Bitfinex alpha | Waiting for a macro signal

April 2nd Bitfinex alpha | Waiting for a macro signal

Bitcoin was cut by nearly 11% in the early 2025, marking its worst mark in nearly a decade. The start of excitement at the January record breakthrough of $109.590, but when the news was good, momentum quickly faded by a wave of sales. Expectations for friendly policies under the elected president of President Trump slowly fade away without any clear legal changes. From the peak, Bitcoin has plummeted to a minimum of $77.041 (los nearly 29%), with mostly fluctuating in regions ranging from $78,000 to $88,000.

Bitcoin domination compared to total cryptocurrency market capitalization

However, in terms of relative strength, Bitcoin still holds the brightest star position! Even with the total capital in the Crypto market plummeted, BTC’s control rate rose to over 61%. This shows that the more dangerous Altcoin-to-Bitcoin capital flows in the context of increased macro instability. Ethereum, Solana and other altcoins have reduced from the peak of the cycle to 35-50%, reinforcing the role of Bitcoin’s “reserve property” in the digital world.

As we enter the second quarter, price fluctuations still rely heavily on macroeconomic signals, particularly Fed policy and ETF flows. Currently, the seller’s signs have been soothing, but liquidity is still tight, so you need a critical catalyst to make a big breakout.

Some bright segments of the US economy are still manifesting, such as a trade deficit that narrows down and spends on durable goods. However, these bright spots are hidden by more serious structural problems. Inflation accelerates faster than expected, partially driven by increased import costs due to new tax rates. Core inflation rose 0.4% in February. This is the biggest monthly increase in over a year, and consumer expectations indicate that inflation will remain high in the future.

Personal income, expenditures, savings (Source: US Economic Analysis)

Meanwhile, growth is slowing down. If government support is eliminated and spending on services (the mainstay of the economy) begins to shrink, actual revenues will hardly increase. Consumer beliefs are declining, with the conference committee index reaching its lowest level in two years, with many Americans predicting that unemployment will rise. These trends reflect an increase in household attention, expressed by an increase in individual savings rates.

Trade policy is still a hotspot. With new tax rates and expectations to add measures in April and 2019, businesses and consumers are coordinating their behavior. The trade deficit narrowed in February, but this skews GDP forecasts following a massive increase in January imports. As a result, growth is expected to slow in the first quarter.

However, the cryptocurrency industry has benefited from an increasingly clear commitment in the legal framework, attracting political support and attention from large organisations.

The US Securities Standing Committee (SEC) has officially withdrawn its lawsuits against industry celebrities Kraken, Consensys and Cumberland DRW. This is a major shift from the previous SEC’s “heavy” approach to more cooperative regulatory laws. This also demonstrates industry transparency and commitment to developing construction rules.

Combining this direction, the SEC’s Crypto Task Force has announced that it will hold four group discussions from April to June 2025. These meetings will focus on key issues such as crypto trading regulations, digital asset deposits, tokens, and future futures. The event is open to the public and expresses the SEC’s desire to create open and transparent dialogues to shape Crypto policies.

At the same time, Trump Media & Technology Group (TMTG) has announced a cult part of launching an ETF series focused on Crypto.com and Crypto. This is a new step for TMTG in the field of financial products to take advantage of the increased demand for digital real estate investment vehicles. The project is still awaiting regulatory approval, but it could significantly increase the highlights of both TMTG and Crypto.com in traditional financial circles.

So, while Q1 isn’t that great, there are still many positive signals in the crypto market. Will Q2 bring about a breakthrough? Let’s wait and see!

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