February 16 Bitfinex Alpha | Bitcoin's bullish momentum is positive on all time frames
In Bitfinex Alpha
Investor confidence in Bitcoin is growing, as evidenced by the increase in Bitcoin prices late last week. We attribute this increase in part to the slowdown in sales of Grayscale GBTC funds and the significant increase in overall inflows into cryptocurrency assets.
The amount of Bitcoin held by the new BTC ETFs is now larger than MicroStrategy's holdings, and we expect inflows to continue. Combined with this influx, the Bitcoin halving in 2024 and high levels of illiquid supply – with over 70% of Bitcoin in long-term holders – paint an extremely optimistic picture of Bitcoin price movement.
On-chain data is also increasingly bullish for Bitcoin, especially with the MVRV rising above the one-year simple moving average. Holder's short-term realized price is also showing positive signs as a slowing price growth rate in this measure indicates a slowdown in profit taking, meaning the market consensus is that there is still room for growth.
At the same time, the current US economic context shows us that interest rate cuts are less likely to happen in March and more likely to happen in May. Credit Officers Survey Latest Senior Applications Show Tighter lending standards across most loan portfolios Demand continued in the fourth quarter, albeit at a slower pace, in an apparent response to declining demand for loans across all categories.
This is reflected in the behavior of businesses and consumers, who are reluctant to take out new loans – evidenced by a sharp decline in consumer credit growth. The backdrop of higher interest rates has cast a shadow on consumer spending, which we believe will create a compelling reason for the Fed to ease interest rates soon.
However, to balance this, new data showed the US services sector accelerating, driven by a rise in new orders and a recovery in employment levels.
The current picture is that the US economy has shown remarkable resilience, despite challenges posed by rising borrowing costs, tight credit conditions, and dwindling savings in the pandemic era.
Huge government spending and consumer savings played an important role in boosting GDP and employment growth. But it is clear that high borrowing costs and tight credit conditions threaten to dampen economic activity, which should prompt the Fed to take countermeasures if it wants to maintain economic growth momentum, solve problems and address emerging challenges.
In the cryptocurrency industry, new Bitcoin ETFs have reached a new milestone, as their holdings have now surpassed those of MicroStrategy. This growth underscores the strong demand for these products, especially by investors who like the easier access they provide and who are willing to delegate custody to third parties.
In parallel with this momentum, the regulatory landscape continues to evolve, with Hong Kong announcing a public consultation on a new licensing framework to regulate forex trading. This initiative aims to increase regulatory clarity and protect investors by reducing the risks of money laundering and terrorist financing….
Institutional interest in investing in cryptocurrencies is also evident in data from the Chicago Mercantile Exchange (CME), which shows a 35% increase in trading volume in January, due to a 42% increase in Bitcoin futures trading, to $73 billion, following approvals. By real bitcoin hedge funds.
Furthermore, the regulatory environment is becoming more stringent elsewhere, with South Korea introducing the Virtual Asset User Protection Act, set to take effect on July 19. The law imposes strict regulations on the cryptocurrency industry, including strict penalties for serious acts such as market fraud and illicit trading.
Have a productive first week of trading!
