Last week, cryptocurrency investments saw a net inflow of $226 million, showing that investors are cautiously optimistic despite ongoing market ups and downs.
According to CoinShares, altcoins finally ended their five-week streak of losses, bringing in fresh investments for the first time in over a month.
A Slowdown but Still Positive
While $226 million is a positive sign, it’s a big drop compared to the previous week’s $644 million inflows. Just a few weeks ago, crypto investments hit a peak of $1.3 billion, with Ethereum leading the way in investor demand.
“Digital asset investment products saw $226 million of inflows last week, suggesting a positive but cautious investor,” the report stated.
The slowdown could be due to macroeconomic factors and regulatory concerns. One key reason, according to CoinShares’ researcher James Butterfill, is that Friday’s minor outflows of $74 million were linked to the U.S. core personal consumption expenditure (PCE) index—a measure of inflation—coming in higher than expected.
As investor Charlie Bilello pointed out:
“The Federal Reserve’s preferred measure of inflation (Core PCE) moved up to 2.8% in February, still well above their 2% target. The market expects the Fed to keep interest rates steady at 4.25-4.50% in their next meeting on May 7.”
Still, there were nine straight days of inflows into crypto exchange-traded products (ETPs) before the slowdown, suggesting that investors remain interested in digital assets.
Bitcoin Still in Demand, Altcoins Show Signs of Life
Despite the slowdown, Bitcoin remained a top choice for investors, attracting $195 million last week. Meanwhile, short-Bitcoin products saw outflows of $2.5 million for the fourth week in a row, suggesting that traders are betting on Bitcoin’s price going up.
More notably, altcoins rebounded after losing $1.7 billion in the past month, bringing in $33 million in fresh investments last week.
Altcoins Making a Comeback?
Ethereum led the way with $14.5 million in inflows, followed by Solana ($7.8M), XRP ($4.8M), and Sui ($4M). Analysts believe altcoins may be nearing their bottom, making them attractive to investors looking for bargains.
Popular crypto analyst Crypto Rover noted:
“Altcoins are oversold. The bottom is close. We’re ready for a bounce.”
Other analysts, including trader Thomas Kralow, agreed, saying that altcoins are “setting up for a comeback.”
Adding to this confidence, project researcher BitcoinHabebe pointed to key technical indicators suggesting a market reversal. He highlighted that the TOTAL3 chart (which tracks the total market cap of altcoins excluding Bitcoin and Ethereum) recently bounced off a key support level.
Market expert Cole Garner also spotted a key buy signal in liquidity metrics. He mentioned the Tether Ratio Channel, an on-chain tool that tracks Bitcoin’s market cap compared to stablecoins, showing signs of fresh capital entering the market.
“Tether Ratio Channel already flashed a double buy signal this month. Now my lower timeframe version is popping off. Fresh capital incoming.”
Historically, whenever the Tether Ratio Channel hits certain levels, it often signals major shifts in market sentiment—either fresh money flowing in or investors pulling out.
Looking Ahead: Is This the Start of an Altcoin Rally?
Even though overall crypto inflows have slowed, the fact that money is moving back into altcoins is a promising sign. Analysts believe that if macroeconomic conditions stabilize, we could see a stronger altcoin rally in the coming weeks.
But for now, investors are keeping a cautious but hopeful stance as they wait to see whether the altcoin recovery will continue or if more volatility is on the way.
