Bitcoin ETF funds are flowing out, so why are altcoins rising?

▲ Bitcoin, Cryptocurrency ©

As the cryptocurrency market loses direction and continues to trade sideways, funds appear to be rapidly rotating into AI and mid-cap altcoins. Near Protocol (NEAR), Toncoin (TON), and The Graph (GRT) are leading the bullish trend, creating an 'altcoin rotation market' where market leaders change daily.

According to investment media FXStreet on May 26 (local time), the total cryptocurrency market capitalization continues to stagnate at approximately $2.57 trillion. The market is searching for further direction near the 50-day moving average, with a continued rotation focused on mid-cap altcoins without a clear trend. In the last 24 hours, Near Protocol surged 14%, The Graph rose 5.6%, and Toncoin gained 4.5%. Conversely, Zcash (ZEC) fell 5.9%, Dash (DASH) dropped 4.1%, and Uniswap (UNI) declined 3.1%, showing a bearish trend.

Bitcoin (BTC) briefly rebounded to $77,800 the previous day but then fell by about $1,000 in early European trading, trading in the $76,000 range. The current price appears to be finding support near the rising 50-day moving average. The market is particularly noting the possibility of a golden cross forming within weeks as the 50-day and 200-day moving averages intersect. The media analyzed that if this signal materializes, it could be a crucial turning point in determining the direction of Bitcoin and the overall cryptocurrency market.

However, the flows from institutional and retail investors are diverging. In the past two weeks, a total of $1.74 billion has flowed out of US spot Bitcoin ETFs. Conversely, retail investors are expanding their leverage, betting on a potential Bitcoin rebound. CryptoOnchain warned that in the past, the combination of institutional outflows and increased retail leverage has repeatedly triggered large-scale liquidation events.

An analysis also emerged suggesting that a long-term buy perspective for Ethereum (ETH) is valid. Michael van de Poppe, founder of MN Trading, assessed that the current Ethereum price range is suitable for building long-term positions. He emphasized that although Ethereum has underperformed the market recently due to macroeconomic variables, it still serves as a core infrastructure in the on-chain ecosystem.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) approved the listing of Bitcoin index options products, which are calculated based on Bitcoin prices from various exchanges. This marks the first such instance in the U.S. stock market. Additionally, Strategy opted for early repayment of $1.5 billion in convertible bonds last week instead of additional Bitcoin purchases, and Michael Saylor revealed some of the Bitcoin management strategies the company has used over the past five years for the first time.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*