Bitfinex: Smart money moves first, price follows later; volume & OBV reveal institutional flows.

Bitfinex: Smart money moves first, price follows later; volume & OBV reveal institutional flows.

Bitcoin has shown signs of recovery, reclaiming its range lows after a recent dip. According to the latest Bitfinex Alpha report, the cryptocurrency has returned to a "warm but not overheated zone," suggesting that macroeconomic events will determine its next direction over the next few weeks [1].

The recovery is evident in the U.S. spot exchange-traded fund (ETF) market. At the beginning of the month, spot ETF inflows turned negative, with investors withdrawing at least 1,500 BTC across four consecutive trading days. However, the market saw a positive reversal between August 6 and 8, with inflows totaling more than $770 million. Even August 11 recorded positive flows exceeding $178 million. These inflows, supported by consistent BTC accumulation by crypto treasury companies, are the primary catalyst behind the market’s latest strength [1].

Bitcoin rallied close to its all-time high on Monday, climbing from $118,000 to $122,100. Although it had fallen to the $118,000 range at press time, demand from ETFs and crypto treasury companies could keep its value afloat [1].

Between Range Highs and Lows
Furthermore, Bitfinex has spotted a growing relationship between ETF flows and macroeconomic conditions in recent months. Analysts say the crypto market is increasingly becoming sensitive to macro events, and this week would be no different as Consumer Price Index (CPI) and Producer Price Index (PPI) data are due in the next few days [1].

Bitcoin continuing with its current momentum largely depends on macro releases – the asset could either break to new highs or retest recent lows. Bitcoin faces the possibility of retracing to $110,000 in the near term. "Even so, the broader structural outlook remains constructive, underpinned by sustained institutional accumulation, expanding treasury adoption, and resilient spot demand," analysts added [1].

Meanwhile, the market shows a significant split between profit-taking and loss-realisation among coins currently in motion. About 70% of short-term holder supply is still held in profit, while the proportion of assets being sold for profit has eased to 45%. Market experts insist BTC will continue to oscillate between range highs and lows, the asset’s price moving above and below the cost basis of fresh buyers [1].

Bitcoin’s Long-Term Holder Trends May Indicate Future Market Shifts and Impact Price Movements
Bitcoin's long-term holders are reducing their balances, suggesting that institutional investors are taking profits and potentially preparing for a new cycle. This trend could lead to increased volatility and price movements in the near future [3].

Experts Question 0.01% Bitcoin Ownership Statistic Amid Data Discrepancies and Market Implications
Only 0.01% of the global population owns Bitcoin, indicating that the cryptocurrency is still largely held by a small group of investors. This concentration of ownership could have significant implications for the market, potentially leading to increased price volatility and a higher risk of market manipulation [3].

Conclusion
The recent influx into Bitcoin and Ethereum ETFs highlights a turning point for digital assets, with major players like BlackRock paving the way for their legitimization in traditional finance. As interest strengthens, the potential for these cryptocurrencies to become cornerstones of future financial markets seems promising.

References:
[1] https://www.xt.com/en/blog/post/bitcoin-in-warm-but-not-overheated-zone-what-could-happen-next-bitfinex-alpha
[2] https://en.coinotag.com/blackrocks-ishares-ethereum-trust-drives-record-1-billion-inflow-indicating-growing-institutional-interest-in-ethereum/
[3] https://blog.bitfinex.com/education/chart-decoder-series-volume-obv-the-smart-money-tracking-system/