Crypto Retail Investors Drop to 24% of Volume, Indicator Still Showing ‘Extreme Fear’

Retail investors are deserting the crypto market, with just over three-quarters of Q1 2022 trading volume at Coinbase coming from institutional investors, according to the exchange’s most recent letter to shareholders.

Support for BTC, ETH Holds Up Amid Terra Bloodbath

In spite of the past week’s crypto market downturn precipitated by the collapse of Terra’s $LUNA and its UST stablecoin, institutional investors are banking on the flagship cryptocurrency Bitcoin (BTC) and Ethereum rival Solana (SOL).

According to CoinShares, BTC investment products saw US$45 million in inflows over seven days as assets under management fell to levels “seen during the lows in sentiment at the beginning of the year”.

Negative sentiment towards Ethereum contributed to outflows of US$12.5 million in the same period, bringing ETH outflows year-to-date to US$207 million, or 0.8 percent of assets under management.

Solana’s SOL the Sole Altcoin with ‘Substantial Inflows’

Last week, Ethereum rival Solana’s SOL was the “sole altcoin to see any substantial inflows”, totalling US$1.9 million.

With the price of bitcoin having shrunk more than one-third and the overall crypto market cap down by 38 percent, falling prices have led to unrealised losses for at least 40 percent of bitcoin investors.

Flying in the face of market gloom, the richest bitcoin whale splurged US$90 million on BTC in less than a month. Last week, blockchain intelligence platform IntoTheBlock disclosed that bitcoin whales collectively added to their holdings amid the crypto sell-off, with just over 50 percent of BTC holders still in profit.

Little over a month ago, US$250 billion was wiped from crypto’s market cap amid a welter of leveraged liquidations and general fear and uncertainty. After the storm comes the correction, as witnessed seven months ago when a US$840 million liquidity flush drained nearly US$400 billion from the market.