Crypto inflows experienced a significant downturn last week, retreating to $527 million amid volatile market sentiment.

This marks a stark decline in inflows into digital asset investment products compared to the two subsequent weeks leading up to the last one.  

DeepSeek Hype Affects Crypto Inflows

The latest CoinShares report indicates that crypto inflows only reached $527 million in the last week of January, reflecting the influence of broader market trends on investor sentiment. It marks a notable deviation from what was seen during the weeks before that.

As BeInCrypto reported, the two weeks leading to the last saw crypto inflows hit $1.9 billion and $2.2 billion, respectively. CoinShares’ James Butterfill ascribes the retraction in crypto inflows to the hype around DeepSeek, the AI agent that recently sucked liquidity from crypto and stock markets.

“Digital asset investment products saw inflows totaling $527 million last week. However, intra-week flows reflected volatile investor sentiment, heavily influenced by broader market concerns, such as the DeepSeek news, which triggered $530m in outflows on Monday,” an excerpt in the report read.

News on China’s AI platform triggered $530 million in outflows on Monday. While the initial DeepSeek frenzy led to a shrink in crypto inflows, the market rebounded later in the week. There were over $1 billion in fresh inflows. However, it was not enough to sustain the trend of inflows near the $2 billion mark, a threshold set during the second and third weeks of January.

The resilience to maintain positive flows suggests that, despite intermittent pullbacks, investor confidence in the crypto sector remains relatively strong. Bitcoin (BTC) continued to attract investor interest, recording inflows of $486 million last week.

A week ago, DeepSeek-related euphoria led to $1 billion in crypto liquidations in a single day. This exacerbated the industry’s prevailing uncertainty. Furthermore, its impact extended beyond digital assets, rattling crypto miner stocks, artificial intelligence-related equities such as Nvidia, and AI tokens.

“DeepSeek vibes are definitely shaking things up,” said Emily, a popular user on X.

These remarks reflect the widespread uncertainty permeating the industry. However, the industry has seen signs of recovery, particularly among AI agent coins, which rebounded in response to DeepSeek’s misfortunes.

Beyond the DeepSeek-induced setbacks, broader economic concerns, such as trade tensions and US jobs data, could influence inflows into digital asset investment products this week.

As BeInCrypto reported, trade tensions sprouting from President Donald Trump’s new tariffs have already caused over $2 billion in liquidations. According to Coinglass data, over 730,000 traders were blown out of the water on Monday.

BNB has bounced off the crucial $500 support level, sparking speculation about whether this marks the beginning of a bullish resurgence or a temporary relief before another downturn. After facing sustained selling pressure, buyers have stepped in to defend this key level, fueling hopes for a potential recovery. However, with resistance levels still looming, the true strength of this rebound remains uncertain.

Market sentiment remains uncertain as bulls attempt to regain control while bears stay cautious. BNB’s next move hinges on breaking key resistance levels and sustaining higher prices. A successful breakout could confirm a bullish continuation, while fading momentum may lead to another rejection and a retest of lower support zones.

Technical indicators such as RSI and moving averages will play a crucial role in determining the next move. Bulls may have the upper hand if the RSI trends upward and key levels are reclaimed. On the other hand, if bearish pressure resurfaces, the possibility of further downside cannot be ignored.

Analyzing The Buying Pressure On Price

Currently, BNB is displaying strong upside movements as it moves toward the $605 resistance level. The coin has been steadily climbing, indicating buyers are regaining control and pushing its price higher. This move comes after a successful rebound from the key $500 support level, which has sparked renewed optimism among traders. 

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Despite the ongoing bullish momentum, the price’s position under the 100-day SMA signals that BNB has not yet fully regained a strong positive trend in the longer term. It could also indicate that there is still some selling pressure from bears that might prevent the price from maintaining a steady rise.

If BNB continues to trade below this key moving average, it could have difficulty sustaining its current upbeat momentum. The longer it remains below the SMA, the greater the risk of a reversal or consolidation.

Additionally, the RSI (Relative Strength Index) indicator remains in the oversold territory, showing no immediate signs of moving back toward neutral or the overbought zone. An RSI reading below 30% typically implies that the asset is oversold, and there may be more downside potential or a need for price correction. 

However, the RSI’s failure to exit the oversold zone suggests that the market is still under strain, with bearish pressure possibly outweighing bullish pressure. For the bulls to take control and push BNB higher, the RSI would need to gradually move back above the 30-50% range, triggering a shift toward more balanced market conditions.

Is BNB Ready For A Breakout Or Heading For Another Decline?

In conclusion, BNB’s current upward movement is an encouraging sign for the bulls, but the real test lies at the $605 resistance level. Should bulls succeed in pushing the price above this level, a stronger rally may follow, resulting in the cryptocurrency testing other resistance levels such as $680 and $724.

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Nevertheless, failure to clear the $605 zone might lead to a consolidation phase or possible pullback to the $531 and $500 support levels. Traders will need to closely monitor market conditions and technical indicators to gauge whether the current bullish sentiment can be sustained.

Featured image from Shutterstock, chart from Tradingview.com

Amid the broader market downturn, user activity on the Layer-1 (L1) network Ethereum has plummeted to its year-to-date low. This comes as the value of Ethereum’s native token, ETH, sinks below the $3,000 mark for the first time since November.

With a strengthening bearish sentiment, ETH could extend its price decline in the short term.

Ethereum Sees Decline in User Activity

On February 2, ETH fell to a five-month low of $2,143 before making a slight rebound. While this price dip is part of a broader market decline, a key factor contributing to ETH’s struggles is a reduction in the active addresses on its network. 

According to Glassnode, the daily count of active addresses on the Ethereum network fell to a year-to-date low of 420,346 on February 2. 

A decline in Ethereum’s active addresses suggests reduced user activity on the network, indicating lower transaction volumes and engagement with the decentralized applications on the blockchain.

The drop in demand can weaken ETH’s price momentum, as fewer transactions mean less network utility and a reduced burn rate, making ETH more inflationary. This has been the case for the leading altcoin, whose circulating supply has added 12,066 ETH over the past week. 

According to Ultrasoundmoney, 12,066 ETH, valued above $31 million at current market prices, have been added to the altcoin’s circulating supply in the past seven days. 

When more ETH tokens enter circulation like this, the overall supply available for purchase rises. This typically results in a price drop, especially as the increased supply can exceed demand.

ETH Price Prediction: More Pain Ahead for Coin Holders?

ETH trades at $2,595 at press time, noting a 16% price drop over the past 24 hours. The coin’s negative Balance of Power (BoP) on the daily chart reflects the strong selling pressure. At press time, the indicator stands at -0.38.

The BOP indicator measures the strength of buyers versus sellers by analyzing price movements within a given period. When BOP is negative, sellers have more control, indicating bearish momentum and potential downward pressure on the asset’s price.

If the downtrend continues, ETH’s value could fall to $2,500. If this support level fails to hold, the altcoin’s price could drop further to $2,224.

However, a positive shift in market trends could propel ETH’s price to $2,811.