Bitfinex Alpha | Markets will consolidate rather than cascade

November 10th Bitfinex Alpha | Markets will consolidate rather than cascade

Bitcoin has fallen as much as 21.46% from its all-time high in October last week, briefly falling below the psychological level of $100,000 and falling to a low of $99,045. Such a decline is likely to mean the establishment of a new basis for consolidation, rather than the beginning of a chain reaction. Historical market and on-chain data suggest that the current price action closely reflects a previous mid-cycle correction as structural participants stabilized their exposures and capital circulated within the ecosystem before the broader uptrend continued. The failure to break above the short-term holder (STH) cost basis of $112,500 led to a controlled decline, with BTC falling below that key level, confirming the expected retest of deeper structural support.

At these levels, about 72 percent of Bitcoin supply remains profitable, which is near the lower end of the 70-90 percent equilibrium band typical of mid-cycle economic slowdowns. This situation shows that while selling pressure continues, much of the speculative excess has already been washed away. The active investor realized price of $88,500 currently stands as the next major downside benchmark and is consistent with past cycle support zones that have historically transitioned from capitulation to reaccumulation. While a temporary recovery towards the STH cost base remains likely, a sustained recovery will depend on new inflows of demand from institutional and retail investors. Until then, we expect the market to remain range-bound as volatility reduces and structural positioning resets for the next major cycle move.

The U.S. economy is showing mixed signs, with corporate borrowing recovering but employment stagnant. In the absence of official data, new private-sector data shows the U.S. labor market is deteriorating more rapidly than expected, with the ADP National Employment Report for October showing just 42,000 new jobs, most of them at large companies, while small businesses cut jobs for the third consecutive month. Consumer confidence also fell by 6% in November, indicating that household budgets are beginning to feel the strain due to the employment slowdown and policy uncertainty.

The cryptocurrency industry is entering a new phase of mainstream adoption, driven by record growth in stablecoins and increased regulatory efforts around the world. In October 2025, Ethereum-based stablecoins reached a record monthly trading volume of $2.82 trillion, up 45% from September as investors migrated to dollar-pegged tokens amid the market pullback and Ethereum’s expanding Layer 2 ecosystem enabled faster, cheaper transactions. This milestone strengthens Ethereum’s role as a foundation for digital finance, powering remittances, DeFi, and institutional payments.

Regulators are also accelerating efforts to integrate blockchain into traditional finance. In Japan, the Financial Services Agency has approved a stablecoin pilot involving megabanks Mizuho Bank, MUFG Bank, and SMBC Bank, scheduled to begin in November 2025 to test digital payments regulated under new financial laws. Meanwhile, in Australia, Australian Securities and Investments Commission (ASIC) Chairman Joe Longo urged the public to embrace tokenization to modernize the market, announcing the reopening of the ASIC Innovation Hub and renewal of licenses for stablecoins and tokenized securities.