Bitfinex Report Warns of Bitcoin Volatility Despite New All-Time High

Bitcoin has reached a new all-time high of around $110,000 on January 20, recovering sharply after dipping to $89,700 earlier in the week.

However, a new Bitfinex Alpha report warns that the rally may face significant headwinds due to “sell-the-news” trading behavior and broader market dynamics.

The report highlights that Bitcoin’s rebound, despite $818 million in liquidations, reflects strong market support, particularly near $88,400. This level, tied to the Short-Term Holder Realized Price (STH-RP), has historically served as a buffer during corrections. However, the report cautions that a break below this critical threshold could lead to panic selling, particularly among short-term holders, amplifying broader market declines.

The recovery has been fueled by strong spot market demand, as seen in rising Spot Cumulative Volume Delta (CVD) metrics, particularly from U.S.-based exchanges. This institutional-level activity has bolstered Bitcoin’s position as a top-performing risk asset. Still, the report warns that sustained buying depletes bids, increasing the risk of short-term pullbacks.

Additionally, speculation around Donald Trump’s inauguration and potential cryptocurrency-related executive orders has created uncertainty. The report suggests that traders may engage in profit-taking ahead of any major policy announcements, further intensifying short-term volatility.

While Bitcoin remains firmly within its bull market range, the report emphasizes the importance of maintaining momentum above $88,400 to avoid triggering wider market sell-offs. Analysts advise traders to remain cautious, as the interplay between institutional demand, macroeconomic developments, and evolving sentiment could drive significant price fluctuations in the weeks ahead.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.