Bitfinex: Macro Conditions Expected To Influence Bitcoin’s Trend In Coming Weeks
In Brief
Bitfinex predicts that macroeconomic factors, including the performance of the S&P 500, will impact Bitcoin’s price in the upcoming weeks.
Bitfinex released its latest market analysis, highlighting that Bitcoin ended February with a 17.39% decline, marking its worst performance for the month since 2014 and the second-worst in history. The past week saw heightened volatility, with Bitcoin dropping 18.4% to a low of $78,617 before recovering. This sharp drop was primarily driven by record Bitcoin exchange-traded funds (ETF) outflows, which on February 25th reached over $1.1 billion as institutional inflows weakened.
Since Bitcoin hit its lowest point in November 2022 following the collapse of FTX, the cryptocurrency’s bull market corrections have typically ranged between 18-22%. However, the February pullback from January’s all-time high of $109,590 extended to 28.3%, making it one of the most significant corrections since the bear market ended.
On Sunday, March 2nd, President Donald Trump’s announcement of a US cryptocurrency reserve caused a sharp reversal, with Bitcoin rising 20% from its recent lows and over 12% in a single day. However, subsequent selling pressure brought the price back down to around $92,000. With more details about the proposed cryptocurrency reserve still pending, Bitfinex anticipates that broader macroeconomic conditions, including the performance of the S&P 500, will impact Bitcoin’s price in the upcoming weeks. The market remains fragile, and without renewed institutional inflows, sustained bullish momentum could be difficult to achieve.
US Economic Outlook Remains Challenged By Inflation, Declining Consumer Confidence, And Slower Growth
The US economic environment continues to be complex, characterized by persistent inflation, falling consumer confidence, and slower growth. Data for January’s Personal Consumption Expenditures (PCE) showed a 2.5% annual increase in inflation, surpassing the Federal Reserve’s 2% target. Despite the typical post-holiday decrease in household spending, personal income rose by 0.9% in January, adding to inflationary pressures. Rising service costs and new import tariffs are expected to complicate the Federal Reserve’s ability to adjust interest rates, making a rate cut in the near future unlikely.
Consumer sentiment has also weakened, with the Conference Board’s Consumer Confidence Index dropping to 98.3 in February, marking the largest decline in over three years. Concerns about the job market are growing, with more consumers struggling to find jobs and fewer expecting new job opportunities. Trade policies and rising prices for essential goods like food and housing are continuing to erode consumer confidence.
Meanwhile, the US economy grew at a slower rate of 2.3% in the fourth quarter of 2024, down from 3.1% in the previous quarter. The slowdown is attributed to factors such as harsh winter weather, reduced retail activity, and uncertainty over trade policies. While government spending and exports provided some support, consumer spending and business investment weakened. The trade deficit widened, reaching a record $153.3 billion in January, further emphasizing the challenges facing the economy. With ongoing inflationary pressures and low consumer sentiment, the economic growth outlook for early 2025 remains subdued unless key policy adjustments or favorable economic conditions stimulate new momentum.
Bitcoin Hovers Above $91,000, Altcoins Outperform
As of the writing time, Bitcoin is priced at $91,836, reflecting a 7.64% increase over the past 24 hours. During this time, Bitcoin’s value fluctuated between a low of $85,040.21 and a high of $95,043.44, according to CoinMarketCap. Despite the volatility, Bitcoin’s dominance dropped by 0.14%, suggesting that altcoins outperformed the flagship cryptocurrency during this period.
The overall cryptocurrency market capitalization experienced a notable increase of over 8.02% in the last 24 hours, pushing it back above the $3 trillion mark. Additionally, the total market volume surged by 225%, reaching $214 billion.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, 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 cryptocurrency, zero-knowledge proofs, 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.
