Shorts decimated, crypto funds see record outflows amid banking concerns

- The reaction to last week's sudden wave of banking collapses led to a surge of fear across the market, which pushed crypto investors to exit positions en masse in an attempt to avoid a third major contagion event in less than a year.

James Butterfill, head of research at CoinShares, said that this is the largest weekly outflow on record. “Regionally, the negative sentiment was broad, with negative sentiment seen in both North America and Europe,” he said. “While the outflows are the largest on record, they aren’t when expressed as a percentage of total AuM, that record was in May 2019 when US$51m of outflows were seen,” Butterfill wrote. “It highlights just how much total AuM has risen since May 2019 .”

Data provided by Alternative shows that the Crypto Fear & Greed Index briefly plunged back into “Fear” over the weekend but has since climbed back into neutral territory amid the crypto rally on Monday.As markets plunged into fear, traders used the opportunity to open short positions with the expectation that matters would continue to deteriorate over the weekend and into Monday as the banking contagion spread and investors exited the market.

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