The cryptocurrency market has been impacted by geopolitical tensions between Ukraine and Russia. If not directly, at least indirectly. Bitcoin, along with most other coins, has had a pretty rough week. Almost all of the top 10 crypto assets have lost 10% to 15% of their value in the past week.

Amid the unfavorable environment, digital asset investment products saw inflows worth $109 million last week. Post consecutive outflows observed in December and January, the latest data marks the fifth consecutive week of inflows. When divided geographically, both Europe and America had a say. Highlighting the same, CoinShares’ last weekly report observed,

“While inflows were seen in Europe and the Americas, it was predominantly in the latter, with inflows totaling $101 million.”

BTC, among other assets, recorded the biggest inflows totaling $89 million last week, the biggest since December 2021. However, things didn’t look the same on the macroframe. By CoinShares,

“O [Bitcoin] inflows remain tepid, with the last 5 weeks of inflows totaling $221 million, representing 0.7% of total assets under management (AuM).“

Other altcoins like Solana and Polkadot witnessed small inflows on their part, while Ethereum recorded an outflow worth $15 million.

Not all sunshine and rainbows for Bitcoin though

Positive institutional flows aside, there is a small twist to the fairy tale. And that has to do with network activity and user interest.

The chart attached below presents the number of active entities using the Bitcoin network. Bull markets are often characterized by periods of increasing user demand, often with an increasing number of entities active during each subsequent bullish impulse. On the other hand, bear markets are marked by periods of relatively low network activity and low interest rates.

On the macro-frame, things look intact for Bitcoin. Highlighting the same, Glassnode’s weekly newsletter observed,

“The lower bound of this channel has historically increased in an almost linear fashion, suggesting that the pool’s trusted Bitcoin users (HODLers) are still growing over the long term.”

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Last week, however, the degree of on-chain activity was seen languishing around the lower boundary of the bear market channel, indicating diminished interest and demand for the asset in the short term.

Source: Glassnode

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