According to Bitfinex experts, Bitcoin is mimicking conventional markets, and the cryptocurrency markets have "gone through a period of contraction" as a result of its lack of price momentum.
Analysts at cryptocurrency exchange Bitfinex said that after almost 90 days of tight range-bound trading, Bitcoin has dropped below $91,000 and is at a "critical juncture."
In the February 24 Bitfinex Alpha report, analysts stated that Bitcoin $88,749 "remains at a critical juncture after nearly 90 days of consolidation" and has been trading between $91,000 and $102,000 for around three months due to a stop in market momentum.
"A period of contraction and consolidation across almost all major crypto assets has resulted from the lack of momentum necessary for a sustained breakout," the experts stated.
According to CoinGecko, the price of bitcoin has dropped more than 4.5% in the last day to less than $91,000, its lowest level since late November. In the same day, the entire cryptocurrency market has likewise dropped 8%, from over $3.31 trillion to about $3.09 trillion.
The market decline coincides with Trump's declaration that his proposed 25% tariffs on Canada and Mexico "are going forward on time, on schedule" during a press conference with French President Emmanuel Macron on February 24.
According to CoinGlass statistics, the decline in the cryptocurrency market caused a wave of liquidations, with approximately $961.65 million being liquidated in the last day, divided between $891.52 million long bets and $70.14 million short bets.
With more than $277 million lost in the last day, long Bitcoin bets accounted for the majority of liquidations.
According to Bitfinex experts, Bitcoin is becoming more and more correlated with traditional markets, and "a similar stagnation in traditional financial markets" caused by "macro-driven uncertainty" is a significant factor influencing a stalled cryptocurrency market.
The last five trading days have seen a 2.3% decline in the S&P 500 and a 4% decline in the Nasdaq Composite. According to Bitfinex, "risk assets in general, including cryptocurrencies, have been affected by the suppression of the broader equity market."
Institutional demand for Bitcoin through spot exchange-traded funds has also "slowed significantly," according to the researchers, with outflows reaching $552.5 million on each trading day for the week ending February 21.
Related: Analyst: Bitcoin's $160 billion net capital increase is bullish despite a 76% decline in daily transfer volume
According to Bitfinex, declining consumer confidence and growing inflation expectations pose a threat to the US economy as a whole.
A February 21 University of Michigan Consumer Survey was cited, indicating that "growing concerns about inflation and economic uncertainty" that could impede spending caused US consumer confidence to drop 10% from January to a 15-month low in February.
Additionally, Bitfinex experts claimed that President Donald Trump's numerous proposed tariffs "are adding to inflationary pressures" and have reversed some of the gains gained in the last two years in terms of deflation.
The above content is based on the article by William Suberg from Jesse Coghlan
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The article from Cointelegraph discusses Bitcoin’s current price movement, specifically noting its critical juncture as it falls below $91,000 on Bitfinex. This marks a significant shift in the market, with Bitcoin encountering resistance at a key price point. As the world's largest cryptocurrency struggles to break through resistance, it raises questions about its potential trajectory and the broader market conditions.
One key takeaway from this scenario is the uncertainty surrounding Bitcoin's future. Despite the bullish trend earlier in the year, Bitcoin’s price seems to have reached a tipping point. The pullback below the $91,000 level is causing some investors to re-evaluate their positions, as it may indicate a potential correction or consolidation phase.
The article also points out the increasing role of institutional investors, with many becoming more active in the market. While this might be seen as a positive, it also introduces new dynamics that could influence Bitcoin's price in unexpected ways. As more institutional money enters the market, it is possible that the volatility we’ve seen in Bitcoin's price will either continue or amplify. On the other hand, institutional investors’ long-term outlook may help stabilize Bitcoin’s value, which might prove positive for its future growth.
Furthermore, the discussion touches on how Bitcoin's price movement impacts other cryptocurrencies and the broader digital asset market. Bitcoin's price often leads market sentiment, so this period of uncertainty could potentially trickle down to altcoins, especially if the leading cryptocurrency enters a bear phase or faces further corrections.
In conclusion, while Bitcoin’s current dip below $91,000 may seem concerning, it is important to recognize the broader market dynamics. As institutional interest grows and Bitcoin remains a central figure in the crypto space, its short-term fluctuations might just be part of a larger, longer-term trend. Investors should remain cautious and closely monitor market developments, keeping in mind that Bitcoin’s performance will likely continue to have a significant influence on the entire digital asset market.
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