Bitcoin (BTC) Faces Mixed Market Signals Amidst News-Driven Sentiment

The
latest
issue
of
Bitfinex
Alpha
highlights
a
complex
scenario
for
Bitcoin
(BTC)
as
the





cryptocurrency
navigates
through
mixed
market
signals
and
news-driven
sentiment.
According
to
Bitfinex
Alpha,
Bitcoin’s
recent
fall
to
$53,000
may
represent
a
local
bottom,
based
on
on-chain
and
order
flow
metrics.
The
price
rebounded
by
over
13
percent
from
the
lows,
closing
the
week
up
8.76
percent.

Market
Dynamics
and
Weekend
Recoveries

Bitcoin
has
retested
the
125-day
range
low
of
$60,200,
a
critical
level
that
was
breached
on
July
3rd
following
news
of
selling
by
the
German
government.
However,
the
weekend
recovery
does
not
necessarily
signify
the
end
of
the
downturn.
Weekend-driven
mini-rallies
have
been
common
over
the
past
few
months,
often
followed
by
retracements
during
the
week.
The
early
part
of
this
week
will
be
crucial
in
determining
the
market’s
short-term
trajectory.

Long-Term
and
Short-Term
Holder
Behavior

A
positive
driver
for
Bitcoin
is
the
stabilizing
sell-pressure
from
Long-Term
Holders
(LTHs).
LTH
supply
has
stabilized
at
around
14.8
million
Bitcoins,
down
from
16.2
million
Bitcoins
in
January,
indicating
reduced
selling
pressure.
This
is
supported
by
the
LTH
Spent
Output
Profit
Ratio
metric,
showing
a
decrease
in
profit-taking
aggressiveness.

Conversely,
the
focus
is
shifting
to
Short-Term
Holders
(STHs),
whose
supply
has
increased
since
January
and
remained
consistent
at
around
4.8
million
BTC.
This
increase
is
largely
due
to
new
investors
entering
the
market
via
ETFs
and
attempting
to
buy
the
dip
during
the
last
correction.
The
current
downward
price
movement
has
pushed
over
2.8
million
Bitcoins
held
by
STHs
into
unrealized
net
losses,
creating
significant
pressure
on
these
investors
to
either
hold
or
sell
at
less
favorable
prices.

Economic
Landscape
and
Its
Impact

The
US
economic
landscape
presents
a
mix
of
promising
trends
and
ongoing
challenges.
Consumer
prices
decreased
for
the
first
time
in
four
years,
driven
by
lower
gasoline
prices
and
a
deceleration
in
rent
increases.
This
shift
supports
the
perspective
that
disinflation
is
becoming
a
sustained
trend
within
the
US
economy,
potentially
paving
the
way
for
the
Federal
Reserve
to
lower
interest
rates
in
September.

Despite
a
modest
rise
in
producer
prices
in
June,
driven
by
increased
service
costs,
the
components
driving
the
rise
are
historically
volatile.
The
Producer
Price
Index
calculation
does
not
account
for
falling
shelter
costs,
a
significant
factor
in
the
fall
in
consumer
prices.

The
Small
Business
Optimism
Index
also
rose,
recording
the
highest
reading
of
the
year
so
far,
although
it
remains
below
its
historical
average
of
98.
Inflation
continues
to
be
the
dominant
concern
for
small
businesses,
which
are
closely
monitoring
economic
developments
and
the
Federal
Reserve’s
forthcoming
decisions.

Signs
of
stress
in
the
US
economy
are
evident
as
consumer
borrowing
surged
to
a
three-month
high
in
May,
predominantly
driven
by
a
rise
in
credit
card
balances.
This
increase
in
consumer
debt,
carrying
high
interest
rates,
may
heighten
financial
strain
on
households,
potentially
curbing
future
consumer
spending
and
slowing
economic
growth.

Crypto
Industry
Developments

In
recent
crypto
industry
developments,
Germany’s
selling
of
Bitcoin
appears
to
be
over,
while
the
US
Securities
and
Exchange
Commission
(SEC)
has
concluded
its
investigations
into
Hiro
Systems
and
Paxful.
However,
US
lawmakers’
attempts
to
override
President
Biden’s
veto
of
a
measure
designed
to
overturn
the
SEC’s
Staff
Accounting
Bulletin
(SAB)
121
fell
short
of
the
required
two-thirds
majority
in
the
House.
SAB
121
mandates
that
banks
must
list
crypto
holdings
as
liabilities,
effectively
barring
them
from
offering
digital
asset
custody
services.

As
the
market
remains
sensitive
to
news
and
external
influences,
monitoring
how
STHs
manage
their
holdings
and
the
market’s
reaction
at
the
start
of
the
week
will
be
critical
in
determining
the
short-term
direction
of
BTC
prices.

For
more
details,
visit
the

Bitfinex
Alpha.

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source:
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