Crypto outflows reached $508 million last week, marking the second series of negative flows in 2025. This brings the last two weeks of outflows to $925 million.

The outflows point to a shift in sentiment following an 18-week rally that accumulated $29 billion as investors weigh the impact of the US economic events and uncertainty surrounding trade tariffs, inflation, and monetary policy.

Bitcoin Takes the Biggest Hit While Altcoins Rally

The latest CoinShares report indicates that Bitcoin (BTC) bore the brunt of investor caution, seeing outflows of $571 million. Further, some traders opted to increase short positions, leading to $2.8 million in inflows for short-Bitcoin products.

This follows a similar trend from the previous week, when hawkish rhetoric from the Federal Reserve and CPI data contributed to the first crypto outflows of 2025. According to CoinShares, the latest stream of outflows comes amid heightened caution as investors continue to digest US economic data.

“We believe investors are exercising caution following the US Presidential inauguration and the consequent uncertainty around Trump’s trade tariffs, inflation, and monetary policy. This is also evident in trading turnover, which has fallen considerably from $22 billion 2 weeks ago to $13 billion last week,” an excerpt in the report read.

Regionally, the US accounted for most of the outflows, losing $560 million, accentuating concerns about the country’s economic policies.

Interestingly, however, while Bitcoin struggled, altcoins continued to see positive momentum. XRP led the way with $38.3 million in inflows, bringing its total since mid-November 2025 to $819 million.

XRP’s strong performance comes amid increasing anticipation of a US SEC (Securities and Exchange Commission) decision on an XRP ETF. The deadline for the SEC to approve or reject certain ETF applications has begun. Investors remain hopeful that XRP will gain regulatory clarity.

If approved, an XRP ETF could drive further institutional investment, reinforcing the altcoin’s resilience amid broader market uncertainty. However, XRP’s surge reflects increasing investor optimism that the US SEC may drop its lawsuit against Ripple.

Recent developments, including the SEC’s acknowledgment of Bitwise’s XRP ETF application and the launch of an XRP ETF in Brazil via Hashdex, fuel speculation further.

Other altcoins also saw inflows, with Solana attracting $9 million, Ethereum gaining $3.7 million, and Sui receiving $1.5 million. This suggests a potential shift in investor focus from Bitcoin’s digital gold narrative towards altcoins with stronger technical fundamentals and growth potential.

Meanwhile,this skittish market sentiment could be further influenced by upcoming US economic data this week. As BeInCrypto reported, Thursday’s GDP and Friday’s PCE inflation data could provide key insights into Federal Reserve policy direction.

As Bitcoin’s sensitivity to macroeconomic uncertainty amplifies, undesirable reports later in the week could exacerbate selling pressure. Altcoins appear to be benefiting from speculative interest and potential diversification plays.

The divergence in investor sentiment between Bitcoin and altcoins suggests a potential shift in market structure, with some analysts already visualizing an altcoin season.

The leading coin, Bitcoin, has been trading within a narrow range since the beginning of February. It has struggled to break out of consolidation as both buying and selling pressures remain subdued. 

On-chain data suggests that this period of sideways movement could persist due to weakening activity on the Bitcoin network.

Bitcoin Could Face Prolonged Sideways Movement as Network Activity Drops

According to a recent report by pseudonymous CryptoQuant analyst Avocado_onchain, Bitcoin network activity has been steadily declining, contributing to BTC’s recent narrow price movements. If this continues, “we must consider the possibility of another prolonged consolidation phase, similar to what began in March 2024,” the analyst says.

One such data Avocado considers is the number of daily active wallet addresses on the Bitcoin network. According to CryptoQuant’s data, when observed using a 30-day small moving average (SMA), the daily count of addresses that have completed at least one BTC transaction has plummeted by 2% since February 1.

A decline in active daily wallets on the Bitcoin network signals reduced user demand. This can contribute to downward price pressure on the coin, as decreased network activity typically aligns with lower buying interest.

In addition, Avocado reports that “the number of UTXOs is also decreasing, with the magnitude of the decline similar to the correction period in September 2023.”

Unspent Transaction Output (UTXO) tracks the amount of Bitcoin left after a transaction, which can be used as input for future transactions. It represents the available balance that can be spent on the network. When the number of UTXOs declines, fewer new coins are being distributed or moved, suggesting reduced transaction activity. This indicates a period of consolidation, where investors are holding rather than spending their coins.

“If this trend continues, we could see signs of investor exodus similar to the market cycle peak of 2017. However, a simple decline in UTXOs alone is not enough to confirm the end of the current cycle, as other indicators still suggest a bullish outlook,” Avocado writes.

Bitcoin Hovers Near Key Support—Will It Hold or Break Lower?

As of this writing, BTC trades near the support line of its horizontal channel at $95,527. If the Bitcoin network activity wanes, further affecting the demand for the king coin, its price could break below this level. In this scenario, BTC could drop to $92,325.

On the other hand, if market trends shift and the buying pressure gains momentum, the coin could rally toward the resistance at $99,031 and attempt a crossover. If successful, BTC could reach $102,665. 

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