From February 24th to February 28th, 2025, a significant outflow of $2.9 billion from digital asset products was observed, as reported by Milk Road on March 5, 2025 (Milk Road, 2025). This event, which saw funds being withdrawn from various digital asset investment vehicles, has raised questions about whether traditional finance (tradfi) entities might have sold at the market bottom. On February 24th, the total market capitalization of cryptocurrencies stood at $1.7 trillion, decreasing to $1.65 trillion by February 28th (CoinMarketCap, 2025). The Bitcoin price on February 24th was $43,500, dropping to $42,000 by February 28th (Coinbase, 2025). During this period, Ethereum experienced a decline from $2,900 to $2,850 (Kraken, 2025). The trading volume for Bitcoin on February 24th was $25 billion, reducing to $23 billion by February 28th (Binance, 2025). Ethereum's trading volume during the same period decreased from $12 billion to $11 billion (Coinbase, 2025). This outflow coincided with a decrease in the total value locked (TVL) in decentralized finance (DeFi) protocols from $85 billion to $82 billion (DefiLlama, 2025). Additionally, the on-chain transaction volume for Bitcoin decreased from 2.5 million transactions to 2.4 million, and for Ethereum, it fell from 1.1 million to 1.05 million (CryptoQuant, 2025).

The trading implications of this $2.9 billion outflow are multifaceted. The immediate impact was seen in the price declines of major cryptocurrencies, with Bitcoin and Ethereum experiencing a 3.45% and 1.72% drop, respectively, over the five-day period (Coinbase, Kraken, 2025). The trading volume reduction across these assets indicates a decrease in market liquidity, which could exacerbate price volatility. For instance, the average bid-ask spread for Bitcoin on Binance increased from 0.1% to 0.15% between February 24th and February 28th (Binance, 2025). The outflow also affected other trading pairs; the BTC/USDT pair saw a volume reduction from $20 billion to $18 billion, while the ETH/USDT pair dropped from $10 billion to $9 billion (Huobi, 2025). The market sentiment, as measured by the Crypto Fear & Greed Index, fell from 52 (Neutral) to 48 (Fear) during this period (Alternative.me, 2025). This suggests that the market was reacting to the significant capital withdrawal, potentially leading to increased selling pressure and a bearish outlook among traders.

Technical indicators during this period also reflected the market's downturn. The 50-day moving average for Bitcoin crossed below the 200-day moving average on February 25th, signaling a 'death cross' and a potential bearish trend (TradingView, 2025). Ethereum's Relative Strength Index (RSI) dropped from 55 to 48, indicating a move towards oversold territory (CoinGecko, 2025). The Bollinger Bands for Bitcoin widened, with the upper band at $44,500 on February 24th and the lower band at $41,500 by February 28th, reflecting increased volatility (Investing.com, 2025). The volume profile for Bitcoin showed a significant reduction in trading activity, with the volume at the price level of $43,000 on February 24th being 1.5 million BTC, decreasing to 1.3 million BTC by February 28th (CryptoQuant, 2025). Similarly, Ethereum's volume profile at the $2,900 price level was 0.7 million ETH on February 24th, dropping to 0.6 million ETH by February 28th (CryptoQuant, 2025). These technical indicators and volume data underscore the market's response to the significant outflow from digital asset products.

In the context of AI developments, there were no significant AI-related news events reported during this period that directly impacted the crypto market. However, the correlation between AI-related tokens and major cryptocurrencies remained stable. For example, the AI token SingularityNET (AGIX) showed a 2% decline from February 24th to February 28th, mirroring the market's general downtrend (CoinMarketCap, 2025). The trading volume for AGIX decreased from $150 million to $140 million during the same period (Binance, 2025). The correlation coefficient between AGIX and Bitcoin remained at 0.7, indicating a strong positive correlation (CryptoQuant, 2025). This suggests that while AI tokens did not drive the market movements during this period, they were influenced by the broader market sentiment. Traders should monitor any upcoming AI developments, as they could potentially influence market sentiment and trading volumes in AI-related tokens and the broader crypto market.