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Welcome to the first edition of Bitfinex alpha 2025. With a recent Bitcoin All-Time High of over $108,000, we see a market that still looks strong. While a deeper Q1 2025 pullback is possible, broader supply tightening and strong feeling among miners show that Bitcoin is well positioned for further gains in the medium term.
The Liquidity Index Ratiowhich tracks how long existing supply can meet demand, fell from 41 months in October to just 6.6 months. This indicates a rapid tightening of available Bitcoin liquidity, and has been particularly evident during the strong rallies seen in Q1 and Q4 of 2024.
Bitcoin miners, historically significant sellers during half-years, are also slowly the BTC will flow to exchanges from April 2024. Miner-to-exchange flows are at multi-year lows, as miners operate with strong unprofitable profits, and hold the BTC rather than sell
The overall selling weight is across miners, long-term holders, and other groups greatly discounted. The reduction in supply entering the market has reduced the impact of the recent correction.
The US economy closed 2024 with continued evidence of an economy tolerancehowever, this is also mixed with some lingering uncertainty across some key sectors. The labor market remained strongas jobless claims fell to an eight-month low of 211,000 at the end of December, defying expectations and reinforcing confidence in the economy's strength. The unexpected decline, along with a continued decline in applications, suggests that the labor market is cooling at a measured pace without mark wider decline. The positive jobs data added to market sentiment, strengthening the dollar and encouraging modest gains on Wall Street.
In contrast, however, the construction sector showed more satisfactory picturewith consumption increasing in November after a slight increase in October. Gains in single-family housing construction were offset by declines in multi-family housing and public investment. Elevated mortgage rates, driven by market expectations of fiscal policy changes under the incoming administration, are weighing on housing demand and new projects. The construction department additional headaches are facedincluding possible tariffs, job shortages, and trade uncertainty, which could hinder sustained growth despite potential increases from core costs future structure.
Meanwhile, the manufacturing sector showed signs of recovery but remained under pressure. The Purchasing Managers' Index (PMI) it rose to 49.3 in December, the highest since March, but still below the growth rate of 50. Although production and new orders improved, manufacturing has been struggling to make a full recovery from prolonged contraction exacerbated by higher borrowing costs from earlier Federal Reserve rate hikes. Recent rate cuts and the prospect of fiscal stimulus under the incoming administration offer a glimmer of hope, but concerns over trade policies and volatile global demand continue to cloud the sector's outlook .
In cryptocurrency news last week: US Congressman Mike Collins published investments in the cryptocurrency Ski Mask Dog (SKI), with purchases ranging from $1,001 to $15,000 in total. Its filing, one of the first for 2025, underscores the growing intersection of digital assets and politics, raising questions about transparency and regulatory control. At the same time, the crypto exchange FTX is useless has begun their reorganization plan to bring back former customers affected by the 2022 crash. Customers who submit claims can expect refunds within 60 days, with smaller claims given priority. So is MicroStrategy reveal plans to raise up to $2 billion through preferred stock offerings. This campaign is part of their ambitious “21/21 Plan” to get $42 billion over three years to acquire Bitcoin. Already the largest corporate owner of Bitcoin, with more than 145,000 BTC, the company continues to consolidate its position in the digital asset market.
Have a great trading week!
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