April 8 Bitfinex Alpha | BTC Rebounds, but Market Outlook Is Unsettled
On Bitfinex Alpha
As we head into the Bitcoin halving, we looked at all past halvings since 2012 and used a simple regression model to predict a 160% post-halving price surge over the next 14 months, taking the price between $150,000-169,000. . However, this approach may be too simplistic. The main difference between the 2024 halving and all previous halvings is that BTC has already reached an all-time high before the halving even occurred. There is now much more selling pressure from both long-term and short-term holders (STH). This means that more complex calculations are needed to determine how high BTC can go.
In fact, BTC appears to have entered a consolidation phase between $65,000 and $71,000 and is characterized by volatility. On-chain analysis shows that 18.75 million BTC, representing 9.5% of the circulating supply, was purchased at prices above $60,000, with a significant portion of it belonging to short-term holders. This group includes new spot buyers and approximately 508,000 BTC currently held in US spot ETFs (excluding the Grayscale ETF). These buyers bought more, with long-term holders absorbing approximately 900,000 BTC that has hit the market since December 2023 (including Grayscale ETF sales), but both groups also sold, contributing to volatility in the range. I’m currently experiencing it.
This distribution highlights the active participation of STH at higher price levels, the evolving dynamics of Bitcoin ownership, and the growing influence of institutional investments through spot ETFs. In this cycle, vitality among cohorts is near the highest level of the cycle as there are more entities moving coins than ever before. This makes the markets particularly difficult to read.
In the broader macroeconomy, the labor market beat expectations in March, showing robust growth and wage increases, potentially influencing the Federal Reserve’s interest rate decision. Unemployment rate has fallen. Nonetheless, markets are becoming increasingly cautious about a possible Fed rate cut in June.
Federal Reserve Chairman Jerome Powell acknowledged progress in combating inflation in a recent speech but noted that the task is not yet complete. Emphasizing strong economic growth and job creation, Powell suggested that policy rates may have peaked during this tightening cycle and that a rate cut later this year is possible only if the economy develops as expected.
In cryptocurrency news, South Korea plans to implement stricter regulations on the listing of cryptocurrency tokens on central exchanges to enhance market security and transparency.
Hong Kong virtual bank ZA Bank will provide banking services to stablecoin issuers, and DApp usage and NFT sector have surged in the first quarter of 2024, reflecting growing interest in Web3 and decentralized applications.
Finally, Australia is on the verge of welcoming its first Bitcoin ETF through Monochrome Asset Management’s application to list the product on Cboe Australia.
Happy trading!