Bitfinex Alpha | Calm comes to BTC

November 3rd Bitfinex Alpha | Calm comes to BTC

Bitcoin has remained within a narrow range between $106,000 and $116,000 for the past two weeks. Despite briefly recovering to $116,500 last week, BTC remains weighed down by a short-term resistance cluster due to continued distributions from long-term holders and weak institutional demand. Implied volatility continues to decline in the options market, with investor positioning moving towards neutral, highlighting the widespread lack of directional confidence following the October 10 liquidation event. The cautious tone in risk markets has been further exacerbated by mixed macro signals from the latest FOMC meeting, with speculative appetite subdued and price movements remaining subdued.

Structural support around $106,000 remains intact, but the balance of evidence points to weaknesses below the surface. Analyzing the net position change metric for long-term holders, this cohort is significantly negative at -104,000 BTC per month, suggesting persistent profit-taking, while the net unrealized P&L metric for short-term holders indicates less conviction among recent buyers. Unless ETF inflows or new spot demand returns to absorb continued distributions, BTC is likely to remain range-bound with a risk bias towards retesting the $106,000 to $107,000 zone. A sustained break below this level could pave the way to $100,000 per BTC, while a decisive recovery above $116,000 would be the first sign of a structural recovery heading into November.

Supporting the mood in the crypto market is that the U.S. economy is entering a new phase of policy readjustment as the Federal Reserve moves from tightening to liquidity management in response to slowing growth and easing inflation.

At its Oct. 30 meeting, the Federal Open Market Committee ended its balance sheet run-off policy and cut interest rates by 25 basis points to a range of 3.75 to 4 percent. The move is in response to tightening liquidity conditions as money market funds withdraw cash from the Fed’s reverse repurchase facility to buy Treasury bills, draining reserves from the banking system.

Since the summer, the bond market has shown expectations for a slowdown in growth and further interest rate cuts, with the yield on 10-year government bonds falling to around 4% and the yield on 30-year government bonds dropping to 4.6%. But recently, the term premium, the extra return that bond investors demand for taking on risk, turned positive for the first time in years. This reflects the market’s view that although fears of a recession are receding, concerns about fiscal risks and inflation risks are rising.

There are also signs of fatigue in the labor market. Wage growth slowed to 3.7% in August from 4.7% last year, according to the Bureau of Labor Statistics. Consumer confidence has declined as well, with the Conference Board Index falling to 94.6 in October, reflecting concerns among low- and middle-income households, despite continued strength in the stock market.

Last Monday, ETHZilla Corporation sold approximately US$40 million of Ether to fund an aggressive share buyback program, signaling a change in the way crypto-native companies manage their financial assets. By converting a portion of its ETH holdings into share buybacks, ETHZilla aims to narrow the discount between its stock price and net asset value, effectively turning its crypto reserves into a corporate finance vehicle. Just one day later, Western Union entered the cryptocurrency space with the announcement of a USD-pegged stablecoin built on the Solana blockchain in partnership with Anchorage Digital Bank. The launch marks another traditional financial institution modernizing cross-border payments by reducing payment times and costs through blockchain technology. Meanwhile, in Asia, Japan has taken a bold step toward nationally coordinated cryptocurrency integration. Mining hardware manufacturer Canaan has announced a deal with a major Japanese power company to deploy water-cooled Avalon A1566HA miners in power grid stabilization projects. This effort uses Bitcoin mining to balance renewable energy loads, demonstrating how blockchain infrastructure can enhance rather than strain the efficiency of power grids.