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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Bitcoin remains locked in a tight consolidation range between $100,000 and $110,000, as market participants await a decisive catalyst to determine direction. The price action continues to respect the January all-time high of $109,590 as resistance, while drawing consistent support from the Short-Term Holder Realised Price (STH-RP) around $98,220–$99,474. Despite a recent rebound from sub-$100K levels, the broader trend has stalled, and the current market setup reflects a delicate equilibrium: profit-taking pressures have eased, but the lack of sustained momentum suggests buyers are also hesitant. Importantly, the market’s repeated defence of the rising STH-RP underscores continued structural strength. This key on-chain level has historically acted as a pivot for trend continuation, and its resilience in recent weeks indicates that bulls still hold control of the broader structure. The rising cost basis reflects ongoing accumulation, likely by institutional players via ETFs and corporate inflows offering a more durable foundation than in prior cycles. However, the lack of follow-through at the range highs, and recent drawdowns in aggregate open interest and whale holdings, highlight growing caution, particularly among experienced market participants. The US macroeconomic landscape is increasingly marked by signs of strain, with recent data underscoring a labour market losing momentum amid broader economic headwinds. June payrolls showed a headline gain of 147,000 jobs, yet nearly half stemmed from government hiring linked to seasonal factors, while private sector job creation weakened to its slowest pace in eight months. Sectors like manufacturing and wholesale trade shed jobs, and the overall drop in labour force participation masked the rise in long-term unemployment. Wage growth softened, the average workweek shrank, and aggregate hours worked fell, reflecting cautious employer sentiment and hinting at subdued consumer demand ahead. Manufacturing, too, remains under pressure; the ISM PMI stayed below the 50 mark for the fourth consecutive month, with businesses grappling with supply chain bottlenecks and trade uncertainty, further clouding prospects for a recovery. While job openings rose, largely in lower-wage leisure and hospitality roles, hiring lagged, exposing the fragile underpinnings of labor demand. Against this backdrop, the Federal Reserve appears set to hold rates steady in the near term, with markets eyeing potential easing toward year-end. In parallel, the cryptocurrency sector is capturing growing institutional interest, with developments that are in contrast with the tentative macroeconomic mood. The debut of the first Solana staking ETF, SSK, marked a milestone, drawing $33 million in volume on its first day and offering 5–7 percent staking yields, positioning Solana as a credible player in regulated capital markets. Similarly, corporate Bitcoin treasury strategies are accelerating: Spain’s Vanadi Coffee pivoted dramatically from its café business to amass Bitcoin holdings, aiming for €1 billion in BTC exposure, though there is concern about the company’s strategy given its overall financial fragility. Meanwhile, Tokyo-based Metaplanet has intensified its Bitcoin accumulation strategy, now holding a total of 15,555 BTC following its latest purchase of 2,205 BTC,  with ambitions to reach 210,000 BTC by 2027 and solidify its role as Asia’s leading corporate Bitcoin holder. Together, these crypto moves highlight a growing divergence: while traditional markets wrestle with uncertainty, digital assets are increasingly seen as a vehicle for yield, treasury diversification, and inflation hedging — signalling shifting priorities in institutional capital deployment. The post BTC Consolidates as Whales Ease Holdings and New Buyers Step in appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Welcome to the first edition of Bitfinex Alpha 2025. With a recent Bitcoin All-Time High of over $108,000, we see a market that continues to look robust. While a deeper Q1 2025 pullback remains a possibility, the broader tightening of supply and bullish sentiment among miners indicate that Bitcoin is well-positioned for further gains in the medium term. The Liquidity Inventory Ratio, which tracks how long existing supply can meet demand, has plummeted from 41 months in October to just 6.6 months. This indicates a rapid tightening of available Bitcoin liquidity, and has been particularly evident during the strong rallies seen in Q1 and Q4 of 2024.   Bitcoin miners, historically significant sellers during halving years, have also slowed their BTC flows to exchanges since April 2024. Miner-to-exchange flows are at multi-year lows, as miners operate with strong unrealized profits, and hold their BTC rather than sell.   The overall selling pressure across miners, long-term holders, and other cohorts has eased significantly. The reduction in supply entering the market has tempered the impact of the recent correction.  The US economy closed 2024 with continued evidence of economic resilience, however, this is also mixed with some lingering uncertainty across some key sectors. The labour market remained robust, as jobless claims fell to an eight-month low of 211,000 in late December, defying expectations and reinforcing confidence in the economy’s strength. This unexpected decline, coupled with a drop in continuing claims, suggests that the labour market is cooling at a measured pace without signalling a broader downturn. The positive labour data bolstered market sentiment, strengthening the dollar and prompting modest gains on Wall Street. In contrast, however, the construction sector presented a more subdued picture, with spending stagnating in November after modest growth in October. Gains in single-family homebuilding were offset by declines in multi-family housing and public investment. Elevated mortgage rates, driven by market anticipation of fiscal policy changes under the incoming administration, are weighing on housing demand and new projects. The construction sector faces additional headwinds, including potential tariffs, labour shortages, and trade uncertainties, which could hinder sustained growth despite possible boosts from future infrastructure spending. Meanwhile, the manufacturing sector showed signs of recovery but remained under pressure. The Purchasing Managers Index (PMI) rose to 49.3 in December, its highest level since March, yet still below the growth threshold of 50. Although production and new orders improved, manufacturing has struggled to fully rebound from a prolonged contraction exacerbated by higher borrowing costs from earlier Federal Reserve rate hikes. Recent rate cuts and the prospect of fiscal stimulus under the incoming administration offer a glimmer of hope, but concerns over trade policies and fluctuating global demand continue to cloud the sector’s outlook. In cryptocurrency news last week: US Congressman Mike Collins disclosed investments in the cryptocurrency Ski Mask Dog (SKI), with purchases totalling between $1,001 and $15,000. His filing, one of the first for 2025, underscores the growing intersection of digital assets and politics, raising questions about transparency and regulatory oversight. Meanwhile, the defunct crypto exchange FTX has initiated its reorganisation plan to repay former users affected by its 2022 collapse. Customers who filed claims can expect repayments within 60 days, with smaller claims receiving priority. MicroStrategy has also announced plans to raise up to $2 billion through perpetual preferred stock offerings. This initiative is part of its ambitious “21/21 Plan” to secure $42 billion over three years for Bitcoin acquisitions. Already the largest corporate holder of Bitcoin, with over 145,000 BTC, the company continues to solidify its position in the digital asset market.  Have a great trading week! The post Bitfinex Alpha | BTC Sell-Side Liquidity Drying Up appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Bitcoin tumbled to a low of $91,430 last week, extending its correction after reaching a record high of $108,100 on 17 December 2024. It continued to drop on Monday of this week and is now down more than 15 percent on growing market caution, driven by surging US Treasury yields and consistent outflows from spot Bitcoin ETFs. Notably, ETFs saw seven days of outflows in the past 12 trading days, with $718 million exiting in just two days, a sharp reversal from the early January inflows of almost $2 billion. Rising US Treasury yields have hit a 14-month high at 4.79 percent, drawing institutional money away from riskier assets like Bitcoin. Historically, BTC reacts quickly to yield spikes, but this time the impact was compounded by the news that the US Department of Justice plans to liquidate $6.5 billion in seized Bitcoin. Despite macro pressures, Bitcoin remains resilient—still up 42 percent since the US election—outperforming equities, which have erased post-election gains. However, with the Federal Reserve signalling fewer rate cuts and financial conditions tightening, Bitcoin may face more volatility in the short term. Optimism around pro-crypto regulation under the incoming administration of President-elect Donald Trump could, however, still limit deeper losses and keep BTC in a strong long-term position. The latest economic data shows that the US economy ended 2024 with a resilient labour market and unexpected growth in the services sector. In December, the labour market added 256,000 nonfarm jobs, surpassing forecasts and marking the strongest monthly gain since March. Key industries such as healthcare, retail, and leisure led the way, with unemployment falling to 4.1 percent and wages rising by 3.9 percent year-over-year. This solid job growth, coupled with steady wage gains, is underpinning strong consumer spending, a cornerstone of the US economy. The resilient labour market has also eased pressure on the Federal Reserve to cut interest rates further, delaying any potential reductions until mid-2025.  The services sector added to this positive momentum, with the Institute for Supply Management (ISM) reporting an increase in its Purchasing Managers’ Index (PMI) to 54.1 in December. This growth was fuelled by rising production and new orders, signalling continued expansion across key industries such as finance, education, and hospitality. However, employment in the services sector dipped slightly, highlighting a nuanced labour landscape with sector-specific challenges.  In the latest cryptocurrency news, the UK Treasury’s decision to exempt crypto staking from collective investment scheme (CIS) regulations offers clarity and flexibility for blockchain businesses, fostering innovation and solidifying the UK as a crypto-friendly jurisdiction. Meanwhile, in Hong Kong, the launch of the Supervisory Incubator for Distributed Ledger Technology by the Hong Kong Monetary Authority provides banks with a structured environment to adopt blockchain solutions like tokenised deposits while managing associated risks, setting a global precedent for balancing innovation and regulation. Crypto markets still faced some uncertainty, however, following news that the Department of Justice has been authorised to liquidate $6.5 billion worth of Bitcoin seized from the Silk Road marketplace. News of the sale contributed to the  7.2 percent price decline in Bitcoin, amplifying market concerns about potential volatility. This event, to an extent, challenges the pro-crypto sentiment that fuelled Bitcoin’s rally to its recent all-time high and reintroduces regulatory uncertainty, underscoring the delicate interplay between policy decisions and market sentiment. The post Bitfinex Alpha | Bitcoin to Range as Economic Realities Loom appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Bitcoin staged a remarkable recovery last week, climbing back above $100,000 after briefly dipping to a low of $89,698. The recovery reached a high of $105,800. This 18.2 percent peak-to-trough bounce highlights Bitcoin’s relative strength compared to equities, with BTC ending the week up 10 percent.  BTC/USD 4H Chart Showing the All-Time High as of Last Week The dip below $90,000 triggered significant liquidations, with $818 million recorded on January 13th, including $592 million in long positions. Short-term holders (STHs), whose average cost basis is $88,400, played a critical role in defending the price during this correction. Historically, STH cost basis acts as a reliable support level, and last week’s trough aligned closely with this level, triggering a rebound. However, a drop below the STH cost basis could create stress, potentially driving further sell-offs. The recovery was primarily fuelled by aggressive spot buying, as seen in the sharp rise in the Spot Cumulative Volume Delta. This metric indicated significant taker buy pressure, particularly from US-based exchanges. The buying patterns mirrored previous activity associated with MicroStrategy and ETF purchases, further reinforcing the view that institutional demand remains strong. However, the spot buying pressure seen last week might require time for bids to replenish, potentially triggering a brief pullback before further upward momentum resumes. Bitcoin’s resilience and sustained demand position it well for continued strength in the medium term. Inflation showed a slight uptick in December, with the CPI rising 2.9 percent on an annualised basis, driven largely by surges in energy prices. While core inflation remains above the Federal Reserve’s two percent target, stabilising import prices and a lower-than-expected Producer Price Index growth offers some optimism for moderating inflationary pressures. Consumer spending remained robust, with retail sales climbing 3.9 percent year-over-year in December, bolstered by wage growth and a strong labour market. However, uncertainties loom as Trump’s proposed tariffs could escalate costs for essential goods, disproportionately impacting lower-income households and potentially disrupting recent progress in inflation control. Meanwhile, the Federal Reserve appears cautious, signalling fewer rate cuts in 2025 to balance inflationary concerns with economic growth. Despite these headwinds, the resilience of consumer activity and employment strength provides a solid foundation, notwithstanding that the risks from tariff policies, labour supply constraints, and seasonal spending fluctuations could pose significant challenges.  In crypto news last week, Trump launched meme coin $TRUMP on the Solana blockchain, stirring both enthusiasm and scepticism as it rapidly reached a valuation of $15 billion before seeing some significant profit-taking. While marketed as a symbol of support for Trump’s ideals rather than an investment, concerns over its centralisation and transparency persist, with potential implications for regulatory scrutiny and political finance. In the meantime, institutions continue to look for ways to make crypto-related assets available to traditional finance investors, with filings submitted for a spot Litecoin ETF and a proposed Onchain Economy ETF focusing on digital asset infrastructure. These filings reflect a broader push for mainstream crypto adoption following the success of Bitcoin and Ethereum spot ETFs. The OnChain Economy ETF seeks to provide exposure to businesses shaping the blockchain economy, offering a diversified entry point for investors amid growing interest in the sector. The post Bitfinex Alpha | Markets Rebound but Beware ‘Sell-the-News’ Trading appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Bitcoin reached a new ATH of $109,590 on January 20th, driven by optimism over President Donald Trump’s inauguration and the expected advent of more crypto-friendly policies in the US. Anticipation of initiatives like a strategic Bitcoin reserve and expanded regulatory clarity boosted speculative buying. However, Bitcoin struggled to maintain momentum, retreating to trade below the previous ATH of $108,100, and now trading below $100,000, as concerns rise over China competition in AI and the ongoing threat of tariff hikes by the new US administration. 

Bitcoin’s correlation with the S&P 500 and NASDAQ has reached new year-to-date highs, highlighting Bitcoin’s evolving status as a major risk-on asset. But while the S&P 500 rallied to new highs last week— Bitcoin continues to be vulnerable to the news agenda, liquidity and speculation.
Bitcoin, S&P500 and NASDAQ 30-Day Rolling Pearson Correlation. Similar to some other equity markets, BTC reacted with caution following last week’s Bank of Japan rate hike and it continues to correlate closely with equities, falling sharply on 27th January as jitters increase about China’s ability to produce cheaper AI models through Deepseek and the threat of tariffs being imposed on Colombia. Bitcoin options implied volatility declined 13 percent over the course of the week, suggesting traders are not expecting to see elevated price action.

In the macro economy, labour market conditions remain steady despite a slight rise in unemployment claims, with continued claims reaching their highest level in over three years. Meanwhile, consumer sentiment has declined, after six-months of continuous improvement. Concerns over rising unemployment and inflation, influenced by expectations of high import tariffs and regulatory changes under President Trump, weigh heavily on household confidence. Inflation expectations have risen, reflecting broader apprehension about the impact on prices from new policies.

S&P Global US Flash PMI (Purchasing Managers’ Index) Economic activity, while continuing to grow, has also moderated. The S&P Global Flash US PMI reported services growth decelerating even as manufacturing saw its first expansion in months. Inflationary pressures remain a focal point for businesses, compounded by uncertainties over trade and immigration policies. 

Across the cryptocurrency industry, we are seeing significant developments, including a surge in ETF filings for Litecoin, XRP, and Solana, reflecting growing institutional interest. Simultaneously, the US House Oversight Committee has launched an investigation into claims of unfair debanking practices targeting crypto-linked entities. On a different front however, FINTRAC issued an alert on the role that crypto still seems to be playing in money laundering – in this case the proceeds of synthetic opioid sales. It has called on financial institutions to implement stronger anti-money laundering measures. The post Bitfinex Alpha | BTC to consolidate as volatility drops appeared first on Bitfinex blog.

Read Full report Subscribe to Bitfinex Alpha Bitcoin’s price action has increasingly mirrored broader macroeconomic developments, reacting strongly to US policy announcements by President Donald Trump. Over the past week, Bitcoin has fallen below $100,000, aligning with expectations of declining volatility and a potential near-term market-wide correction. While Bitcoin started 2025 with a 10 percent gain in January, its momentum has slowed, with the price consolidating within a 15 percent range for the last 65 days.  Indeed, BTC has been leading US equity markets in terms of response to macro developments. A double-top structure that has been seen in both the Bitcoin and the S&P 500 charts, occurred first in BTC. The latest market catalyst—Trump’s tariff announcements—triggered a 0.5 percent decline in the S&P 500 last Friday and a more pronounced drop in Bitcoin. Bitcoin’s 30-day rolling correlation with the S&P 500 has climbed to 0.8, marking its highest level in five months. This has reinforced the view that Bitcoin is trading more like a macro-driven risk asset.
Despite short-term volatility, Bitcoin remains structurally strong on higher time frames. BTC has outperformed traditional markets since the US election, rallying from $67,000 to over $100,000, while equities have shown a choppy recovery. BTC/USD 4H Chart. (Source: Bitfinex)
Against this backdrop, the US economy continues to show resilience through solid consumer spending and economic expansion, yet it is also facing headwinds from policy uncertainty, trade disruptions, and stubborn inflation. 
The Federal Reserve has held interest rates steady at 4.25–4.50 percent last week, signalling that policymakers are not ready to ease monetary conditions until inflation shows a clear downward trend. Consumer spending surged in December, with real spending rising 0.4 percent, further reinforcing economic growth but complicating the Fed’s path forward.
Month-over-Month Percent Change in PCE (Personal Consumption Expenditure) Price Index Inflation remains above the central bank’s two percent target, with core PCE inflation hovering at 2.8 percent year-over-year. Despite slower wage growth, a tight labour market and potential immigration restrictions could drive labour costs higher, adding to inflationary risks. Meanwhile, economic expansion closed the year at 2.3 percent, supported by robust household consumption and increased government spending, though slowing business investment and trade uncertainties continue to pose risks. Markets have consequently adjusted rate cut expectations, pricing in a lower probability of near-term easing. With political and economic variables in flux, the coming months will be critical in determining whether the Fed will shift toward policy easing or maintain its restrictive stance to combat inflationary pressures. As the US economy navigates a period of resilience mixed with policy uncertainty, the cryptocurrency sector is experiencing its own inflection point—one marked by aggressive institutional accumulation, financial innovation, and deeper integration with traditional financial infrastructure. With inflationary pressures keeping the Federal Reserve on hold, market participants are closely watching how digital assets will respond to macroeconomic trends, monetary policy shifts, and increasing corporate adoption.
MicroStrategy continues to double down on Bitcoin, acquiring another 10,107 BTC for $1.1 billion, bringing its total holdings to 158,400 BTC. The firm has also filed a shelf registration with the SEC, allowing it to raise capital efficiently for future Bitcoin purchases. Meanwhile, Metaplanet, a Tokyo-listed company, made history with a $745 million capital raise to expand its Bitcoin reserves, reinforcing its “Bitcoin-first, Bitcoin-only” strategy amid yen depreciation. This signals a growing institutional conviction that Bitcoin serves as a hedge against monetary debasement and economic instability.At the same time, Tether is expanding the utility of its $140 billion USDt stablecoin by integrating it into Bitcoin’s Lightning Network. This move significantly enhances Bitcoin’s financial infrastructure, enabling faster and more efficient global transactions. By leveraging Taproot Assets, Tether is bridging the gap between stablecoins and Bitcoin’s security, making it a more viable payment network rather than just a store of value. The post Bitfinex Alpha | BTC Roiled by Tariff Hikes, But Remains Resilient appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Bitcoin continues to trade within a narrow $91,000 to $102,000 range, now stretching into its 81st consecutive day of consolidation. With volatility at historic lows, the market remains directionless as geopolitical tensions and macroeconomic uncertainty weigh on sentiment. Over the past week, Bitcoin’s peak-to-trough movement was just 4.3 percent, closing with a modest 0.82 percent gain, underscoring the lack of either strong buying or selling pressure. Altcoins have suffered significant losses, with meme coins like PEPE plunging 46.4 percent over the past month, while OM, LTC, and HYPE remain the only large caps posting gains.  BTC/USD Daily Chart. (Source: Bitfinex) Bitcoin’s Inter-Exchange Flow Pulse (IFP)—a useful indicator of market sentiment—has turned bearish for the first time since June 2024, suggesting potential downside. The IFP records moves in BTC exchange flows from derivatives wallets to spot wallets suggesting reduced risk appetite, and this can often lead to market corrections. Meanwhile, realised losses have spiked during recent re-tests of range lows, mirroring past capitulation events within the ongoing bull cycle.  Despite signs of near-term market heaviness, Bitcoin remains, however, structurally intact. Historically, 81-day consolidation phases resolve within 90 days, meaning a decisive breakout—up or down—could be imminent.  The US economic landscape is also facing a renewed challenge as inflation surged in January 2025, marking the most significant rise in consumer prices in nearly 18 months. The Consumer Price Index increased by 0.5 percent for the month, pushing the year-on-year inflation rate to 3 percent—exceeding market expectations. The unexpected inflationary surge comes at a time when the Federal Reserve has maintained restrictive monetary policies to control price stability, making an imminent rate cut unlikely. The labour market remains strong, with rising wages fueling consumer demand, further complicating efforts to control inflation. Consumer Price Index (Source: Macromicro) Adding to inflation concerns, the Producer Price Index climbed by 0.4 percent in January, following a 0.5 percent rise in December, marking the sharpest two-month increase in nearly a year. The acceleration in wholesale prices indicates persistent inflationary pressures in the supply chain, making it more difficult for businesses to absorb rising costs without passing them on to consumers. Initially, markets priced in several interest rate reductions, but with inflation proving more stubborn than anticipated, the Federal Reserve may keep rates elevated for longer, impacting borrowing costs and business investment. It is true that US retail sales sharply declined in January, falling by 0.9 percent, and marking the most significant drop in nearly two years. But this downturn was primarily attributed to adverse weather conditions, ongoing vehicle shortages, and wildfire disruptions. The coming months will be critical in determining whether this decline is a seasonal adjustment or an indication of broader economic headwinds.  In the meantime, Strategy, formerly known as MicroStrategy, has expanded its Bitcoin holdings once again, acquiring an additional 7,633 BTC last week. This brings its total holdings to 478,740 BTC, with an average purchase price of $62,473. Executive Chairman Michael Saylor remains steadfast in his long-term “buy and hold” strategy, reaffirming his commitment to not selling the company’s Bitcoin holdings. This latest acquisition, disclosed in a February 10 filing, further solidifies Strategy’s position as one of the largest institutional holders of Bitcoin, reinforcing confidence in the asset’s long-term value proposition. Meanwhile, institutional adoption of Bitcoin continues to gain momentum as Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company, made a significant investment of $436.9 million in BlackRock’s spot Bitcoin ETF during the fourth quarter of 2024. The investment coincided with BlackRock receiving a commercial license to operate in Abu Dhabi during the same period, further cementing the region’s role as a crypto-friendly jurisdiction. The post Bitfinex Alpha | BTC Consolidates as Inflation Surges appeared first on Bitfinex blog.

Review FUll Report Subscribe to BItfinex Alpha Bitcoin remained range-bound over the past week, and has been trading between the $91,000 and $102,000 range for over 90 days now, as market momentum continued to stall.  Volatility surged on Friday, February 21st, following news of the ByBit hack and a sharp S&P 500 options expiry sell-off, triggering a 4.7 percent drop on the day to nearly $95,000 before it recovered over the weekend. Across the broader crypto market, most major assets have entered a corrective phase following their late-2024 rallies. Bitcoin (-5.9 percent), Ethereum (-16.9 percent), and Solana (-33.1 percent) have all declined in February from rallies in November and December 2024, while Memecoins, which surged in December, have fallen sharply by -37.4 percent.  The downturn has been exacerbated by macro-driven uncertainty, as well as Bitcoin’s increasing correlation with traditional markets. The S&P 500’s failure to rally above the 6,000 level has dampened risk appetite across asset classes, contributing to a decline in speculative participation across risk assets.  
Bitcoin, SPX And Major Crypto Asset Performances In 2025. (Source: Bitfinex, S&P) Institutional demand has also slowed significantly. Bitcoin ETF inflows, which peaked at 18,000 BTC per day in November 2024, have reversed into net outflows, with $360 million withdrawn on February 20th alone. 
This declining institutional engagement, paired with a notable drop in leveraged trading activity, signals a broader market contraction.

Bitcoin remains at a critical juncture after nearly 90 days of consolidation. As market participants await a catalyst, Bitcoin’s next major move will likely be dictated by macroeconomic trends and could be decisive.The US economy is also facing increasing challenges as consumer confidence weakens and inflation expectations rise, posing a potential setback to the Federal Reserve’s progress in controlling price growth. The latest University of Michigan survey shows a sharp decline in consumer sentiment, reaching its lowest level in over a year. Households are bracing for higher inflation, with expectations climbing to 4.3 percent over the next year, up from 3.3 percent in the previous month. This shift in sentiment suggests consumers are growing more cautious, which could slow spending and economic activity. The White House’s proposed tariffs on imports are adding to inflationary pressures, reversing some of the progress made in disinflation over the past two years.
University of Michigan- One-Year Inflation Consumer Expectations
Meanwhile, the housing market is experiencing a slowdown, with new home construction dropping by 8.4 percent in January. While severe winter storms played a role in disrupting projects, the bigger concern is the long-term impact of higher material costs due to tariffs and persistently high mortgage rates. 

New Residential Construction (US Census Bureau)
Builders are struggling to start new projects, as rising expenses make construction less profitable. The lack of new supply is keeping home prices elevated, further complicating the Federal Reserve’s efforts to bring inflation down to its 2 percent target. With no major policy shifts expected to ease supply constraints, housing affordability is unlikely to improve in the near future. The cryptocurrency industry is experiencing a mix of bullish momentum and heightened risk as major events shape the market. Strategy announced a $2 billion convertible senior notes offering, with proceeds intended for Bitcoin acquisitions and corporate purposes.  Meanwhile, the US Senate confirmed Howard Lutnick as Secretary of Commerce, a decision that could shift regulatory attitudes toward digital assets. Lutnick, a long-time proponent of Bitcoin and an investor in Tether, is expected to push for less restrictive policies that could encourage mainstream adoption of cryptocurrency. His stance on trade, particularly support for President Trump’s tariff policies, may also have broader implications for financial markets, potentially affecting institutional crypto investment. On the downside, Bybit suffered a $1.5 billion hack, making it one of the largest crypto security breaches in history. The attack highlights persistent vulnerabilities in crypto asset security. While Bybit has assured users of its solvency, the breach raises concerns over security protocols and the growing sophistication of cyber threats. The post Bitfinex Alpha | Bitcoin Trading Turns Turgid appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe Bitcoin closed February with a steep 17.39 percent decline, marking its worst February performance since 2014 and the second-worst in history. The past week saw intense volatility, with Bitcoin plunging 18.4 percent to a low of $78,617 before rebounding. This sharp decline was largely driven by record-breaking Bitcoin ETF outflows, which on February 25, peaked at over $1.1 billion, as institutional flows weakened.  Since the November 2022 bottom was reached following the collapse of FTX, Bitcoin’s bull market corrections have ranged between 18-22 percent, but the February pull back from the January all-time high of $109,590 extended to 28.3 percent, one of the most significant since the bear market ended.  BTC/USD Weekly Chart. (Source: Bitfinex) The announcement on Sunday, March 2nd of a US crypto reserve by President Donald Trump triggered a sharp reversal with a 20 percent rise from local lows and over 12 percent on the day, but subsequent selling pushed Bitcoin down to approximately $92,000, and until there are more details of the proposed crypto reserve, we believe broader macro conditions, including the performance of the S&P 500, will heavily influence Bitcoin’s trajectory in the coming weeks. The market remains fragile, and without renewed institutional inflows, sustained bullish momentum may prove elusive. The US economic landscape remains complex, with persistent inflation, declining consumer confidence, and slowing growth shaping the outlook. January’s Personal Consumption Expenditures inflation data revealed a 2.5 percent annual increase, exceeding the Federal Reserve’s target of 2 percent. Despite the usual post-holiday dip in household spending, personal income rose by 0.9 percent in January, keeping the inflationary pressure up. Rising service costs and new import tariffs are also expected to further complicate the Fed’s ability to adjust interest rates, making a rate cut in the near term unlikely. Percent Change in PCE Price Index, Month-over-month Basis (US Bureau of Economic Analysis) Consumer sentiment has also taken a hit, with the Conference Board’s Consumer Confidence Index dropping to 98.3 in February, marking its sharpest decline in three and a half years. Job market concerns are growing, with more consumers reporting difficulty finding jobs and fewer expecting new opportunities in the coming months. Trade policies and rising prices for essential goods, including food and housing, continue to erode confidence. Meanwhile, the US economy expanded at a slower rate of 2.3 percent in the fourth quarter of 2024, down from 3.1 percent in the previous quarter. This slowdown is attributed to harsh winter weather, declining retail activity, and uncertainty over trade policies. Although government spending and exports provided some support, consumer spending and business investment weakened. The widening trade deficit, which reached a record $153.3 billion in January, further highlights the challenges facing the economy. With inflationary pressures and sluggish consumer sentiment persisting, economic growth in early 2025 is expected to remain subdued unless key policy adjustments or favourable economic conditions drive renewed momentum.  Real GDP, Percent Change from Preceding Quarter Trump’s announcement of a US Crypto Strategic Reserve, indicated that it would include major cryptocurrencies, including Bitcoin and Ethereum, and follows his executive order in January to clarify crypto regulation while banning a central bank digital currency (CBDC). This move confirms a major shift in the government’s approach to digital assets, reinforcing the US as a global leader in crypto ahead of the White House Crypto Summit on March 7.  Meanwhile, MetaMask has announced plans to integrate Bitcoin and Solana into its wallet, allowing users to interact with these networks without requiring additional wallets. Solana, which has seen rapid adoption due to the popularity of memecoins, will be supported starting in May, while Bitcoin support is expected in the third quarter of 2024.  On the regulatory front, the US Securities and Exchange Commission (SEC) has clarified that most memecoins do not fall under federal securities laws, as they do not generate income or depend on managerial efforts. However, the SEC has cautioned that projects falsely labeling themselves as memecoins to bypass regulations or engaging in fraudulent activities will still be subject to legal action. This distinction provides some regulatory clarity while also underscoring the risks of investing in misleading crypto projects. Meanwhile, the SEC has once again delayed its decision on whether to permit the Cboe to list options for Ether ETFs, pushing the deadline to May. A similar decision on Nasdaq ISE’s request to list options for BlackRock’s iShares Ethereum Trust is expected in April. The introduction of options for ETH ETFs is seen as a crucial step toward institutional adoption, especially considering that spot Ether ETFs have already attracted $11 billion in net assets since their launch in mid-2024.  The post Bitfinex Alpha | February Ends with a Whimper. March Starts with a Bang! appeared first on Bitfinex blog.

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to Bitfinex Alpha! Want to receive Alpha from Bitfinex every week? Subscribe After briefly reclaiming the $90,000 level last week, Bitcoin has now entered into a new and more volatile range between $85,000 and $92,000, as uncertainty continues to overshadow the market. A price surge at the start of last week accompanied speculation on the US Strategic Bitcoin Reserve and the White House Crypto Summit, but as news was confirmed, traders took a “sell-the-news” approach, and the market quickly erased gains. The options market also added to the volatility last week, with a significant $3 billion in Bitcoin and Ethereum contracts expiring last Friday, further driving price swings.  Options realised volatility surged above 80 percent, signalling heightened instability as traders reacted to shifting macroeconomic conditions. Implied volatility jumped 35.7 percent just ahead of the summit, as traders hedged positions. Despite this, on-chain data revealed that many traders saw significant losses last week, with realised losses across market participants hitting $818 million per day, with February 28 and March 4 ranking among the largest single-day loss events in this cycle. Such widespread capitulation often precedes market stabilisation, though geopolitical and macroeconomic concerns remain a significant overhang. Bitcoin Spent Output Profit Ratio. (Source: Bitcoin Magazine Metrics) Bitcoin’s Spent Output Profit Ratio (SOPR) dipped into loss territory for the first time since October 2024, indicating significant distress selling. Short-term holder SOPR recorded its second-largest negative print of this cycle at 0.95, signalling that new market entrants are capitulating. Historically, any SOPR measure above 1.0 signals re-accumulation and bullish continuation, while extended weakness below this level could suggest further downside. If the bull market structure remains intact, buyers should begin stepping in at these levels, making SOPR a key metric to monitor in the coming weeks.  Unemployment Rate and Nonfarm Payroll Month-over-Month Change (Source: Bureau of Labor Statistics) Current macroeconomic indicators, however, are not pointing to a clear direction moving forward. US job market, productivity, and manufacturing sector data are decidedly mixed, with steady employment growth, rising wages, and efficiency gains offset by inflationary pressures, trade disruptions, and cautious business expansion. The US  job market remains resilient, with 151,000 jobs added in February, though the unemployment rate ticked up to 4.1 percent due to government job cuts. Wage growth remains strong, but rising labour costs and inflation pressures could challenge expectations of multiple Fed rate cuts this year. Worker productivity, on the other hand, increased by 1.5 percent in Q4 2024, helping businesses offset rising costs without expanding their workforce, but long-term risks remain if hiring stagnates. Meanwhile, the manufacturing sector faces growing instability as new tariffs drive up production costs and slow new orders, raising concerns about the sector’s ability to sustain growth amid trade uncertainty. US President Donald Trump’s establishment of a Strategic Bitcoin Reserve, consolidating over 187,000 BTC worth $13 billion, marks a historic shift from auctioning seized Bitcoin to holding it as a national asset. His administration also seeks stablecoin legislation by August and aims to end restrictive policies like Operation Choke Point 2.0, reinforcing the US position as a global crypto leader. With Trump’s Strategic Bitcoin Reserve plan, the US may retain BTC as a long-term financial asset instead of selling it, potentially influencing global crypto policy. Meanwhile, the SEC’s Crypto Task Force is set to hold a roundtable on March 21 to clarify the security status of digital assets, signalling a shift toward more structured regulatory guidance.In Japan, the Liberal Democratic Party is implementing crypto-friendly tax reforms, reducing the capital gains tax to 20 percent and classifying cryptocurrencies as a distinct asset class. The reforms also propose tax deferrals on crypto-to-crypto swaps and equal tax treatment for derivatives, encouraging digital asset investment. The post Bitfinex Alpha | Market Losses Rise as Bulls Hesitate appeared first on Bitfinex blog.