- BSOL records first-ever $4.6M outflow since October launch amid crypto market fear.
- SOL price drops 6% to $124 as institutional investors panic over potential crash.
Bitwise Solana Staking ETF (BSOL) saw the first instance of a capital withdrawal since its debut. This is a notable shift in sentiment among institutional investors in a generally uncertain cryptocurrency market environment. The information released by Farside Investors data indicates that on December 16, BSOL experienced outflows of $4.6 million, thereby interrupting the fund’s record of continuous positive flows.
The pullback went along with deteriorating SOL prices that fell by more than 6% to hit $124 at the end of Tuesday’s session. This news reveals a concern among institutional investors of a worsening market scenario ahead.
Trading activity in BSOL dropped to record lows, as only about 36,860 SOL tokens were exchanged throughout the entire day. The decrease in volume mirrors investors’ safety-seeking behaviour under the given circumstances.
Institutional Fears Drive Market Pressure
Market participants have been blaming the sudden exodus of funds mainly to the anxiety of possible monetary policy changes expressed most strongly through the anticipated Bank of Japan interest rate decision scheduled for later this week. The timing of the move suggests that these institutions are rearranging their portfolios in anticipation of the possible macroeconomic changes that could have an impact on the valuations of digital assets.
While BSOL has been struggling, in general, Solana ETF products have been able to attract $35.2 million of net inflows, with the main contributor being Fidelity’s FSOL, which recorded its largest single-day intake of $38.7 million.
Solana’s price went down to trade around $126, thereby establishing a 24-hour range between $124 and $134.72 with bearish sentiment dominating the short-term price action. The trading volume increased by 73% as some buyers, trying to take advantage of the lowered price levels following the announcement about CME’s upcoming Solana futures, decided to buy in.
The derivatives market has been in a very bad shape as the total futures open interest has decreased by 2% to $7.09 billion within a four-hour window, thus showing that the majority of the traders have closed their positions.
From a technical point of view, Solana is still caught between resistance at $145 and support near $124, and if there is more downward movement, it may cause significant liquidation cascades. Some market participants are suggesting that with the holiday season coming, trading volumes and liquidity might get further depressed in the cryptocurrency markets over the next few weeks.
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Source: https://thenewscrypto.com/bitwise-solana-etf-sees-first-withdrawal-amid-market-turbulence/
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