Investment activity in crypto funds slowed sharply for the week ending Sept. 6, with total outflows reaching $352 million despite US economic indicators pointing toward conditions that usually encourage risk-taking, according to CoinShares‘ latest report.

James Butterfill, head of research at CoinShares, said weaker employment numbers and growing expectations for a Federal Reserve rate cut in September should have acted as tailwinds.

Instead, they coincided with a 27% drop in weekly trading volumes, signaling that investors were less willing to commit new capital to digital assets. Despite the downturn, longer-term market sentiment remains positive.

According to CoinShares, year-to-date inflows stand at $35.2 billion on an annualized basis, putting the market 4.2% ahead of last year’s full-year total of $48.5 billion.

Ethereum outflows dominate

While Bitcoin products managed to pull in $524 million last week, the overall market picture was dominated by Ethereum’s struggles.

According to CoinShares, investors removed $912 million from ETH-linked products, extending a pattern of daily withdrawals across multiple issuers for seven consecutive days.

This setback reflects the slowing sentiment surrounding the digital asset, even as its inflows for the year remain robust at $11.2 billion.

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In contrast, other major altcoins, such as XRP and Solana, continued to attract steady interest, showing that institutional investors’ appetite remains large for these products.

During the reporting period, Solana logged $16.1 million in weekly inflows, marking its 21st straight positive week and bringing the year’s total to $1.16 billion. Conversely, XRP-focused funds added $14.7 million in fresh capital, pushing their 2025 inflows to $1.22 billion.

Analysts link this consistent activity to speculation surrounding the eventual approval of spot ETFs tied to both assets. Notably, Bloomberg analysts have assigned an over 90% chance of this happening.

US investors lead market redemption

Across the regions, capital movements varied as US investors led redemptions in the market.

According to CoinShares, the US led global outflows with $440 million, while Sweden and Switzerland posted $13.5 million and $2.7 million in redemptions.

At the same time, Germany topped the inflow chart with $85.1 million, followed by Hong Kong with $8.1 million. Investors in Canada, Brazil, and Australia also added modest contributions of $4.1 million, $3.5 million, and $2.1 million, respectively.

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The Bitcoin market has shown signs of an increase in sales pressure, and recent price actions suggest a deeper distribution stage under the surface.

The Wyckoff pattern reveals an imminent failure

In a post on social media platform X on August 2, Crypto analyst Joao Wedson explained how Bitcoin prices risk recession over the coming months. Analysts build on their conclusions based on the Wyckoff Distribution model, a technical analytics framework that explains how smart money sells assets at the top of the market cycle.

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Wedson highlighted in the article that the 13-stage schematics are unfolded in real time. This shows that even if retailers maintain their hopes, institutional investors (known as “smart money”) are preparing to leave the market.

Analysts began breaking down at a reserve supply (PSY) phase where there were subtle signs of facility sales and a purchase climax where prices peaked due to exhausting demand. This phase is then followed by an automatic response (AR), which defines the bottom of the distribution range with a sharp drop in the price of Bitcoin.

The fourth and fifth phases are quadratic tests (ST), where the price retests highs in the distribution range, but weak momentum and volume. Once the pattern matures, the price enters phase B with lateral movements, causing disruption to retail participants as the facility quietly offloads the coin.

The most unanswered signs are shown in phases C and D. Here we first show signs of weakness (SOW). This is a major signal of decline in demand. Then there is the final point of supply (LPSY). This usually creates a suitable set up for shorts.

Finally, still within phases C and D, ice breaks lead to deeper drops, followed by a second LPSY trap, sealing the distribution.

Is Altcoin Rally ongoing?

Going further, Wesson noted that market makers were spinning into altcoins. According to analysts, Altcoins have already ended its accumulation zone and are positioned for structural markup, reflecting growing interest in the Altcoin market.

By contrast, Bitcoin has entered the weekly distribution phase. This can be reflected in the short term as weak or modest performance. Wedson added that by the end of 2025, there will be a full spin from BTC to Altcoins, and finally added to Fiat.

At the time of writing, Bitcoin is rated at around $113,439, not reflecting any significant movements over the past 24 hours.

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A crypto strategist thinks that altcoins are about to upstage Bitcoin (BTC) after years of languishing in the background.

Analyst Michaël van de Poppe tells his 789,100 followers on the social media platform X that he thinks the period of altcoin underperformance against Bitcoin is almost over based on the Bitcoin Dominance (BTC.D) chart.

The BTC.D chart tracks how much of the crypto market cap belongs to BTC. A bearish BTC.D indicates that altcoins are outperforming Bitcoin.

According to Van de Poppe, altcoins are now poised to outpace Bitcoin as the BTC.D chart is flashing a bearish reversal signal on the weekly chart.

“The end of the bear market (yes, a bear market on altcoins underperforming Bitcoin) is still here.

Strong bearish divergence on the Bitcoin dominance, implying we’re about to reverse and altcoins about to shine.

Nothing has changed.” 

At time of writing, BTC.D is hovering at 63.89%.

Looking at Bitcoin, the trader thinks BTC will retest a key psychological area as support before rallying to fresh record-high levels.

“I’m monitoring the current price action and I won’t be surprised if we’re seeing a slight correction happening on Bitcoin.

Probably macro-driven or whatever reason, but I wouldn’t be surprised to build some more stamina before we continue the rally to $120,000-$130,000.” 

At time of writing, Bitcoin is worth $109,112.

As for Ethereum (ETH), the analyst says a correction toward the $2,000 price level would present a solid opportunity for long-term investors.

“Similarly, I think it’s vital that, if ETH drops beneath $2,400, that will give a tremendous opportunity.

Ethereum rallied from $1,800 to $2,700 in a few days. If there’s a 10-20% correction, pretty normal, great opportunity to get yourself positioned into it.”

At time of writing, ETH is worth $2,663.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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