Bitfinex analysts have observed that Bitcoin's price movement is increasingly mirroring traditional markets, with a notable lack of upward momentum. This stagnation has plunged the cryptocurrency market into a "contraction phase."
Bitcoin at a "Critical Juncture" After 90 Days of Consolidation
According to Bitfinex's latest Alpha report published on February 24, Bitcoin (BTC) has been trading within a narrow range of $91K–$102K for nearly three months. The analysts emphasized that the asset now faces a "critical juncture" after this prolonged consolidation period.
Key takeaways from the report:
- Market momentum stagnation: Bitcoin’s inability to sustain breakout momentum has led to a contraction across major crypto assets.
- Price decline: Bitcoin dropped over 4.5% in 24 hours, hitting a low below $91K—its lowest level since late November 2025.
- Broader market impact: The total crypto market cap fell by 8% to $3.09 trillion, with $961.65 million in liquidations (89% from long positions).
👉 Why is Bitcoin’s price volatility increasing?
Factors Contributing to Bitcoin’s Stagnation
1. Correlation with Traditional Markets
Bitfinex highlights Bitcoin’s growing ties to traditional finance, where macroeconomic uncertainty has caused similar stagnation. Recent declines in the S&P 500 (-2.3%) and Nasdaq Composite (-4%) reflect broader risk-asset weakness.
2. Slowing Institutional Demand
Institutional interest via Bitcoin spot ETFs has "slowed significantly," with outflows totaling $552.5 million in the week ending February 21.
3. Inflation and Consumer Sentiment
- Consumer confidence: A University of Michigan survey revealed a 10% drop in February, driven by inflation concerns.
- Tariff pressures: Proposed tariffs by former President Trump may exacerbate inflation, offsetting recent progress.
Market Liquidation Data
| Metric | Value |
|---|---|
| Total Liquidations | $961.65 million |
| Long Positions | $891.52 million |
| Short Positions | $70.14 million |
FAQs
Q: Why did Bitcoin drop below $91K?
A: A combination of waning momentum, traditional market downturns, and slowing ETF inflows contributed to the decline.
Q: What does "critical juncture" mean for Bitcoin?
A: It signals a pivotal moment where Bitcoin could either break out of its consolidation or face further downside.
Q: How are tariffs affecting crypto markets?
A: Proposed tariffs may increase inflation, indirectly pressuring risk assets like Bitcoin.
👉 Discover how macroeconomic trends impact crypto
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