February 27 Bitfinex Alpha | BTC and ETH have positive signs, but maybe altcoin season hasn't started yet?
In Bitfinex Alpha
Inflows from Bitcoin ETFs remained very strong, even in a short trading week, with around $600 million in net inflows recorded. Centralized exchanges are also seeing a rise in demand for Bitcoin, as evidenced by the large withdrawal of Bitcoin from Coinbase, leaving the exchange with the lowest Bitcoin reserves since 2017. This redistribution of withdrawn Bitcoin to new wallets indicates positive investor behavior, as seen in All of the stock exchanges. Coinbase Premium Indicator and Kimchi Premium Indicator.
Ethereum is also gaining momentum, crossing the $3,000 mark and poised for its highest weekly close in 97 weeks. This boom is stimulating discussion about the possible start of the “altcoin season,” the period in which cryptocurrencies replace Bitcoin. Total Ether reserves across all exchanges currently show a net ETH withdrawal of over 800,000 ETH, indicating a strong scarcity of supply that could further boost its price.
Taking history as a guide, the current stability of Bitcoin dominance at over 51%, could signal the beginning of a new altcoin season. However, while there is an increase in liquidity in the top 20 altcoins, some of this can be attributed to decreased liquidity in coins outside the top 20.
This change in liquidity dynamics indicates a cautious investment sentiment, with a preference for more established and liquid assets, and the market has yet to see a significant recovery for less popular tokens.
The US economy also looks very optimistic. The Propaganda Council published a more positive forecast, marking a major reversal from previous warnings of a coming recession. The resilience of the US economy, demonstrated by continued growth in production, employment and consumer spending, supports its confidence, indicating that the economy is strong enough to withstand any economic fluctuations.
Fed Vice Chairman Philip Jefferson also confirmed that the Reserve Bank's intention is to lower interest rates this year, but it continues to pay attention to the flexibility of consumer spending, although preventing a recession, but it may lead to more inflation.
Recent data has reinforced optimism, with a significant drop in jobless claims to their lowest level in five weeks, and the S&P Global Purchasing Managers' Index for February showed only a slight slowdown, with business activities continuing to expand. Continued resilience in the manufacturing and business sectors also coincides with the overall economic outlook.
In cryptocurrency news, Reddit announced its plans to go public, through which it revealed its investments in Bitcoin and Ether, and its adoption of trading virtual goods in cryptocurrencies. Meanwhile, the Law Commission of England and Wales is consulting on a draft law to recognize cryptocurrencies and non-fungible tokens as property, and address legal challenges in the field of digital assets. Additionally, CME Group announced plans to launch Micro Bitcoin and Ether futures contracts in euros next month, expanding access to cryptocurrency markets following the success of Micro futures contracts with a similar price in US dollars.
Have a great trading week!
