Bitfinex Alpha | BTC bottom should be near

December 1st Bitfinex Alpha | BTC bottom should be near

Bitcoin staged a remarkable recovery last week, rallying more than 15% from recent lows and falling 35.9% from all-time highs after enduring the sharpest correction of the cycle. However, selling pressure remains as BTC fell 4.1% at the start of the current weekly session.

This rebound is consistent with the previous view that the market is nearing a local bottom from a time perspective, although it remains to be seen whether we have seen the bottom in terms of price. However, with signs of extreme deleveraging, capitulation of short-term holders, and seller exhaustion, we believe the foundations are in place for a stabilization phase to begin.

On-chain metrics further reinforce this theory. This is the third time since early 2024 that the adjusted expenditure-output return has fallen below 1, consistent with the same loss realization dynamics observed at previous cyclical lows in August 2024 and April 2025.

The current depth of loss locking is evident as corporate-adjusted realized losses have soared to $403.4 million per day, exceeding the previous significant lows measured by this metric.

Realized losses at this level usually indicate that capitulation is nearing completion, rather than the beginning of a more severe decline. Derivatives data, on the other hand, paints a similar picture of controlled resets. Total BTC futures open interest (OI) decreased to $59.17 billion, well below the peak of $94.12 billion, indicating that leverage was flushed out in an orderly manner.

The continued contraction in OI as spot prices rise suggests short covering rather than new speculative risk-taking, reinforcing the view that the market is moving towards a more stable consolidation regime, reducing vulnerabilities and potentially establishing the foundations for a sustained recovery in the fourth quarter.

Recent US macroeconomic data reveals a widening gap between slowing consumer activity and strong business investment. Retail sales in September sharply slowed to 0.2% growth, and the GDP-related control group fell into negative territory. For many, rising prices due to tariffs and slowing income growth weighed on household budgets. At the same time, wholesale inflation remained steady, with PPI rising 0.3% month-on-month and energy costs rising 3.5%, indicating that upstream price pressures remain persistent. Meanwhile, consumer sentiment worsened, with the Conference Board’s confidence index dropping to 88.7 as households became more wary of the job market and refrained from purchasing big-ticket items.

By contrast, U.S. companies are accelerating spending. Core capital goods orders, a key indicator of business investment, rose 0.9% in September, matching August’s momentum and significantly exceeding expectations. Even as tariff uncertainty weighs on some manufacturing sectors, companies are ramping up investment in AI, automation and productivity-enhancing equipment. This surge in business investment helps support a solid growth outlook, with the Atlanta Fed’s GDPNow model estimating third-quarter GDP growth at an annualized rate of 3.9%. The contrast between cautious consumers and confident businesses highlights a widening gap in economic behavior, and the Fed will navigate its December policy meeting with a limited outlook and increasingly uneven signals across the economy.

Last week highlighted a clear shift towards deeper institutional integration for Bitcoin. According to BlackRock’s latest SEC filings, the company’s Strategic Income Opportunities portfolio increased its IBIT holdings by 14%, bringing its total exposure to 2.39 million shares. The move highlights that even traditionally conservative bond funds are now using Bitcoin ETFs as a diversification tool, and coincides with increased structural support for IBIT, including proposed increases in option position limits to accommodate large institutional strategies.

At the same time, ARK Invest continued to lean towards cryptocurrencies despite sector-wide liquidity pressures. ARK executed over $93 million in purchases in one day, increasing its positions in Coinbase, Circle, Block, and its own ARK 21Shares Bitcoin ETF. Coinbase currently holds over 5% of ARKK, and the company’s aggressive accumulation reflects long-term confidence in digital assets, even as crypto stocks face significant monthly declines.

Building on this institutional momentum, Texas became the first US state to publicly invest in Bitcoin, allocating $5 million to IBIT as part of a new state-level Bitcoin reserve program. Although modest in scale, this move is symbolically important and marks the beginning of the transition to direct BTC storage once the infrastructure is ready.