According to the latest Bitfinex Alpha report, macroeconomic uncertainty keeps Bitcoin (BTC) in a tough price range as liquidity continues to be contracted due to speculative interest and declining trading volumes.
The company said That large investor interest needs to go back to push Bitcoin from its current range. I emphasized that Bitcoin has temporarily gained momentum after opening at nearly $82,791 last week, stemming from speculation surrounding former President Donald Trump’s speech at the Digital Assets Summit.
However, despite positive comments, the rally was short-lived, making the event a “new selling” moment for the market. This recovered to boost the week by 4.2% after an optimistic FOMC meeting after temporarily pushing BTC to $81,366.
The outlook remains dark
Despite modest weekly profits, the underlying market indicators suggest that they will reduce momentum. The report noted that volatility and liquidity have reduced, and that Bitcoin has strengthened its tendency to respond directly to macroeconomic developments.
Investors remain divided in the direction of monetary policy, and there is no consensus on whether the Federal Reserve will adopt a dove or hawkish stance. This lack of clarity reduced speculative beliefs and increased Bitcoin’s sensitivity to external policy clues.
One metric that reflects the current market structure is the “hot supply” of Bitcoin, a measure of liquid capital defined by coins that move each week. After peaking in December 2024, Hot Supply signed from 5.9% to just 2.8% of total circulation supply.
This 50% or more reduction highlights a widespread decline in short-term trading activities and market participation, suggesting a setback in speculative capital and an increase in investor attention. Investors are reducing coins and aggressive trading behavior is declining.
Historically, such a decline in liquid supply tends to precede the long-term market bottom, but the report refrains from providing forward-looking statements beyond the current environment.
In tandem, the inflow of Bitcoin exchanges (representation of short-term trading intentions) fell from 58,600 BTC per day in December to 26,900 BTC based on a rolling average over 14 days.
This will reduce coins sent to exchanges by 54%, reinforcing the broader trend in modest market activity. Outside a short break in range-bound trading, exchange-related flows have steadily declined towards the end of February, when BTC falls below the $91,000-$102,000 corridor.
Fluidity conditions
The consistency between lower supply at high temperatures and lower exchange inflows indicates a lower demand side pressure.
When traders send fewer coins to trading platforms, the likelihood of recent sales is reduced, suggesting that market participants are adopting a waiting approach.
This dynamic reflects broader risk-off sentiment, with investors refraining from actively deploying capital without clear macroeconomic signals.
The decline in capital flows into the trade ecosystem suggests that institutional and retail players are similarly reluctant to launch new positions without greater belief.
Bitcoin prices continue to be shaped more by liquidity conditions and changing economic sentiments worldwide than by the development of endogenous crypto markets.
Liquidity contraction and lower speculative behavior are key indicators of the current cautious attitude of the digital asset market as a whole.
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