May 06 Bitfinex Alpha | BTC tumultuous but volatility eases
In the Bitcoin markets, we continue to see traders seeking price equilibrium, as they adapt to the new supply rate of BTC in the market from mining and absorb messages increasingly complex data on inflation and interest rates from macroeconomic indicators.
BTC fell last week to a new local lowbefore suffering a sharp correction, and over the past week has seen fluctuating market sentiment, even as major altcoins remained stable above their April lows.
A key development has been the activity seen among Bitcoin whales, as indicated by Exchange Whale Ratio, which suggests potential selling pressure, as this cohort of investors has been seen putting Bitcoin on exchanges, with the possibility that they are about to sell. That said, historically, most of the aggressive selling came from the most price-sensitive short-term holders, i.e. those who had held BTC for 155 days or less. For this group, the realized price is $58,700, and in current markets this appears to be an important support level. Judging by the short-term holder Market value/realized value ratiosales seem to be decreasing.
Further support can also be seen in the fact that this post-halving period has resulted in a notable decrease in volatility. THE significant drop in Bitcoin implied volatility suggests the market is stabilizing, with reduced expectation of drastic price movements. Volatility risk premiums for Bitcoin and Ethereum have declined significantly, indicating a realignment of market expectations towards a more stable and predictable environment.
This comes as the current economic landscape requires the Fed to continue its cautious and deliberate approach, keeping rates between 5.25 and 5.50 percent, and now also slowing the pace of growth. reduction of assets on its balance sheet, and therefore increase the demand for Treasury bills.
Inflation remains persistent with the latest data from employment cost index is growing faster than expected as tight labor markets mean employees can demand higher wages due to inflation. However, job availability has not increased accordingly, causing consumer confidence in the job market to plummet.
Indeed, in support of this hypothesis, a report from the Bureau of Labor Statistics showed a drop in job offers at their lowest level in three years and a deceleration of wages.
In crypto news last week Changpeng Zhao, founder of Binance was sentenced to four months in prison for money laundering and violating sanctions; and Hong Kong saw the start of new spot Bitcoin ETFs, marking a significant step forward in the region's adoption of crypto assets, although initial adoption was slow.
And finally, Tether, the world's largest stablecoin issuer, reported a Record profit of $4.52 billion in the first quarter of 2024and revealed net shareholders' equity of $11.37 billion, reflecting its strong financial position.
Have a good trading week.