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Bitcoin Outflows Contrast with Solana, Cardano, and XRP Inflows: Altcoin Season Loading?

Last Updated September 20, 2023 9:21 AM
James Morales
Last Updated September 20, 2023 9:21 AM
Key Takeaways
  • Outflows from Bitcoin Exchange-Traded Products have outpaced other cryptocurrencies.
  • In contrast, Solana, Cardano and XRP have registered net inflows.
  • Among top 50 tokens, Bitcoin now sits firmly in the middle of the performance table when considering its price change over 90 days.

Throughout 2023, Bitcoin has outperformed most major altcoins, having increased in value by 63.23% since the beginning of the year. In contrast, the likes of BNB, DOGE, DOT and MATIC have declined in value during the same period.

However, in the week to September 17, Bitcoin comprised 85% of all outflows from digital asset investment products. Meanwhile, Solana, Cardano and XRP saw positive inflows. Could the trend signal the start of a new altcoin season?

Bitcoin ETP Outflows Surge

After Trading Flat in July, the price of Bitcoin crashed in mid-August. And despite a mild rally in September, BTC is still trading well below its July high of over $31,000.

Weak market performance has translated into reduced demand for Bitcoin-tracking Exchange-Traded Products (ETPs).

To take just one example, ProShares Bitcoin Strategy ETF (BITO ) has seen outflows of $74.36M since the beginning of August, clocking net negative flows in 7 out of the last 9 weeks. 

ProShares Bitcoin Strategy (BITO) ETF outflows
  Net flows to and from ProShares Bitcoin Strategy (BITO) ETP.

Coinshares data  shows that the trend is reflected across all the Bitcoin ETPs it tracks, with net outflows totaling $455M.

Last week alone, $45.2M of investment flowed out of Bitcoin ETPs, which have registered $117.8M in outflows so far this month, the data shows.

When Does Altcoin Season Start?

At the same time as investors have been reducing their exposure to bitcoin, investment in several altcoins has spiked, reflecting their strong price performance compared to BTC.

According to Coinshares , last week, Solana, Cardano and XRP saw inflows of $0.7M, $0.43M and $0.13M respectively.

altcoin season top 50 cryptocurrencies
  Top 50 cryptocurrencies’ price change over 90 days.

Among the top 50 non-stablecoin cryptocurrencies by market capitalization, Bitcoin now sits firmly in the middle of the performance table when considering its price over the last 90 days.

While BTC has lost 6.7% of its value in three months, 24 cryptocurrencies have outperformed it, including 19 that have shown positive price movement, such as SOL, XRP and HBAR.

Blockchain center altcoin index chart
The altcoin index is on the rise.

According to the Blockchain Center’s Altcoin Season Index , altcoin season starts when 75% of the top 50 coins have performed better than Bitcoin over 90 days. 

Significantly, the index has been rising since the beginning of September, and currently sits midway between Bitcoin season and altcoin season, while trending toward the latter.

If altcoins continue to shine while Bitcoin underwhelms, the crucial threshold could soon be breached. At its current rate, the altcoin index will surpass 75% within 3 weeks.

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