Despite weak bullish signals, Bitcoin maintains key price floor: Bitfinex Alpha

On-chain data shows that neither the bulls nor the bears are firmly in control, and the market appears to be stalled rather than in a sustained bear phase.

Over the past week, Bitcoin (BTC) has traded between $62,000 and $72,000. Despite the bullish conditions not being met, major digital assets have managed to maintain their bottom prices.

Analysts at crypto exchange Bitfinex revealed in the latest Bitfinex Alpha report that changes in Federal Reserve expectations and inflation risks are reshaping the current crypto market environment. These factors are creating short-term pressure on risk assets such as gold and BTC. Nevertheless, the floor of the latter remains intact.

Bitcoin in limbo

On-chain data shows that neither the bulls nor the bears are firmly in control. BTC is trading within the $62,500 to $72,000 consolidation zone, and the market appears to be stuck rather than in a sustained bearish phase.

Bitfinex analysts outlined two bullish tests for the possibility of a sustained uptrend on a shorter time frame, but they all failed. The test was continued bidding in the spot exchange-traded fund (ETF) market and subsidence in the derivatives complex, with funding moving from neutral to negative.

In the face of this failure, there are now two opposing forces pulling market sentiment toward inflation. That is the potential mitigation of energy risks associated with the U.S.-Iran peace deal and the Fed’s focus on overheating inflation rather than immediately easing oil prices.

Experts say the Fed needs to be “cautious” in order for Bitcoin to remain on the floor. We still don’t know how the market will behave until that happens.

Fragile bullish situation

The analysts further explained that ETFs are currently the main evidence of market indecision. These products have failed to establish a bullish trend and are instead reverting to net redemptions. While overall ETF trading volume has declined significantly, it is still not low enough to support a bearish situation. So they are not in a bear market, but in a deadlock.

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Nevertheless, from a structural perspective, we see that BTC is trading below the cost basis of active investors. The $68,500-72,000 zone remains the primary indirect supply range, with analysts expecting further compression within the $62,000-64,000 range or broader price action between $60,000 and $70,000 in the coming days.

If the market succumbs to either the bulls or the bears, we expect significant resistance to occur in the $68,500 to $72,000 range. This is because many investors in this range are incurring losses and are likely to sell at break-even. Therefore, BTC currently has three important levels. A $54,000 fundamental floor, a $72,000 break-even point for recent buyers, and a $77,200 hurdle for short-term holders.