Amid the cryptocurrency market correction, institutional investors in the Asia-Pacific region are assessing the situation with increasing caution. As the analytics platform XWIN Japan notes, citing a report by the Singapore-based company Amber Group, the key theme has become the "higher for longer" principle.

Amber Group is a Singapore-based digital asset group that provides institutional trading, market making and asset management in the Asia-Pacific region (APAC). Its latest report helps to understand how the region's major players view the current market.

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Why the market went into correction

According to Amber Group, stronger-than-expected US employment data lowered hopes for a quick rate cut by the Federal Reserve (Fed). This pushed up government bond yields and the dollar index.

In response, investors cut their exposure to risk assets, and Bitcoin (BTC) briefly approached $60,000. The market as a whole moved away from risk — a typical reaction to tighter monetary policy.

Institutional demand is also weakening. Spot Bitcoin ETFs, which supported the market in the first half of the year, are for the first time recording net outflows. The market's former support is gradually weakening.

A shift of liquidity toward Asia

At the same time, XWIN's on-chain analysis points to another trend. The trading volume of the stablecoin USDT during Asian trading hours is steadily growing: it now matches the levels of the US session, and at times even exceeds them.

If in 2020 the liquidity of crypto trading was set mainly by the US, then now, according to analysts, the center of gravity is gradually shifting to Asia. The market's influence may increasingly pass to the APAC region.

Source: BeInCrypto