Bitfinex Alpha #164 - Community Summary

Bitfinex Alpha: Altcoins Rally as Bitcoin Pauses After Reaching New ATH

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Or explore the key highlights from this edition below:

Altcoin Surge Follows Bitcoin’s Pause, Signalling Mid-Cycle Market Rotation

Bitcoin hit a fresh all-time high of $123,120 before entering sideways consolidation, marking a 65.3% rally from April lows. As Bitcoin paused, altcoins rallied aggressively, with major large caps like Ethereum and XRP outperforming for the first time in months. This momentum shift caused a 6.9% drop in Bitcoin dominance, the largest since December 2023, indicating a rotation into higher beta assets typical of mid-cycle expansions.

Despite Bitcoin’s consolidation, 95% of holders trade above their realised cost basis, meaning most supply remains in profit. This historically signals late-stage bullish cycles where short-term holders intensify profit-taking. Long-term holders began distributing coins for the first time since early 2024, while ETFs, retail, and new market participants absorb this supply. This natural rotation reflects cycle maturity but increases short-term fragility if buyer momentum fades.

Bitcoin briefly pulled back to $115,820 after testing the +1 standard deviation band above the short-term holder cost basis at $120,000, a typical distribution zone. The next resistance is near the +2σ band at about $136,000, associated with overbought conditions and peak market exuberance. Sustaining momentum to this level likely requires renewed institutional inflows or strong macro tailwinds to offset profit-taking pressure. Currently, altcoins hold the baton, but Bitcoin’s structural strength remains solid, entering a more delicate, reactive phase.

Tariff-Driven Inflation Surfaces Amid Mixed US Economic Signals, Crypto Adoption Expands

Tariff-driven inflation is becoming clearer, with June’s CPI rising 0.3% and core inflation up 2.9% annually, driven by higher import costs from China and other key trading partners, pushing prices on consumer goods like appliances and apparel. Shelter and services inflation eased slightly, but rising upstream producer prices raise risks of “stagflation-lite,” leading the Fed to pause rate cuts for now.

US retail sales rebounded 0.6% in June, helped by auto sales and preemptive consumer purchases ahead of tariff hikes, though real consumption gains remain marginal. Labour market data shows a mixed picture: initial jobless claims fell, but continuing claims and slower wage growth hint at potential softening.

In crypto, institutional adoption surged as Strategy (formerly MicroStrategy) became the first public company to hold over 600,000 BTC, valued above $73 billion. Meanwhile, Hungary imposed strict penalties for unlicensed crypto trading, forcing major platforms to suspend services, and Kazakhstan is considering crypto allocations within its sovereign reserves.

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