June 10th Bitfinex Alpha | BTC is resilient, but watch your macros
On Bitfinex Alpha
Despite an overall positive week for Bitcoin, stronger-than-expected US employment data caused prices to fall on Friday, raising concerns about the timing of a potential interest rate cut. Strong spot ETF flows have kept Bitcoin resilient, currently enjoying 20 consecutive trading days of net inflows. However, the inability to break above the range high is negative in the short term. High open interest on BTC and altcoin perpetual futures, along with high funding ratios, indicate leveraged positions that could lead to price corrections in the future.
In fact, short-term Bitcoin holders have seen increased activity, with holdings increasing from 2.2 million BTC in January to over 3.4 million BTC by mid-April, but this surge due to spot Bitcoin ETF purchases is due to sensitivity to price volatility. It aroused.
As we reported in a previous version bitfinex alpha, However, long-term Bitcoin holders continue to show strong market confidence, and recent data shows that selling by this group has stalled. The BTC I have held for over a year is currently dormant. Additionally, Bitcoin “whales” (those holding more than 1,000 BTC) are accumulating at a rate reminiscent of pre-2020 bull markets, reaching historic equilibrium highs.
Crypto asset prices continue to be influenced by macroeconomic developments. Newly released U.S. employment data for April showed a sharp decline, signaling a slowing economy. However, May employment data contradicted this trend with an unexpected surge in labor demand, raising doubts about the possibility of a short-term interest rate cut.
That puts the U.S. out of competition with other central banks such as the European Central Bank and the Bank of Canada, which last week began cutting interest rates to spur recovery and growth.
Adding to the complex economic situation, the U.S. services sector also rebounded in May, reversing April’s contraction, with business activity reaching its fastest pace in three years. This resilience complicates the Fed’s decision-making. That’s because the Fed balances signs of economic weakness with areas of significant strength.
The strength and adaptability of the U.S. economy allows it to thrive as strong labor demand and rising wages continue to support economic growth and robust consumer spending despite high interest rates. Nevertheless, there is a risk that prolonged high interest rates will lead to a contraction in economic activity, a decrease in investment, and a slowdown in job creation, leading to an economic recession.
In the latest crypto news, New York Attorney General Letitia James is taking legal action against AWS Mining and NovaTech for allegedly operating a crypto pyramid scheme. These companies and their promoters promised high returns but misled investors by operating as pyramids and Ponzi schemes.
Meanwhile, ProShares has filed with the SEC to list a spot Ethereum ETF on the NYSE, with a decision expected by the end of July 2024. In accordance with SEC guidance, this offering excludes Ether staking capabilities, which may limit investor return opportunities, but has regulatory standards in place for broader market acceptance.