The United States and the broader global economy are facing an increasingly fragile macroeconomic backdrop. U.S. inflation has risen to 3.8% year-over-year, per April consumer price index (CPI) data, and real wages have turned negative with long-term Treasury yields climbing to multi-year highs.<\/p>\n
Amid a hostile macro environment, bitcoin (BTC) has pulled back and erased the gains from its early-month rally<\/a>. This correction is further driven by weakening institutional demand and outflows from spot exchange-traded funds (ETFs).<\/p>\n According to this week\u2019s Bitfinex Alpha report<\/a>, the U.S. macro backdrop has shifted toward a \u201chigher-for-longer inflation environment.\u201d Market expectations for Federal Reserve rate cuts have been removed, with rate hikes becoming a more likely scenario as the year progresses.<\/p>\n With the possibility of renewed tightening rising, bitcoin is losing momentum and becoming more vulnerable to exogenous shocks and to a high-for-longer interest rate regime. Unfortunately, this development comes at a time of deteriorating liquidity conditions \u2013 the worst since February.<\/p>\n Analysts said the two primary engines of marginal demand, which are spot ETFs and yield-bearing products like Strategy\u2019s STRC, are currently under duress. ETFs ended their six-week inflow streak last week, recording almost $1 billion in net outflows. On-chain capital flows currently sit at $2.8 billion, far below the $10 billion historically associated with durable bull phases.<\/p>\n \u201cAs market sentiment transitions from acute fear toward persistent uncertainty, analysts say the validity of the current recovery now hinges almost entirely on whether fresh net capital continues entering the market,\u201d analysts explained.<\/p>\n As Bitfinex warned<\/a> two weeks ago, the Bitcoin market is not positioned for sustained upside. Despite the rally toward $82,000, institutional conviction has remained insufficient to absorb macro shocks and rate volatility, leaving the market vulnerable to further correction. Bitcoin is already trading at a two-week low, reflecting a significant structural problem that could worsen due to hostile macro conditions.<\/p>\n At the time of writing, BTC was trading around $76,700, roughly 6.5% below its weekly opening of $82,160. While the asset is testing levels near the monthly open, analysts expect the price to fluctuate between $72,000 and $80,000. Net capital flows, as measured by the Realized Cap 30-Day Net Position Change, will determine whether the broader recovery structure remains intact in the coming weeks.<\/p>\n The post Bitcoin Faces Correction as Institutional Demand Weakens Amid Macro Pressure: Bitfinex<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" The United States and the broader global economy are facing an increasingly fragile macroeconomic backdrop. U.S. inflation has risen to 3.8% year-over-year, per April consumer price index (CPI) data, and real wages have turned negative with long-term Treasury yields climbing to multi-year highs. Amid a hostile macro environment, bitcoin (BTC) has pulled back and erased […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-167862","post","type-post","status-publish","format-standard","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/167862"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=167862"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/167862\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=167862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=167862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=167862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Weakening Institutional Demand<\/h2>\n
Market Vulnerable to Further Downside<\/h2>\n