”
The Crypto Fear & Greed Index also fell to 10 on March 10, the lowest level since July 2022, signaling extreme fear. According to technical analysis, the current decline in the cryptocurrency market is part of a corrective trend that saw TOTAL, or the total market capitalization of all cryptocurrencies, fall below a descending triangle pattern.
A descending triangle is often created when an asset’s price reaches lower highs while keeping flat support at the bottom. The pattern is confirmed when the price descends by the maximum height of the triangle and splits below the support line with high volume.
Digital Investment Products Saw Their 4th Week of Outflows From the Crypto Market
The CoinShares report also revealed that investment products for digital assets experienced withdrawals of US$876 million for the fourth week. While US investors were bearish, investors in most other regions, including Switzerland, Canada, and Germany, saw this as a purchasing opportunity.
Hence, investment products in these regions recorded inflows of US$23 million, US$14.7 million, and US$13.3 million, respectively. Bitcoin investment products in the US recorded the highest outflows of US$756 million last week.
Also, short-BTC products noted outflows of US$19.8 million, the biggest since December 2024.
Altcoins Were Not Left Out
There were withdrawals from a variety of altcoins’ investment products, the most prominent of which were ETH (US$89m), Tron (US$32m), and Aave (US$2.4m). On the other hand, Solana, XRP, and Sui continue to record inflows, netting US$16.4m, US$5.6m, and US$2.7m, respectively, this past week.
With US$48 million in outflows last week, blockchain-related stock ETPs were not immune to the current bearish sentiment. Industry analysts have revealed that the persistent bearish sentiment in the crypto market has caused investors to explore the options trading market to prevent further losses.
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