Over the past week, bitcoin ($BTC) has traded between $62,000 and $72,000. Despite bullish conditions not being fulfilled, the leading digital asset has managed to hold its floor.
Analysts at the crypto exchange Bitfinex revealed in the latest Bitfinex Alpha report that the current crypto market environment is being reshaped by shifting Federal Reserve expectations and inflation risks. These factors have created near-term pressure for risk assets like gold and $BTC; regardless, the floor of the latter has remained intact.
Bitcoin in Limbo
On-chain data shows that neither bulls nor bears are firmly in control. With $BTC trading within the $62,500–$72,000 consolidation zone, the market appears to be in limbo, rather than a sustained bearish phase.
Bitfinex analysts outlined two bullish tests for a potential sustained uptrend on lower timeframes, but they all failed. The tests were a sustained spot exchange-traded fund (ETF) market bid and a calming of the derivatives complex, with funding moving from neutral to negative.
In the face of the failure, there are now two opposing forces pulling at market sentiment on inflation: the potential of softening energy risks following a peace deal between the U.S. and Iran and the Fed’s focus on inflationary heat rather than the immediate relief in crude prices.
For $BTC to continue holding its floor, the Fed needs to be willing to “hold its nerve,” according to experts. It remains to be seen how the market will move until this happens.
Fragile Bullish Conditions
Analysts further explained that ETFs are currently the primary proof of the market’s indecisiveness. These products have failed to establish a bullish trend and have instead reverted to net redemptions. The total volume traded across ETFs has declined significantly, but it is still not low enough to support a bearish case. So they are also in a state of limbo, and not a bear market.
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Nevertheless, a structural perspective indicates that $BTC is trading below the active-investor cost basis. The $68,500–$72,000 zone remains the primary overhead supply band, and analysts expect further compression within the $62,000–$64,000 range, or broader movements between $60,000 and $70,000 in the coming days.
As the market gives in to either the bulls or the bears, the $68,500–$72,000 range is expected to act as significant resistance, as many investors in this range are at a loss and are likely to sell at break-even. So, $BTC now has three key levels: the $54,000 foundational floor, the $72,000 break-even point for recent buyers, and the $77,200 hurdle for short-term holders.
