Electronic Money is under pressure as capital flows out strongly from ETF.

The cryptocurrency market continues to face many difficulties as the total capitalization is still struggling to bounce back, currently maintaining at around 3.7 trillion USD.

Analysts warn that the risk of a further decline is very high, as capital outflows are expected to increase significantly in the coming days.

Pressure from liquidity and token unlock events

On-chain liquidity has decreased significantly recently as selling pressure has returned. According to statistics, the amount of liquidity – representing the number of cryptocurrencies locked in decentralized protocols – has dropped by about 7.94 billion USD, after reaching a peak of 157.64 billion USD on October 27.

This capital outflow could be a market adjustment move; however, it also reflects a noticeable weakening of demand across the market.

Source: DeFiLlamaInvestors who remain optimistic may continue to face challenges as token unlocks totaling $310.56 million are expected to add significant supply to the market in the next 14 days. Specifically, in the first two days of November, approximately $51.26 million in cryptocurrency assets will be added to the supply.

This pessimistic mindset has led many investors to choose to exit the market in order to protect their positions against unpredictable fluctuations.

The outflow of capital from institutions and companies betting on cryptocurrency

Institutional capital withdrawal from the market continues to increase in the past two days. According to data from DeFiLlama, the total value of ETF funds related to Bitcoin (BTC) and Ethereum (ETH) has turned negative.

In just two days, on October 29 and 30, the total value of assets withdrawn from the market reached approximately 1.22 billion USD.

Source: DefiLlamaNotably, digital asset funds have also recorded a sharp decline in buying activity. After reaching a weekly high of 6.67 billion USD in the week ending August 11, this figure has plummeted to just 364.98 million USD – the lowest level since July 28. The indifference of these funds is a sign that demand for digital assets is clearly weakening.

Market Outlook: Is There a Change?

The downward pressure on cryptocurrency assets is expected to continue, especially as market sentiment remains dominated by concerns.

The Fear and Greed Index currently reports that the market is in a state of “fear” with a score of 28, and this situation has become even more serious on October 27.

Source: DeFiLlamaIf the market continues to stay in this low price range, the likelihood of demand bouncing back is very low. In the context of expected strong supply increase, the downtrend may continue.

At the current time, indicators of the “altcoin season” show that alternative cryptocurrencies are still in a downward trend, with limited capital inflow – similar to the situation of Bitcoin.

Mr. Teacher