Bitfinex alpha | Alts Rally continues on to BTC ATH

July 21st Bitfinex alpha | Alts Rally continues on to BTC ATH

Bitcoin hit a fresh high of $123,120 last week, then cooled to sideways integration, recording a rally of 65.3% from its April low. Once Bitcoin suspends, altcoins have surged aggressively, with many big caps like Ethereum and XRP surpassing the top for the first time in months. This change in momentum has led to a 6.9% decline in Bitcoin dominance, the largest since December 2023, suggesting that the market is spinning into higher beta assets, a feature of the medium-cycle expansion stage.

Despite Bitcoin integration, it far surpasses the 95% realized cost base of holders, highlighting that most of the supply is profitable. This historically illustrates a later stage bullish phase in which profits from short-term holders are intensified. Long-term holders first began distributing coins in early 2024, while ETFs, retail and new market participants are absorbing their supply. This natural rotation between holder classes reflects the maturation cycle, but also increases short-term vulnerability, especially when buyer momentum fades.

Bitcoin has returned for a short time to $115,820 after testing the +1 standard deviation band (σ) above the short-term holder cost base above $120,000. For the rally to continue, the next resistance will be in the +2σ band, close to $136,000. This is a level related to terms of acquisition and the vibrancy of the peak market. To maintain momentum to reach that level, it could require an updated institutional influx or a strong macro tailwind to absorb profit-raising pressure. For now, the baton has gone to Altcoins, but the structural strength of Bitcoins remains intact.

The macroeconomics has revealed tariff-driven inflation is emerging, with CPI rising by 0.3% in June and higher import costs from China and other major US trading partners, pushing up the prices of consumer goods such as appliances and apparel. Shelter and service inflation shows mild easing, but producer price data refers to rising upstream costs and potential “stagflation light” risks, urging the Fed to curb interest rate cuts for now. Despite these inflationary pressures, US retail sales rebounded 0.6% in June. This precedes car sales and pre-emptive consumer purchases, while actual consumption continues to rise slightly. Labor market data adds to complex situations. Although early unemployment claims have declined, this suggests continued claims and slow wage growth.

In Crypto, institutional adoptions have skyrocketed as Strategies (previously MicroStrategy) became the first public company to own more than 600,000 BTC, and now exceeding $73 billion. Meanwhile, Hungary has imposed strict penalties on unauthorized crypto transactions, forcing major platforms to halt services, and Kazakhstan is weighing the crypto allocation of sovereign reserves.