Bitfinex: Crypto Market Caution Grows, Yet Bitcoin Remains Resilient
In Brief
Bitfinex has noted that, despite macroeconomic pressures, Bitcoin remains resilient, but with the Fed signaling fewer rate cuts and tightening financial conditions, it may experience more short-term volatility.
Bitfinex has published its market analysis, reporting that Bitcoin fell to a low of $91,430 last week, extending its correction after reaching a record high of $108,100 on December 17th last year. The decline continued into Monday, and Bitcoin is now down over 15%. This drop is largely attributed to growing market caution, driven by rising US Treasury yields and persistent outflows from spot Bitcoin exchange-traded funds (ETFs). Notably, ETFs experienced seven days of outflows within the past 12 trading days, with $718 million exiting in just two days—marking a sharp reversal from the $2 billion in inflows observed earlier in January.
The surge in US Treasury yields, which recently hit a 14-month high of 4.79%, has drawn institutional money away from riskier assets like Bitcoin. Historically, Bitcoin tends to react quickly to yield increases, but the current impact has been exacerbated by news that the US Department of Justice plans to liquidate $6.5 billion worth of seized Bitcoin.
Despite these macroeconomic pressures, the firm notes that Bitcoin remains resilient, still up 42% since the US election and outperforming equities, which have erased post-election gains. However, with the Federal Reserve signaling fewer rate cuts and financial conditions tightening, Bitcoin may experience more short-term volatility. Optimism surrounding pro-crypto regulation under President-elect Donald Trump’s incoming administration could help limit deeper losses and maintain Bitcoin’s strong long-term position.
US Economy Ends 2024 Strong, Driven By Job Growth And Services Sector Expansion
The latest economic data reveals that the US economy finished 2024 with a resilient labor market and unexpected growth in the services sector. In December, the labor market added 256,000 nonfarm jobs, surpassing forecasts and marking the strongest monthly gain since March. Key industries like healthcare, retail, and leisure led this growth, while unemployment fell to 4.1% and wages increased by 3.9% year-over-year. This strong job growth, coupled with steady wage gains, supports strong consumer spending, which remains a key driver of the US economy. Additionally, the resilient labor market has lessened the pressure on the Federal Reserve to cut interest rates further, postponing any potential reductions until mid-2025.
The services sector also contributed positively, with the Institute for Supply Management (ISM) reporting a rise in its Purchasing Managers’ Index (PMI) to 54.1 in December. This growth was driven by increases in production and new orders, indicating continued expansion across industries like finance, education, and hospitality. However, employment in the services sector dipped slightly, revealing some sector-specific challenges within the labor market.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
