Bitwise Analysis Points To Softer Institutional Buying And Persistent Crypto Fund Outflows Despite Stable Sentiment
In Brief
Bitwise reports Bitcoin fell ~4% amid ETF outflows, weaker institutional demand, and macro pressures, while sentiment stayed neutral and altcoins showed selective strength.
Cryptocurrency asset manager Bitwise released a new cryptocurrency market analysis indicating that digital asset markets faced renewed pressure over the past week, with Bitcoin declining approximately 4% and broader institutional demand showing signs of weakening. The report pointed to persistent outflows from spot Bitcoin exchange-traded funds (ETFs), rising bond yields, and macroeconomic uncertainty as key factors influencing market performance.
Bitcoin ended the week near $73,800 after falling from around $77,000, dropping below the average acquisition cost of Strategy’s Bitcoin holdings. According to Bitwise, stronger-than-expected U.S. core Personal Consumption Expenditures (PCE) inflation data reinforced expectations that interest rates may remain elevated for longer, contributing to investor caution. While Bitcoin underperformed major asset classes, U.S. equities remained near record highs and gold continued to trade at elevated levels. Government bond markets weakened further, with long-term Treasury yields reaching multi-decade highs, while oil prices remained supported by ongoing geopolitical tensions in the Middle East.
Within the digital asset sector, Hyperliquid’s HYPE token stood out as a notable exception to broader market weakness, reaching new record highs and outperforming Bitcoin amid continued growth in adoption and platform revenues. Bitwise also noted that Bitcoin’s recent weakness aligns with historical seasonal patterns, with the May-to-October period often producing comparatively weaker returns.
The report highlighted growing concerns surrounding institutional demand. Strategy, viewed as one of the most significant corporate buyers of Bitcoin, has faced challenges raising capital after its variable-rate preferred security traded below its stated value. This development has reportedly reduced the company’s ability to fund additional Bitcoin purchases. Combined with several consecutive weeks of ETF outflows, Bitwise said the market is currently experiencing a reduced level of marginal buying demand.
Institutional Demand Weakens as ETF Outflows Continue
Market sentiment, however, remained relatively stable. Bitwise’s proprietary Cryptoasset Sentiment Index continued to signal a neutral-to-slightly bullish outlook, with most tracked indicators remaining above short-term trend levels. The report also observed increased performance dispersion across the digital asset market, with sectors such as decentralised finance, artificial intelligence-related tokens, and meme coins outperforming Bitcoin and Ethereum. Historically, rising dispersion has often been associated with improving risk appetite and the emergence of multiple investment narratives.
Fund flow data reflected continued investor withdrawals from crypto investment products. Global cryptocurrency exchange-traded products recorded approximately $1.74 billion in net outflows during the week, led by Bitcoin-focused products, which saw roughly $1.49 billion in withdrawals. Ethereum products experienced additional outflows of around $264 million. In contrast, non-Ethereum altcoin products attracted modest inflows, largely driven by investment demand for HYPE-related products.
On-chain data suggested that many long-term Bitcoin holders remain unwilling to sell despite substantial unrealised losses. Long-term holder supply reached a record level of approximately 14.9 million BTC, indicating continued accumulation and limited distribution. Bitwise stated that this dynamic has contributed to tighter supply conditions, creating a market structure that could become increasingly sensitive to future demand shocks.
Looking ahead, the firm identified the upcoming European Central Bank interest-rate decision and the U.S. nonfarm payrolls report as key events likely to influence market direction, interest-rate expectations, currency movements, and investor risk appetite in the near term.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
