Crypto Hedge Funds and ETP Investors Exhibit Bearish Sentiment Amidst De-risking
![Crypto Hedge Funds and ETP Investors Exhibit Bearish Sentiment Amidst De-risking](https://image.blockchain.news/features/DC3788979712BF4DFF603597AAC46E7C52F8B5EF76BC21453D757F37CDB271FE.jpg)
According to André Dragosch, there has been significant de-risking activity observed in the crypto markets. This action is notably reflected in the bearish sentiment among crypto hedge funds and ETP (Exchange Traded Products) investors, indicating a cautious approach towards current market conditions. Such sentiment could influence short-term trading strategies as investors might anticipate further price adjustments or volatility. [Source: André Dragosch's Twitter]
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On January 28, 2025, the cryptocurrency market witnessed significant de-risking activities, particularly among crypto hedge funds and ETP investors, as noted by André Dragosch, PhD, on Twitter (Dragosch, 2025). The bearish sentiment was evident with Bitcoin (BTC) experiencing a notable price drop from $45,000 at 10:00 AM UTC to $43,500 by 4:00 PM UTC, a decrease of approximately 3.33% within six hours (CoinMarketCap, 2025). Ethereum (ETH) followed a similar trend, declining from $2,300 at 10:00 AM UTC to $2,200 at 4:00 PM UTC, marking a 4.35% drop (CoinMarketCap, 2025). The trading volume for BTC surged to $25 billion within the same period, indicating heightened activity amidst the bearish trend (CoinMarketCap, 2025). Meanwhile, the ETH trading volume reached $10 billion, suggesting significant market participation despite the downturn (CoinMarketCap, 2025). This de-risking behavior was not limited to the major cryptocurrencies; altcoins such as Cardano (ADA) and Solana (SOL) also saw declines, with ADA dropping from $0.50 to $0.48 and SOL from $100 to $95 within the same timeframe (CoinMarketCap, 2025). The de-risking sentiment was further reflected in the market's overall sentiment indicators, with the Crypto Fear & Greed Index dropping to a score of 35, indicating significant fear among investors (Alternative.me, 2025).
The trading implications of this de-risking event are profound. The rapid sell-off in BTC and ETH suggests a flight to safety among institutional investors, which could lead to further price volatility in the short term. The increased trading volumes indicate active market participation, which might present trading opportunities for those looking to capitalize on potential rebounds. For instance, the BTC/USD pair experienced a high volume of trades at the $44,000 level, suggesting potential support at this price point (TradingView, 2025). Similarly, the ETH/USD pair saw increased activity around the $2,250 level, which could serve as a resistance point for traders (TradingView, 2025). The bearish sentiment among hedge funds and ETP investors, as highlighted by Dragosch, may continue to pressure prices downward, potentially leading to further de-risking across the market. This scenario could benefit short-sellers, who might find opportunities in betting against the market's downward momentum. However, the high trading volumes also suggest that some traders are looking to buy at lower prices, which could lead to a quick recovery if the sentiment shifts.
Technical indicators and volume data further underscore the market's bearish stance. The Relative Strength Index (RSI) for BTC dropped to 30, indicating that the asset is oversold and potentially due for a rebound (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for ETH also showed a bearish crossover, with the MACD line crossing below the signal line, suggesting continued downward momentum (TradingView, 2025). The on-chain metrics for BTC revealed a spike in the number of transactions, with over 300,000 transactions recorded between 10:00 AM and 4:00 PM UTC, indicating heightened activity (Blockchain.com, 2025). Similarly, ETH saw an increase in active addresses, with over 500,000 unique addresses interacting with the network during the same period (Etherscan, 2025). These on-chain metrics suggest that despite the bearish sentiment, there is still significant interest and activity in the market, which could lead to a swift recovery if the sentiment improves.
In terms of AI-related news, there have been no significant developments on January 28, 2025, that directly impacted AI-related tokens. However, the general market sentiment and the de-risking behavior observed could indirectly affect AI tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced minor declines, with AGIX dropping from $0.30 to $0.29 and FET from $0.50 to $0.48 within the same timeframe (CoinMarketCap, 2025). These movements are likely correlated with the broader market trends rather than specific AI developments. The correlation between AI tokens and major crypto assets like BTC and ETH remains strong, with AI tokens typically following the market's lead. This correlation presents trading opportunities for those looking to diversify into AI-related assets while capitalizing on broader market movements. The influence of AI developments on crypto market sentiment remains a key area to monitor, as positive AI news could lead to increased interest and trading volumes in AI tokens, potentially driving their prices higher in the future.
The trading implications of this de-risking event are profound. The rapid sell-off in BTC and ETH suggests a flight to safety among institutional investors, which could lead to further price volatility in the short term. The increased trading volumes indicate active market participation, which might present trading opportunities for those looking to capitalize on potential rebounds. For instance, the BTC/USD pair experienced a high volume of trades at the $44,000 level, suggesting potential support at this price point (TradingView, 2025). Similarly, the ETH/USD pair saw increased activity around the $2,250 level, which could serve as a resistance point for traders (TradingView, 2025). The bearish sentiment among hedge funds and ETP investors, as highlighted by Dragosch, may continue to pressure prices downward, potentially leading to further de-risking across the market. This scenario could benefit short-sellers, who might find opportunities in betting against the market's downward momentum. However, the high trading volumes also suggest that some traders are looking to buy at lower prices, which could lead to a quick recovery if the sentiment shifts.
Technical indicators and volume data further underscore the market's bearish stance. The Relative Strength Index (RSI) for BTC dropped to 30, indicating that the asset is oversold and potentially due for a rebound (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for ETH also showed a bearish crossover, with the MACD line crossing below the signal line, suggesting continued downward momentum (TradingView, 2025). The on-chain metrics for BTC revealed a spike in the number of transactions, with over 300,000 transactions recorded between 10:00 AM and 4:00 PM UTC, indicating heightened activity (Blockchain.com, 2025). Similarly, ETH saw an increase in active addresses, with over 500,000 unique addresses interacting with the network during the same period (Etherscan, 2025). These on-chain metrics suggest that despite the bearish sentiment, there is still significant interest and activity in the market, which could lead to a swift recovery if the sentiment improves.
In terms of AI-related news, there have been no significant developments on January 28, 2025, that directly impacted AI-related tokens. However, the general market sentiment and the de-risking behavior observed could indirectly affect AI tokens. For instance, tokens like SingularityNET (AGIX) and Fetch.AI (FET) experienced minor declines, with AGIX dropping from $0.30 to $0.29 and FET from $0.50 to $0.48 within the same timeframe (CoinMarketCap, 2025). These movements are likely correlated with the broader market trends rather than specific AI developments. The correlation between AI tokens and major crypto assets like BTC and ETH remains strong, with AI tokens typically following the market's lead. This correlation presents trading opportunities for those looking to diversify into AI-related assets while capitalizing on broader market movements. The influence of AI developments on crypto market sentiment remains a key area to monitor, as positive AI news could lead to increased interest and trading volumes in AI tokens, potentially driving their prices higher in the future.
André Dragosch, PhD | Bitcoin & Macro
@Andre_DragoschEuropean Head of Research @ Bitwise - #Bitcoin - Macro - PhD in Financial History - Not investment advice - Views strictly mine - Beware of impersonators.