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