Bitfinex alpha | The market lost momentum when cows hesitated

March 12th Bitfinex alpha | The market lost momentum when cows hesitated

After a temporary recovery of $90,000 last week, Bitcoin quickly rushed to $85,000 to $92,000 when uncertainty continued to cover the market. Earlier last week, prices surged by rumors from the US Bitcoin Reserve Fund and the White How Script Conference, but when news officially launched, traders quickly turned the market around with a profit in the “sell news” style. If the $3 billion Bitcoin and Ethereum option contract expires on Friday, the fluctuations will be amplified and a series of strong price movements.

The actual volatility of the Bitcoin option is over 80%. This indicates that the market is very sensitive to macro changes. The expected volatility also increased by 35.7% when traders actively adjusted their position prior to the meeting. Chain data shows that many traders have suffered major losses over the past week, with actual losses up to $888 million per day. February 28th and March 4th recorded the biggest losses in this cycle. While this may be a progressive, stable signal for the market, geopolitical and macroeconomic concerns remain a major barrier.

Bitcoin’s output profit ratio. (Source: Bitcoin MagazineMetrics)

Bitcoin Power Ratio (Used Output Profit Ratio (SOPR) falls into the first loss area since October 2024, indicating sales off due to financial pressure. The SOPR index is for short-term investors to record the second-largest negative level in this cycle at 0.95, making it a clear indication that market novices are surrendering. Historically, SOPR indicators above 1.0 have shown trends in accumulation and price rise, but maintaining this level can lead to additional discount risk. If the market structure is still unharmed, buyers will start to return to current prices and SOPR will become a key indicator to be monitored in the coming weeks.

Monthly changes in unemployment and non-farm pay salaries (source: Labor Statistics Division)

Macroeconomic indicators do not point to a clear direction. The US labor market remains strong with 151,000 new jobs in February, but government employment cuts have led to an unemployment rate rising to 4.1%. Salaries have risen sharply, but labor costs are high and inflationary pressures could hope to see Fed cut rates multiple times this year.

Labor productivity rose 1.5% in the fourth quarter of 2024, helping companies offset costs without additional recruitment, but long-term risk increases if work is delayed. Meanwhile, manufacturing is faced with many fluctuations when new taxes increase costs and delay orders, raising concerns about their ability to maintain growth in the context of volatile trade.

The fact that US President Donald Trump has established a strategic Bitcoin Reserve and owns more than 187,000 BTC worth $13 billion marks a historic turning point in holding citizens’ wealth from a confiscated Bitcoin auction. His government has also promoted the legislation of stubcoin before August, ending restricted policies such as the Chalk Point 2.0 campaign, and strengthening the US’s position as a global leader in crypto. A strategic Bitcoin reserve plan allows the US to hold Bitcoin as a long-term financial asset instead of selling it, which could affect global crypto policy.

Meanwhile, the SEC’s Crypto Task Force held a round discussion on March 21st to clarify the security status of digital assets and demonstrate the shift towards more structured management guidance. In Japan, the Liberal Democrats have implemented cryptocurrency-friendly tax reforms, reducing capital taxes to 20%, and classifying cryptocurrencies as separate assets. The reform also proposes tax payments for cryptocurrency transactions, applies fair tax rates to derivatives, and encourages investment in digital assets.

I wish traders a good week!

Don’t forget to follow the bitfinex Vietnam Community telegram, Twitter & Facebook To update articles, information and events as soon as possible!