The strong optimism that lifted crypto markets at the start of 2026 has now faded. A recent report indicates that this trend is deteriorating. Digital asset investment products have seen money flow out for four weeks in a row. In just the last week, a staggering $173 million was pulled out by investors. In the past month, total outflows have hit $3.74 billion, indicating a decline in market confidence. This scenario is not solely the result of small investors in a state of panic. Major institutions are strategically minimizing their exposure to risk. Initially, trading activity has experienced a significant decline, indicating that investors are exercising increased caution. At the beginning of the week, the market experienced significant inflows totaling $575 million; however, this swiftly transitioned into a substantial outflow of $853 million as prices declined. A better-than-expected inflation report later in the week sparked a brief relief rally of $105 million, yet it failed to alter the overarching trend. A significant red flag was the decline in trading volume.
Last week, trading in crypto investment products saw a significant decline, falling to $27 billion from $63 billion the previous week. This indicates that a smaller number of individuals are engaged in active trading. Secondly, a distinct divergence was observed in the behavior of investors in the US compared to those in other regions. Last week, the United States spearheaded the market’s decline, witnessing an outflow of $403 million in just seven days. In contrast, other countries continued to invest in crypto. Germany has contributed $115 million, while Canada has added $46.3 million, and Switzerland has put in $36.8 million. In total, markets beyond the US generated $230 million. This indicates that, amid economic uncertainty, American investors were pulling back on risk, whereas numerous European and Canadian investors viewed the current prices as an opportune moment to make purchases.
Finally, Bitcoin encountered significant selling pressure, whereas certain altcoins are demonstrating more resilience. Bitcoin experienced $133 million in outflows and was trading around $68,939 following a 1.79% decline over the last 24 hours. Ethereum encountered significant selling pressure, with outflows totaling US$85.1 million, as it traded around $1,977 following a nearly 4% decline. Simultaneously, several altcoins were demonstrating resilience. Ripple saw an impressive $33.4 million in inflows, despite its price dipping to $1.48. Solana attracted $31 million in fresh investments while trading around $85.56. Chainlink experienced minor inflows and was trading sluggishly at approximately $8.78. This indicates that despite the pressure on major cryptocurrencies, certain smaller projects continue to capture the attention of investors. As the crypto market navigates this mid-February slowdown, a distinct disparity emerges between online discourse and the actual data being presented. On social media platforms such as X, numerous traders are buzzing about an impending “altcoin season.”
However, the data reveals an alternative narrative. The CoinMarketCap Altcoin Season Index stands at 31 out of 100 at this moment. The market remains in what is referred to as “Bitcoin season.” The market is holding steady; it’s not in a state of collapse, yet it’s also not positioned for a breakout just yet. At this moment, it seems to be a time of anticipation. The forthcoming significant shift, whether spearheaded by Bitcoin or altcoins, is expected to hinge on major economic developments that are yet to unfold.