Bitfinex Alpha | There are positive signs for BTC and ETH, but it may not be altcoin season yet.

February 27th Bitfinex Alpha | There are positive signs for BTC and ETH, but it may not be altcoin season yet.

Bitcoin ETF inflows remained fairly strong, with net inflows of approximately $600 million, even during the short trading week. Demand for BTC is also surging on centralized exchanges. This follows a massive withdrawal of BTC from Coinbase, resulting in the platform’s lowest Bitcoin holdings since 2017. Redistributing withdrawn BTC to new wallets represents positive investor behavior, as seen in both cases. Coinbase Premium Index and Kimchi Premium Index.

Ethereum (Ether) is also gaining momentum, surpassing $3,000 and recording its highest weekly close in 97 weeks. This boom is stimulating discussion about the possible start of an ‘altcoin season’, a period in which cryptocurrencies replace Bitcoin. Total Ether holdings across all exchanges currently show ETH net withdrawals exceeding 800,000 ETH, showing a strong supply shortage that could push prices further higher.

Using history as a guide, if Bitcoin dominance currently stabilizes above 51%, it could signal the start of a new altcoin season. However, while the top 20 altcoins are seeing an increase in liquidity, some of this can be attributed to a decrease in liquidity for coins outside the top 20.

This change in liquidity dynamics suggests cautious investor sentiment favoring more established and liquid assets, and the market is yet to see a significant recovery for less popular tokens.

The US economy also looks very optimistic. The Publicity Council has issued a more positive outlook, marking a significant reversal from previous warnings of a 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 confirmed that the Fed’s intention is to cut interest rates this year, but that it remains cautious about the resilience of consumer spending despite averting a recession, which could lead to greater inflation.

Recent data further fueled optimism, with unemployment claims falling significantly to a five-week low, while the S&P Global Flash Procurement Managers’ Index showed only a slight slowdown as business activity continued to expand. . The continued resilience of the manufacturing and business sectors also accompanies the overall economic outlook.

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

Have a happy trading week!