Bitcoin (BTC) has been oscillating in a narrow trading band of $91,000 to $102,000 for the past 81 days, according to Bitfinex. This trading behavior signifies the crypto traders’ wait-and-watch strategy for discernible macroeconomic signals before making any definitive trading maneuvers.
Noteworthy in Bitfinex’s latest Alpha report is the lack of significant directional momentum for BTC, despite the intensifying geopolitical tensions globally. The crypto asset recorded a meager 4.3% movement from peak to trough in the past week, ending with a marginal 0.82% gain.
Simultaneously, this stagnation period has had considerable ripple effects on altcoins, many of which are grappling with an uncertain market environment. The broader altcoin market has underperformed Bitcoin significantly. For instance, meme coins such as PEPE have seen a precipitous drop – a staggering 46.4% in the past month.
Conversely, the resilience of Bitcoin’s price amid this market turmoil points to a potential redirection of capital from altcoins to the leading cryptocurrency, further cementing Bitcoin’s position as the preeminent digital asset.
Over the past two weeks, the global altcoin market cap has shrunk by $234 billion. Despite this downturn, Bitcoin’s stability attests to a brewing divergence between the pioneer cryptocurrency and the rest of the market. As per Bitfinex’s report, this trend underscores Bitcoin’s increasing correlation with macroeconomic conditions and its evolution as a risk asset.
The Inter-Exchange Flow Pulse (IFP), another pivotal indicator, turned bearish on Feb. 15 for the first time since June 2024. This change suggests a possible risk reduction by traders that could result in further bearish pressure. Nonetheless, with the IFP still hovering above its 90-day moving average, there’s a possibility for a market rebound.
Despite the turbulent price action, Bitcoin investors have sustained some of the heftiest realized losses in the ongoing bull market. Short-term holders (STHs) were hit the hardest, registering $520 million in losses, a figure reminiscent of previous market downturns.
Contrarily, Long-term holders (LTHs) have held onto their positions, reinforcing the belief that Bitcoin’s consolidation phase is a routine correction within a larger bull market.
While positive catalysts, such as Abu Dhabi’s investment in BlackRock’s Bitcoin exchange-traded fund (ETF), have lent some support, traders remain cautious. This reflects a broader trend of market players holding their cards close to their chest in an unpredictable and increasingly interconnected global economic landscape.
