Recent data shows a positive turn in digital asset inflows into cryptocurrency investment products after a period of net outflows. In the past week, there were net inflows of $862 million, a significant shift from the net outflows of $931 million reported the previous week.

Despite this recovery in overall digital asset inflows, there is a noticeable decline in the activity surrounding spot Bitcoin exchange-traded funds (ETFs). Daily trading volume for ETFs has decreased to $5.4 billion, marking a 36% drop from its peak of $9.5 billion observed in early March.

Bitcoin remains a dominant force in digital asset flows, with $863 million in inflows. This surge is partly attributed to the demand for spot BTC ETFs, which recorded $1.8 billion in inflows. In contrast, Grayscale saw $965 million in outflows during the same period.

Grayscale's Bitcoin Trust (GBTC) continues to experience significant outflows, even months after the launch of 11 spot Bitcoin ETFs in the United States. This persistent outflow from GBTC has exerted downward pressure on the price of Bitcoin in recent weeks.

Despite expectations that outflows from GBTC would eventually slow down, current investor behavior suggests otherwise. GBTC outflows have remained prominent, influencing ETF flows for the past three weeks and impacting Bitcoin's price performance.

The recent decline in Bitcoin's price, dropping by $4,000 in the past 24 hours and hovering around $66,000, is attributed to selling pressure from ETFs. Some market analysts view this as a routine correction preceding the Bitcoin halving event scheduled for April 20.

Market sentiment in the crypto space has turned bearish, evident from the significant liquidations totaling nearly $500 million and increased activity in the options market, particularly heavy put calls, signaling a pessimistic outlook among traders.

In addition to Bitcoin, Ethereum also experienced its fourth consecutive week of outflows, totaling $19 million. Meanwhile, the altcoin market saw a net inflow of $18.3 million last week, with Solana leading the pack with $6.1 million in inflows.

Regionally, the United States recorded the largest outflow of $897 million, while Europe and Canada collectively witnessed $49 million in outflows. These regional trends further highlight the shifting dynamics of digital asset flows and investor preferences.