Bitfinex Alpha Report: Correction Following Record Levels in Bitcoin
Bitfinex's 134th Alpha Report comprehensively addresses the recent developments in the Bitcoin market. Last week, Bitcoin reached a record level of $104,000, surpassing the $100,000 threshold for the first time in history. This increase represents a 111% rise from levels below $50,000 during the summer months.
On the other hand, following this rapid ascent, the market experienced its largest pullback since the pre-election selling wave, with Bitcoin experiencing a swift decline of 10% in just eight minutes. A total correction of 14.84% led to the liquidation of over $1.1 billion in the market, including $419 million in Bitcoin long positions.
Despite the high volatility in the markets, stability signals are also being observed. Daily profit measures, which reached $10.5 billion, have declined to $2.5 billion, alleviating the pressure from sellers. The normalization of futures funding rates indicates a decrease in speculative leverage. Continued investor profitability, despite the slowdown in ETF inflows, supports Bitcoin's consolidation above $100,000. The mid-term outlook for Bitcoin maintains its upward momentum alongside the normalization of funding rates and reduced selling pressure.
The resilience of the U.S. economy and developments in the crypto world The Bitfinex Alpha Report also emphasizes the resilient nature of the U.S. economy. While last week's economic data presented some mixed signals, the alleviation of supply chain bottlenecks and strong end-of-year expectations have helped the market maintain a stable outlook despite inflationary pressures.
The crypto world witnessed significant events over the past week. Following President Yoon Suk-yeol's declaration of martial law in South Korea, Korean crypto exchanges reported notable trading volumes. Additionally, the bankrupt Mt. Gox exchange executed a $2.4 billion Bitcoin transfer on the days when Bitcoin surpassed $100,000.
Grayscale drew attention by converting its Solana Trust to enter the race for launching a Solana ETF. These events illustrate that the Bitcoin market is shaped by the dynamic interactions of political, regulatory, and historical factors.