TL;DR
- Inflows into cryptocurrency ETFs have dried up, turning negative.
- Digital Asset Treasuries (DATs) are accelerating the liquidation of their positions.
- Crypto market sentiment collapses, showing structural and psychological fatigue.
The cryptocurrency market is going through a period of unsettling quiet. The momentum that characterized previous months seems to have dissipated, giving way to a stagnation that, according to analysts, could mask deeper problems. Key factors in this weakness include the exhaustion of ETF demand and a growing aversion to risk.
Investor optimism has evaporated. Inflows into cryptocurrency exchange-traded funds (ETFs) have not only stopped but have turned net negative in recent weeks. The market continues, moreover, to underperform traditional stocks, which are reaching new highs.
Market analyst Miles Deutscher noted that several forces are converging to pressure Bitcoin and Ethereum. “ETF demand has dried up… and there’s a DAT (Digital Asset Trusts) unwind going on for both $BTC and $ETH,” he explained.
Psychological and Structural Fatigue
Deutscher also highlighted the persistent impact of the October 10 market shock, a day of massive liquidations that left repercussions. “October 10 did a lot of damage on a few fronts… Psychologically, it’s a bad look for crypto,” he stated, suggesting that market makers are still unwinding positions from that event.
This environment caused widespread exhaustion among retail investors. Meanwhile, altcoins reflect this risk aversion. Analyst Daan Crypto Trades highlighted that only 29% of the top 50 altcoins have managed to outperform Bitcoin this year, a stark contrast to the 2020-2021 cycle.
With crypto market sentiment collapsing and Bitcoin’s price consolidating below key resistances, the industry seems to have lost its confidence. Deutscher concludes that only a decisive Bitcoin impulse (a “proper $BTC pump”), even without a fundamental reason, could be capable of reversing this dynamic and completely changing sentiment.
