Bitcoin Enters Warm Zone—Is a Melt-Up or Correction Coming Next? (Bitfinex Alpha Report)
Bitcoin's temperature is rising—but it's not red-hot yet. The king of crypto sits in a 'warm' phase, according to Bitfinex Alpha's latest analysis. So what’s next: a bullish surge or a cooling-off period?
### The Goldilocks Zone for BTC
Not too cold, not too overheated—Bitcoin’s current positioning suggests a delicate equilibrium. Historically, this middle ground has preceded both parabolic rallies and sharp pullbacks. Traders are watching key levels like hawks (or should we say, like Wall Street analysts chasing their yearly bonus).
### The Two Possible Paths
1.
Melt-Up Scenario
: Institutional FOMO kicks in, pushing BTC past resistance into uncharted territory. The 'warm' zone becomes a launchpad—just like in early 2024 before the last ATH.
2.
Profit-Taking Chill
: Short-term holders cash in gains, triggering a 10-15% dip. A classic 'buy the rumor, sell the news' play—because nothing makes traders happier than overcomplicating a perfectly good trend.
### The Wildcard: Macro Meltdowns
Fed rate decisions, election chaos, or a surprise Black Swan event could override all technicals. Because when has crypto ever followed a predictable script? (Spoiler: Never.)
### Bottom Line
Bitcoin’s thermostat is set to 'interesting.' Whether that means printing new highs or testing trader patience remains to be seen. One thing’s certain—the market will overreact either way. After all, what’s finance without a little drama?
Warm But Not Overheated Zone
Bitcoin’s latest recovery is evident in the United States spot exchange-traded fund (ETF) market. At the beginning of this month, spot ETF inflows turned negative, with investors withdrawing at least 1,500 BTC across four consecutive trading days. Analysts found that the market saw its largest four-day selling stretch between July 31 and August 5, amounting to $1.45 billion.
However, the market saw a positive reversal between August 6 and 8, with inflows totaling more than $770 million. Even August 11 recorded positive flows exceeding $178 million. These inflows, supported by consistent BTC accumulation by crypto treasury companies, are the primary catalyst behind the market’s latest strength.
Notably, BTC rallied close to its all-time high on Monday, climbing from $118,000 to $122,100. Although it had fallen to the $118,000 range at press time, demand from ETFs and crypto treasury companies could keep its value afloat.
Between Range Highs and Lows
Furthermore, Bitfinex has spotted a growing relationship between ETF flows and macroeconomic conditions in recent months. Analysts say the crypto market is increasingly becoming sensitive to macro events, and this week would be no different as Consumer Price Index (CPI) and Producer Price Index (PPI) data are due in the next few days.
Bitcoin continuing with its current momentum largely depends on macro releases – the asset could either break to new highs or retest recent lows. Bitcoin faces the possibility of retracing to $110,000 in the near term.
“Even so, the broader structural outlook remains constructive, underpinned by sustained institutional accumulation, expanding treasury adoption, and resilient spot demand,” analysts added.
Meanwhile, the market shows a significant split between profit-taking and loss-realisation among coins currently in motion. About 70% of short-term holder supply is still held in profit, while the proportion of assets being sold for profit has eased to 45%. Market experts insist BTC will continue to oscillate between range highs and lows, the asset’s price moving above and below the cost basis of fresh buyers.
