Bitfinex analysts have predicted that Bitcoin’s price could consolidate for up to two months after the halving event. In their latest market report, Bitfinex stated that Bitcoin is currently undervalued, with the Market Value to Realised Value (MVRM) ratio at 2.21. This presents a potential entry point for investors as historical patterns have shown significant returns when MVRV dips below its 90-day average. However, Bitcoin dominance is declining as investors shift their focus to altcoins in search of higher returns. This shift in investment patterns is influenced by a federal economic report highlighting slower-than-expected growth in the US economy. The slowdown in growth is attributed to microeconomic factors, with higher interest rates discouraging investment in volatile assets like Bitcoin. The combination of slowing growth and accelerating inflation has raised concerns about stagflation. Despite these factors, Bitfinex believes the macroeconomic environment is more resilient than in previous years, and they predict a consolidation in Bitcoin prices for 1-2 months, with swings of $10,000 on either side. The shift towards altcoins is further emphasized by the drying up of Bitcoin ETF flows. Since the SEC approved Bitcoin ETFs in January, these funds gained widespread adoption, attracting roughly $12 billion in inflows. However, these inflows have lost momentum since April. The launch of Hong Kong Bitcoin Spot ETFs also saw underwhelming inflows, indicating a lack of confidence in the current market condition.
