Lawrence Jenger January 8, 2025 08:20
According to Bitfinex Alpha, supply is tightening as Bitcoin prices hit new highs, giving a bullish outlook for the crypto market.
Bitcoin (BTC) price has recently crossed the $108,000 mark, indicating solid market performance as noted in the first 2025 edition of Bitfinex Alpha. Bitcoin’s tight supply suggests a bullish medium-term outlook, although a market correction may be expected in Q1 2025.
Bitcoin supply dynamics
The liquidity reserve ratio, a measure that tracks the current supply period, has fallen dramatically from 41 months to just 6.6 months. This indicates that the Bitcoins available on the market can only meet demand for a limited period of time, highlighting the rapid depletion of supply. This trend was particularly evident during the strong price increases in the first and fourth quarters of 2024.
Miner activities and market impact
Bitcoin miners have traditionally been known to sell large amounts of Bitcoin during halving periods, but since April 2024, they have significantly reduced their exchange margins. The amount of Bitcoin sent to exchanges is at its lowest level in years, as miners are saddled with large amounts of unrealized profits. To “save” rather than sell.
Overall selling pressure from miners, long-term investors, and other groups has decreased significantly, mitigating the effects of the recent market correction. This reduction in supply pressure is contributing to Bitcoin’s continued strong market performance.
US economic situation
After 2024, the U.S. economy showed signs of recovery, but some sectors remain uncertain. The labor market remained strong, with jobless claims dropping to an eight-month low of 211,000 by the end of December, unexpectedly increasing confidence in the economy’s resilience. This unexpected decline, along with continued declines in claims, does not signal a broader recession but rather a gradual cooling of the labor market. Good labor data boosted market sentiment, pushing the dollar higher and supporting modest gains on Wall Street.
Conversely, the construction sector presents a more gloomy picture, with spending stagnant in November following moderate growth in October. Increases in single-family home construction were offset by declines in multifamily housing and public investment. Expected changes in fiscal policy under the next administration are pushing mortgage rates higher, weighing on housing demand and new projects. The construction industry faces attendant challenges, including potential tariffs, labor shortages and trade uncertainty, which could hinder sustainable growth despite a potential boost from future infrastructure spending. There is.
Development of the world and virtual currency market
Meanwhile, the manufacturing industry remains under pressure, although it is showing signs of recovery. The Purchasing Managers Index (PMI) rose to 49.3 in December, the highest level since March, but still below 50, the benchmark for growth. Despite improvements in production and new orders, the sector has struggled to fully recover from a prolonged slump due to rising borrowing costs following the last Federal Reserve interest rate hike. While recent interest rate cuts and the prospect of fiscal stimulus from the incoming administration offer a glimmer of hope, concerns about trade policy and volatile global demand continue to cloud the sector’s outlook.
In other cryptocurrency news, U.S. Congressman Mike Collins revealed his investment in the cryptocurrency Ski Mask Dog (SKI), announcing that the purchases ranged from $1,001 to $15,000. His filing is one of the first for 2025 and highlights the increasing intersection of digital assets and politics, raising questions about transparency and regulatory oversight. are. Meanwhile, defunct cryptocurrency exchange FTX has begun a restructuring plan to compensate users affected by its 2022 bankruptcy. Customers who file claims will have 60 days to receive a refund, with priority given to smaller claims. Additionally, MicroStrategy announced plans to raise up to $2 billion through the issuance of perpetual preferred stock. The initiative is part of the company’s ambitious “21/21 Plan” to set aside $42 billion over three years for Bitcoin acquisitions, and ranks it as the largest Bitcoin holder with over 145,000 BTC. solidify.
For more information, please visit Bitfinex Alpha.
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