Bitfinex: On-chain signals show BTC bottoming as selling pressure fades
Bitfinex Alpha reports BTC staged a >15% rebound from recent lows to $93,116 after a 35.9% drawdown from its all-time high. Despite a 4.1% weekly pullback, on-chain metrics suggest selling pressure is waning and a local bottom is forming. Key signals: adjusted SOPR (aSOPR) has fallen below 1 — the third occurrence since early 2024 — matching patterns at prior cyclical lows; entity-adjusted realised losses rose to $403.4 million daily, signalling deep loss-taking consistent with panic selling near cycle troughs. Derivatives markets show orderly deleveraging: total BTC open interest dropped to $59.17 billion from a peak of $94.12 billion, implying liquidations and short-covering rather than fresh speculative leverage. Macroeconomic context: U.S. retail sales slowed sharply while core capital goods orders rose, reflecting weak consumer spending but strong corporate capex (AI/automation), creating mixed signals for the Fed. Institutional flows continue: BlackRock increased IBIT exposure (up 14% to 2.39 million shares); ARK Invest bought >$93M in crypto-related equities and its BTC ETF; Texas allocated $5M to IBIT for a state BTC reserve pilot. Overall, Bitfinex interprets the data as the market transitioning into a more stable consolidation phase, lowering tail risks and potentially setting the stage for a more sustainable rebound into Q4. Primary keywords: Bitcoin, BTC, on-chain, aSOPR, open interest, deleveraging, ETF institutional flows.
Bullish
The report combines multiple constructive signals: a significant price rebound after a deep drawdown, aSOPR < 1 and large realised losses indicating capitulation-like behavior, and a marked reduction in derivatives open interest implying orderly deleveraging. Historically, similar on-chain patterns (aSOPR dips and concentrated realised losses) have coincided with local cycle lows and subsequent recoveries as forced sellers are exhausted. Institutional accumulation—BlackRock, ARK, and a state-level IBIT allocation—adds structural bid and reduces likelihood of a purely retail-driven sell-off. Short-term implications: expect volatility and probe lower/higher for liquidity as markets digest deleveraging and macro news; short squeezes and bouts of sideways consolidation are likely. Medium-to-long term: with reduced systemic leverage and growing ETF/institional demand, probability of a sustained rebound into Q4 rises, improving market stability. Risks remain from macro shocks or renewed liquidity-driven selling, but current indicators point to a bullish tilt rather than immediate further capitulation.