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Bitfinex analysts said Bitcoin is mirroring traditional markets, and its lack of price momentum has “led to a period of contraction” for crypto markets.
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Bitcoin fell under $91,000 and is at a “critical juncture” after the cryptocurrency has seen nearly 90 days of tight range-bound trading, according to analysts at crypto exchange Bitfinex.
Bitcoin (BTC) has traded between $91,000 and $102,000 for around three months amid a stall in market momentum and “remains at a critical juncture after nearly 90 days of consolidation,” analysts said in the Feb. 24 Bitfinex Alpha report.
“The momentum required for a sustained breakout has been lacking, and this has led to a period of contraction and consolidation across almost all major crypto assets,” the analysts said.
Bitcoin has fallen over 4.5% in the past 24 hours, hitting a low of under $91,00 — its lowest price since late November, according to CoinGecko. The wider crypto market has also fallen 8% in the past day, from over $3.31 trillion to around $3.09 trillion.
The crypto market fall sparked a cascade of liquidations, with over $961.65 million liquidated in the last day, split between $891.52 million long bets and $70.14 million short bets, CoinGlass data shows.
Long Bitcoin bets took the lion’s share of liquidations, with over $277 million wiped out in the past day.
Bitcoin long bets led the crypto market liquidations in the past day, which has neared $1 billion in total. Source: CoinGlass
Bitfinex analysts said that Bitcoin is increasingly correlating with traditional markets, and a major factor affecting a stalled crypto market is “a similar stagnation in traditional financial markets” that’s been brought about by “macro-driven uncertainty.”
The S&P 500 has fallen by 2.3% in the last five trading days, while the Nasdaq Composite has dropped 4% over that same time. Bitfinex said that the “broader equity marketʼs suppression has affected risk assets in general, including cryptocurrencies.”
The analysts added that institutional demand for Bitcoin through spot exchange-traded funds has also “slowed significantly,” seeing outflows on every trading day for the week ending Feb. 21 totaling $552.5 million.
Related: Bitcoin daily transfer volume drops 76%, but $160B net capital rise is bullish — Analyst
Bitfinex said that the wider US economy is challenged by weakening consumer confidence and rising expectations of further inflation.
It noted a Feb. 21 University of Michigan Consumer Survey, which found that US consumer sentiment in February fell 10% from January to a 15-month low which reflected “growing concerns about inflation and economic uncertainty” that could slow spending.
Bitfinex analysts also said that a raft of proposed tariffs from President Donald Trump “are adding to inflationary pressures” and have undone some progress made in disinflation over the past two years.
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This article first appeared at Cointelegraph.com News
