Bitfinex Alpha | BTC and ETH look positive, but alt season has not started yet.

February 26 Bitfinex Alpha | BTC and ETH look positive, but alt season has not started yet.

Both Bitcoin and Ethereum markets look very positive.

Even with the market shortened last week, Bitcoin ETF flows continued to be robust, recording net inflows of approximately $600 million. There is also growing demand for BTC on centralized exchanges, highlighted by a significant withdrawal of over 18,000 BTC from Coinbase, causing the platform to record its lowest Bitcoin holdings since 2017. Redistributing withdrawn BTC to new wallets indicates optimistic investor behavior as follows: In both Coinbase Premium Index and Kimchi Premium.

Ether has also gained significant momentum, surpassing $3,000 and preparing for its best weekly close in 97 weeks. The surge is sparking discussion about the potential start of ‘altcoin season’, the stage where alternative cryptocurrencies outperform Bitcoin. Ethereum exchange holdings across all exchanges show net outflows in excess of 800,000 ETH, indicating a strong supply crunch that could push the price higher.

Using history as a guide, the current stabilization of Bitcoin dominance at just over 51% could herald the start of a new altcoin season. However, while the top 20 altcoins have seen an increase in liquidity, some of this can be attributed to a decrease in liquidity for coins outside the top 20.

This shift in liquidity dynamics suggests cautious investor sentiment in favor of more established and liquid assets and the market’s preference for less mainstream tokens has not yet seen a significant resurgence.

The outlook for the U.S. economy is also rosy. The Conference Board issued a much more positive outlook, representing a significant reversal from previous warnings of an imminent recession. The resilience of the U.S. economy, demonstrated by continued growth in production, employment, and consumer spending, supports confidence in the U.S. economy and suggests that the economy is strong enough to withstand any economic downturn.

Federal Reserve Vice Chairman Philip Jefferson also confirmed that the Fed’s intention is to lower interest rates this year but that it continues to keep a close eye on robust consumer spending, which has prevented a recession but could lead to higher inflation. .

Recent new data underscores the optimism, with initial jobless claims falling significantly to a five-week low and the S&P Global Flash Purchasing Managers’ Index showing a slight slowdown in February as business activity continues to expand. This continued resilience of the manufacturing and business sectors further complements the broader economic outlook.

In cryptocurrency news, Reddit announced plans for an IPO, with which it would disclose investments in Bitcoin and Ether and acceptance of cryptocurrencies for trading virtual goods. Meanwhile, the Law Commission of England and Wales is consulting on draft legislation to recognize cryptocurrencies and NFTs as property and resolve legal issues in the digital asset sector. CME Group also announced plans to launch euro-denominated micro Bitcoin and Ethereum futures next month, expanding access to the cryptocurrency market following the success of similar micro USD-denominated futures.

Have a happy trading week!