February 5 Bitfinex Alpha | Bitcoin miners are putting pressure on BTC.
On Bitfinex Alpha
In this week’s OnChain report, we noted that much of the recent Bitcoin price decline, especially following the SEC’s approval of a spot Bitcoin ETF, can be attributed to selling by Bitcoin miners who took advantage of BTC’s surge. Has confirmed. It is a catalyst for exiting or leveraging a position.
In particular, miners are considering selling considering the upcoming halving this year, which will reduce BTC rewards and reduce miner profitability. The sale now provides capital for miners to upgrade their infrastructure and is a reminder that miners have significant influence over market liquidity and price discovery. Miner holdings of BTC fell significantly shortly after the ETF’s approval, and last week also saw the largest ever outflow from miner wallets, suggesting more sales could be imminent.
However, despite some recent movement in older coins, most of Bitcoin’s supply remains dormant, indicating that long-term holders are steadfast.
However, in our view, it is important to observe various on-chain indicators to predict market prices. For example, the Days to Expiration indicator has spiked, historically indicating a significant period of coin movement by relatively new holders (1-2 year category) ahead of potential market highs. However, corporate correction vitality remains at multi-year lows, reinforcing the narrative of a market with resilient investors.
Across the economy, the Federal Reserve’s recent decision to keep policy interest rates between 5.25 and 5.5 percent along with continued quantitative tightening underscores the need to balance the thriving pulse of an economy characterized by a strong labor market and soaring consumer confidence. Reflect. Be prepared for hidden inflation risks.
In particular, the U.S. labor market is showing extraordinary vitality, with the number of jobs increasing significantly and exceeding expectations. This resilience, further strengthened by upward revisions to previous months’ numbers, highlights that the labor market is too firm for the Fed to consider cutting rates this quarter. This sentiment is echoed by the surge in consumer confidence reported by the Conference Board, which hit a high not seen since December 2021 and reflects the positive mood in the economy.
But on the positive side, change is evident. The slowest pace of growth in the Employment Cost Index since June 2021 signals easing in labor costs and offers a sign of relief amid inflation concerns. This easing encourages and supports the Fed’s decision to keep interest rates stable and, if sustained, will strengthen confidence that inflation is gradually easing.
According to the latest news in the cryptocurrency space, Bitfinex Securities recently entered the El Salvador market, establishing itself as the country’s first registered and licensed provider of digital asset services. This launch, approved by El Salvador’s National Commission for Digital Assets, strengthens the country’s commitment to fostering a Bitcoin-centric economic framework.
It was also announced this week that Tether has launched Tether Edu to address the growing need for digital literacy and skills, with a particular focus on emerging markets. This program is consistent with Tether’s vision to promote economic empowerment through blockchain technology and stablecoin awareness. Tether Edu is working to enable the wider population to enjoy the benefits of digital assets by paving the way for informed and responsible participation in the digital economy.
It was also revealed this week that U.S. authorities had charged three individuals with involvement in an elaborate theft of $400 million from FTX’s digital wallets shortly after FTX declared bankruptcy. Finally, Genesis Global settled its securities lawsuit with the SEC, agreeing to a $21 million fine related to its Gemini Earn program. The settlement signals the ongoing rigorous regulatory scrutiny of cryptocurrency companies in the U.S. and is part of a broader initiative to ensure compliance and stability in cryptocurrency markets.
This trend of increased regulation and oversight reflects the maturity of the industry and our collective efforts to create a safe, regulated, and trustworthy digital asset environment.
Happy trading!