Bitcoin (BTC) Shows Resilience Amid Market Volatility, Says Bitfinex Report

Bitcoin
(BTC)
has
demonstrated
notable
resilience
in
the
face
of
market
volatility,
as
reported
in
the
latest
Bitfinex
Alpha
113.
The
cryptocurrency
saw
a
significant
price
rebound,
climbing
13%
from
a
low
of
$53,000
and
ending
the
week
with
an
8.76%
gain.

Market
Recovery
and
Ongoing
Volatility

Despite
this
positive
movement,
analysts
from
Bitfinex
caution
that
the
recent
uptick
does
not
necessarily
indicate
the
end
of
the
bearish
trend.
Historically,
weekend
rallies
have
been
followed
by
corrections
at
the
start
of
the
week,
making
it
crucial
to
monitor
early-week
market
behavior
before
drawing
conclusions
about
the
market’s
direction.

Long-Term
and
Short-Term
Holders

A
positive
sign
is
the
reduced
selling
pressure
from
Long-Term
Holders
(LTH).
The
supply
held
by
LTH
has
stabilized
at
approximately
14.8
million
BTC,
down
from
16.2
million
BTC
in
January.
This
stabilization
is
supported
by
the
LTH
Spent
Output
Profit
Ratio,
indicating
a
decrease
in
profit-taking
activities.

Attention
is
now
shifting
to
Short-Term
Holders
(STH),
whose
supply
has
significantly
increased
since
January
and
is
currently
at
4.8
million
BTC.
This
increase
is
primarily
driven
by
new
investors
entering
the
market
through
ETFs
and
buying
during
market
corrections.
However,
the
recent
price
drop
has
resulted
in
2.8
million
BTC
held
by
STH
being
in
a
loss,
creating
a
dilemma
for
these
investors
on
whether
to
hold
or
sell
at
a
disadvantage.

Economic
Indicators
and
Market
Sentiment

In
the
broader
economic
context,
the
U.S.
economy
presents
mixed
signals.
Consumer
prices
have
dropped
for
the
first
time
in
four
years,
driven
by
lower
gasoline
prices
and
slower
rent
growth.
This
trend
supports
the
case
for
deflation
and
may
lead
the
Federal
Reserve
to
consider
lowering
interest
rates
in
September.
On
the
other
hand,
producer
prices
saw
a
slight
increase
in
June
due
to
rising
service
costs,
although
housing
cost
reductions
were
not
factored
in.

Small
business
optimism
has
reached
its
highest
point
in
30
months,
although
it
remains
below
the
historical
average
of
98.
Inflation
continues
to
be
a
primary
concern
for
small
businesses,
which
are
closely
watching
economic
developments
and
the
Federal
Reserve’s
upcoming
decisions.

Crypto
Market
Dynamics

In
the
crypto
market,
Germany’s
Bitcoin
sales
appear
to
have
concluded,
and
the
SEC
has
wrapped
up
investigations
into
Hiro
Systems
and
Paxful.
However,
efforts
by
U.S.
lawmakers
to
overturn
the
SEC’s
SAB
121
decision—a
rule
requiring
banks
to
list
crypto
assets
as
liabilities—have
failed,
limiting
banks’
ability
to
offer
digital
asset
custody
services.

Overall,
while
the
recent
price
surge
in
Bitcoin
indicates
potential
for
short-term
recovery,
market
sentiment
remains
highly
sensitive
to
news
and
economic
indicators.
Observing
the
behavior
of
STH
and
market
reactions
in
the
coming
week
will
be
crucial
in
determining
the
short-term
trajectory
of
BTC
prices.

For
more
detailed
insights,
refer
to
the
full
report
on

Bitfinex’s
blog.

Image
source:
Shutterstock