Bitfinex alpha | BTC merges as a surge in inflation

February 17th Bitfinex alpha | BTC merges as a surge in inflation

Bitcoin continues to trade within the narrow $91,000 to $102,000 range, and is now growing for 81 consecutive integration days. Markets are not directional as geopolitical tensions and macroeconomic uncertainties place emphasis on emotions due to historic low volatility. Over the past week, Bitcoin’s peak-to-peak movement was only 4.3%, shutting down with a modest profit of 0.82%, underscoring the lack of strong buying and selling pressure.

Altcoins have suffered significant losses, with meme coins like Pepe plunging 46.4% over the past month, with OM, LTC and hype being the only big caps continuing to make profits.

Bitcoin Interchange Current Pulse (IFP) – a useful indicator of market sentiment – has become bearish for the first time since June 2024, suggesting a potential downside. IFP records move wallets from derivative wallets to spots in BTC exchange flows, suggesting a decrease in risk appetite, which can often lead to market corrections. Meanwhile, the realized losses surged during recent retests of low range, reflecting past surrender events within the ongoing bull cycle.

However, despite signs of weight in the recent market, Bitcoin remains structurally intact. Historically, the 81-day integration phase will be resolved within 90 days. In other words, a critical breakout (or down) should be imminent.

With inflation surged in January 2025, the US economic situation also faces new challenges, marking the biggest rise in consumer prices in nearly 18 months. The consumer price index rose 0.5% that month, pushing inflation to 3% year-on-year. An unexpected spike in inflation occurs when the Federal Reserve maintains restrictive financial policies to control price stability and is unlikely to cause an immediate interest rate cut. The labour market remains strong, with rising wages further complicating efforts to drive consumer demand and control inflation.

In addition to inflation concerns, the producer price index rose 0.4% in January and 0.5% in December, marking the sharpest two-month increase in nearly a year. Acceleration of wholesale prices indicates sustained inflationary pressures in the supply chain, making it more difficult for businesses to absorb rising costs without them taking over to consumers. Initially, the market was sold with several interest rate cuts, but inflation has proven to be more stubborn than expected, causing the Federal Reserve to rise longer, affecting borrowing costs and business investments. It may give.

It is true that US retail sales fell sharply in January, falling 0.9%, marking the biggest decline in nearly two years. However, the recession was largely due to harmful weather conditions, ongoing vehicle shortages and wildfire disruptions. The coming months will be important in determining whether this decline is a seasonal adjustment or a sign of a broader economic headwind.

In the meantime, the strategy previously known as MicroStrategy has expanded Bitcoin Holdings again, earning an additional 7,633 BTC last week. This brings the total holdings to 478,740 BTC, with an average purchase price of $62,473. Executive Chairman Michael Saylor remains steady in his long-term “purchase and hold” strategy and reaffirms his commitment to not selling the company’s Bitcoin Holdings. The latest acquisition, disclosed in a February 10th filing, further strengthens the strategic position as one of Bitcoin’s largest institutional owners and strengthens confidence in the long-term value proposition of its assets.

Meanwhile, the institutional adoption of Bitcoin has gained momentum as Abu Dhabi sovereign wealth fund Mubadara Investment Company invested heavily in BlackRock’s spot Bitcoin ETF in the fourth quarter of 2024, with a massive $436.9 million investment in BlackRock’s spot Bitcoin ETF. I’m continuing. A crypto-friendly jurisdiction that operates in Abu Dhabi during the same period and further solidifies the role of the region.