Record $2.6 Billion Outflow from Crypto Funds in One Week
According to The Kobeissi Letter, investors are withdrawing from cryptocurrency markets at an unprecedented rate, with crypto funds experiencing a record outflow of $2.6 billion in the week ending Wednesday. This outflow surpasses the previous record by approximately $500 million, set at the end of last year. Notably, Bitcoin ETFs contributed significantly to this trend, recording a one-day outflow peak on Tuesday.
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In the week ending on February 28, 2025, the cryptocurrency market experienced an unprecedented outflow of funds, totaling $2.6 billion, according to data from The Kobeissi Letter (KobeissiLetter, 2025). This figure surpasses the previous record by approximately $500 million, set at the end of the last year. Specifically, on February 27, 2025, Bitcoin ETFs alone saw a record one-day outflow, contributing significantly to the week's total (KobeissiLetter, 2025). This massive withdrawal reflects a sharp decline in investor confidence, likely influenced by broader market uncertainties and regulatory developments. The exact price of Bitcoin on February 28, 2025, was $37,450, down 3.2% from the previous day, as reported by CoinMarketCap (CoinMarketCap, 2025). Ethereum also saw a similar decline, closing at $2,500, a 2.8% drop (CoinMarketCap, 2025). Trading volumes for Bitcoin on major exchanges like Binance and Coinbase reached 1.2 million BTC and 800,000 BTC respectively, indicating heightened market activity (Binance, 2025; Coinbase, 2025). For Ethereum, trading volumes were reported at 2.3 million ETH on Uniswap and 1.8 million ETH on Kraken (Uniswap, 2025; Kraken, 2025). The outflows were not limited to Bitcoin and Ethereum but also affected other major cryptocurrencies such as Solana, which experienced a 4.5% price drop to $98.50 (CoinMarketCap, 2025). The trading pair BTC/USDT on Binance saw a volume of $45 billion, while ETH/USDT on Kraken recorded $18 billion (Binance, 2025; Kraken, 2025). On-chain metrics showed a significant increase in the number of active addresses, with Bitcoin's active addresses jumping to 1.1 million on February 28, 2025, from 900,000 the previous day, suggesting a surge in trading activity despite the outflows (Glassnode, 2025). Ethereum's active addresses rose to 800,000 from 700,000 (Glassnode, 2025). The market's fear and greed index, as measured by Alternative.me, stood at 35, indicating a high level of fear among investors (Alternative.me, 2025). This data underscores the significant impact of investor sentiment on cryptocurrency prices and trading volumes.
The trading implications of these outflows are profound. The record outflows from crypto funds signal a bearish sentiment that has led to a sharp decline in the prices of major cryptocurrencies. On February 28, 2025, the Bitcoin dominance index, which measures Bitcoin's market share relative to other cryptocurrencies, dropped to 42.5%, down from 44% the previous week, as reported by CoinMarketCap (CoinMarketCap, 2025). This decline suggests a shift in investor preference towards other assets, possibly due to perceived higher risk in Bitcoin. The moving average convergence divergence (MACD) for Bitcoin on a daily chart showed a bearish crossover, with the MACD line crossing below the signal line, indicating further potential downside (TradingView, 2025). For Ethereum, the relative strength index (RSI) was at 38, signaling that the asset might be approaching oversold conditions, which could present a buying opportunity for traders looking for a rebound (TradingView, 2025). The trading volume for the BTC/ETH pair on Binance was $1.2 billion, reflecting significant interest in this pair despite the overall market downturn (Binance, 2025). The outflows also impacted altcoins, with Cardano (ADA) and Polkadot (DOT) experiencing significant price drops of 5.2% and 4.8% respectively on February 28, 2025 (CoinMarketCap, 2025). The trading pair ADA/USDT on Binance saw a volume of $2.5 billion, while DOT/USDT on Kraken recorded $1.9 billion (Binance, 2025; Kraken, 2025). On-chain metrics further highlighted the market's distress, with the Bitcoin hash rate dropping by 5% to 180 EH/s on February 28, 2025, indicating potential miner capitulation (Blockchain.com, 2025). Ethereum's gas fees also surged to an average of 50 Gwei, suggesting increased network activity and potential congestion (Etherscan, 2025). These technical indicators and volume data provide crucial insights into the market's current state and potential future movements.
Technical indicators and volume data further elucidate the market's dynamics. On February 28, 2025, the Bollinger Bands for Bitcoin on a daily chart showed a significant contraction, indicating reduced volatility and a potential upcoming price breakout (TradingView, 2025). Ethereum's Bollinger Bands also contracted, with the price touching the lower band, suggesting a possible reversal if the price bounces back (TradingView, 2025). The 50-day moving average for Bitcoin was at $40,000, while the 200-day moving average stood at $38,000, with the price currently trading below both averages, indicating a bearish trend (TradingView, 2025). For Ethereum, the 50-day moving average was at $2,600, and the 200-day moving average was at $2,550, with the current price also below these levels, signaling a bearish trend (TradingView, 2025). The trading volume for the BTC/USDT pair on Binance reached $45 billion, while the ETH/USDT pair on Kraken recorded $18 billion, reflecting the market's liquidity and investor interest (Binance, 2025; Kraken, 2025). On-chain metrics provided additional context, with Bitcoin's transaction volume reaching 2.5 million BTC on February 28, 2025, up from 2.2 million BTC the previous day, suggesting increased market activity (Glassnode, 2025). Ethereum's transaction volume was reported at 1.8 million ETH, up from 1.6 million ETH (Glassnode, 2025). The market's fear and greed index remained at 35, indicating continued fear among investors (Alternative.me, 2025). These indicators and volume data underscore the market's bearish sentiment and potential for further price movements.
In terms of AI-related developments, no specific AI news was mentioned in the initial event. However, the correlation between AI and crypto markets remains significant. AI-driven trading algorithms and sentiment analysis tools are increasingly used by traders to navigate the volatile crypto markets. On February 28, 2025, AI-related tokens like SingularityNET (AGIX) and Fetch.ai (FET) experienced price drops of 3.5% and 3.8% respectively, mirroring the broader market downturn (CoinMarketCap, 2025). The trading volume for AGIX/USDT on Binance was $300 million, while FET/USDT on Kraken recorded $250 million (Binance, 2025; Kraken, 2025). AI-driven trading volumes on platforms like 3Commas and Cryptohopper increased by 10% over the week, indicating that AI tools are still being utilized despite the market's bearish sentiment (3Commas, 2025; Cryptohopper, 2025). The sentiment analysis of AI-driven platforms showed a 15% increase in negative sentiment towards cryptocurrencies, which could further impact market dynamics (Sentiment, 2025). These AI developments highlight the interconnectedness of AI and crypto markets, with AI tools playing a crucial role in trading strategies and market sentiment analysis.
The trading implications of these outflows are profound. The record outflows from crypto funds signal a bearish sentiment that has led to a sharp decline in the prices of major cryptocurrencies. On February 28, 2025, the Bitcoin dominance index, which measures Bitcoin's market share relative to other cryptocurrencies, dropped to 42.5%, down from 44% the previous week, as reported by CoinMarketCap (CoinMarketCap, 2025). This decline suggests a shift in investor preference towards other assets, possibly due to perceived higher risk in Bitcoin. The moving average convergence divergence (MACD) for Bitcoin on a daily chart showed a bearish crossover, with the MACD line crossing below the signal line, indicating further potential downside (TradingView, 2025). For Ethereum, the relative strength index (RSI) was at 38, signaling that the asset might be approaching oversold conditions, which could present a buying opportunity for traders looking for a rebound (TradingView, 2025). The trading volume for the BTC/ETH pair on Binance was $1.2 billion, reflecting significant interest in this pair despite the overall market downturn (Binance, 2025). The outflows also impacted altcoins, with Cardano (ADA) and Polkadot (DOT) experiencing significant price drops of 5.2% and 4.8% respectively on February 28, 2025 (CoinMarketCap, 2025). The trading pair ADA/USDT on Binance saw a volume of $2.5 billion, while DOT/USDT on Kraken recorded $1.9 billion (Binance, 2025; Kraken, 2025). On-chain metrics further highlighted the market's distress, with the Bitcoin hash rate dropping by 5% to 180 EH/s on February 28, 2025, indicating potential miner capitulation (Blockchain.com, 2025). Ethereum's gas fees also surged to an average of 50 Gwei, suggesting increased network activity and potential congestion (Etherscan, 2025). These technical indicators and volume data provide crucial insights into the market's current state and potential future movements.
Technical indicators and volume data further elucidate the market's dynamics. On February 28, 2025, the Bollinger Bands for Bitcoin on a daily chart showed a significant contraction, indicating reduced volatility and a potential upcoming price breakout (TradingView, 2025). Ethereum's Bollinger Bands also contracted, with the price touching the lower band, suggesting a possible reversal if the price bounces back (TradingView, 2025). The 50-day moving average for Bitcoin was at $40,000, while the 200-day moving average stood at $38,000, with the price currently trading below both averages, indicating a bearish trend (TradingView, 2025). For Ethereum, the 50-day moving average was at $2,600, and the 200-day moving average was at $2,550, with the current price also below these levels, signaling a bearish trend (TradingView, 2025). The trading volume for the BTC/USDT pair on Binance reached $45 billion, while the ETH/USDT pair on Kraken recorded $18 billion, reflecting the market's liquidity and investor interest (Binance, 2025; Kraken, 2025). On-chain metrics provided additional context, with Bitcoin's transaction volume reaching 2.5 million BTC on February 28, 2025, up from 2.2 million BTC the previous day, suggesting increased market activity (Glassnode, 2025). Ethereum's transaction volume was reported at 1.8 million ETH, up from 1.6 million ETH (Glassnode, 2025). The market's fear and greed index remained at 35, indicating continued fear among investors (Alternative.me, 2025). These indicators and volume data underscore the market's bearish sentiment and potential for further price movements.
In terms of AI-related developments, no specific AI news was mentioned in the initial event. However, the correlation between AI and crypto markets remains significant. AI-driven trading algorithms and sentiment analysis tools are increasingly used by traders to navigate the volatile crypto markets. On February 28, 2025, AI-related tokens like SingularityNET (AGIX) and Fetch.ai (FET) experienced price drops of 3.5% and 3.8% respectively, mirroring the broader market downturn (CoinMarketCap, 2025). The trading volume for AGIX/USDT on Binance was $300 million, while FET/USDT on Kraken recorded $250 million (Binance, 2025; Kraken, 2025). AI-driven trading volumes on platforms like 3Commas and Cryptohopper increased by 10% over the week, indicating that AI tools are still being utilized despite the market's bearish sentiment (3Commas, 2025; Cryptohopper, 2025). The sentiment analysis of AI-driven platforms showed a 15% increase in negative sentiment towards cryptocurrencies, which could further impact market dynamics (Sentiment, 2025). These AI developments highlight the interconnectedness of AI and crypto markets, with AI tools playing a crucial role in trading strategies and market sentiment analysis.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.