$635M in, $405M out – How the Fed quietly shook the crypto market

The crypto market slowed down last week. And, while many blamed global tensions in the Middle East, the real reason behind the same might have been the U.S. Federal Reserve.

According to a report from CoinShares, digital asset investment products saw $230 million in inflows. However, this figure was much lower than the ones seen in previous weeks.

Looking closer, most of the money came in before the Fed’s meeting, with $635 million added in just two days. After the Fed signaled a more cautious approach, about $405 million quickly left the market.

This suggested that investors may be reacting more to interest rate expectations than global conflicts, adjusting their positions based on future monetary policy.

While total inflows of $230 million hinted at a recovering market, the data showed that investor sentiment is still mixed.

Analysis of different coins and their performance over the past week

Bitcoin [BTC] is still leading the market, bringing in about $219 million in weekly inflows. However, the overall picture revealed that investors are unsure about what comes next.

Interestingly, short-Bitcoin products also saw $6 million in inflows, which means some investors are betting on a price drop while others are buying the dip.

At the same time, Chainlink [LINK] and Hyperliquid [HYPE] have been gaining attention, bringing in a combined $9.1 million. 

Notably, Solana [SOL] has been strong, bringing in $17 million and extending its inflow streak to seven weeks. Ethereum [ETH], however, saw $27.5 million in outflows. 

Overall, this suggsted that the investors are being cautious after the recent signals from the FOMC.

Price action and more

These figures come on the back of most cryptocurrencies falling on the charts over the past week. ETH and HYPE were hit the hardest, both falling by around 6.69%.

LINK also dropped by about 5.21% over the past week. BTC performed a bit better, with a smaller decline of 3.97%. Meanwhile, SOL exhibited the most strength, slipping only 2.03% over the same period.

However, even though prices were falling, money was still flowing into the market.

In fact, Santiment’s 7-day active addresses suggested that Chainlink was leading in terms of user activity. All while Ethereum and Bitcoin showed more moderate and stable usage patterns.

Additionally, the social volume data suggested that Solana has maintained a steady and strong presence in discussions over time.

On the contrary, while Hyperliquid has seen short bursts of attention, it has struggled to sustain any consistent momentum.

Is altcoin season around the corner? 

All this has also pushed analysts to think that the altcoin season is imminent.

For its part though, the Altcoin Season Index, with a press time reading of 47, needs to reach 75 to confirm a full altcoin season. 

Hence, if inflows from regions like the U.S and Europe continue, this phase could be the final buildup before a broader altcoin rally begins.

Final Summary

• Institutional behavior hinted at a “buy the dip” mindset, rather than panic selling.
• Gap between price action and capital inflows alluded to hidden strength beneath short-term market weakness.