Popular crypto analyst Ali Martinez found that crypto market inflows have dropped to more than 56% in the past month, indicating investments in crypto have slowed down.

According to a recent X post by top crypto analyst Ali Martinez, capital inflows dropped from $134 billion to just $38 billion over the past month.

Alongside his findings, Martinez shared a chart showcasing the aggregated realized value net position change within the crypto market. The sharp drop in inflows was particularly evident around mid-December 2024 to early January 2025 after a particularly bullish November.

“This points to a significant reduction in investment activity,” he wrote.

The decline of inflows into the crypto market could suggest investors are less eager to invest in digital assets, compared to earlier months. This could very well lead to a consolidation phase, also known as the ‘cooling off’ period where prices tend to drop. According to Martinez’ chart, major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have a habit of following the movements of capital inflow.

Despite the drop in inflows into the crypto market, the stablecoin net position remains steady, which could indicate that some investors feel more confident placing their funds into stablecoins instead of non-backed currencies.

However, this could mean that investors are simply waiting for the right opportunity to re-enter the market. Traders may see a rebound in crypto investments coming sooner than they think.

According to data from the latest CoinShares report, the market saw $585 million pouring into digital asset products within the first three days of 2025. However, the last two days of trading in 2024 saw net outflows amounting to $75 million.

Despite investment activity dropping by the year’s end, CoinShares research chief James Butterfill said that 2024 year-long inflows into digital asset products hit a record of almost four times higher than the previous record set in 2021.