BTC on Brink of Exiting Bear Market as Two Conditions Met

Bitcoin (BTC) is on the cusp of exiting its bear market as two out of three necessary conditions have been met, according to a recent report from Bitfinex Alpha.

The report highlights that lower expected rates and already-loose financial conditions are in place, which are the first two conditions required for a potential BTC price surge. The inflation rate has decreased, partly due to lower energy prices, and the Federal Reserve may not raise interest rates in the coming weeks. This has led to an increased appetite for risk assets among investors, with short-term Treasury yields dropping and stocks like the S&P 500 soaring.

However, a separate source of supply-driven inflation has been introduced by tech-focused hardware and artificial intelligence (AI) infrastructure, but this capital has yet to flow into the crypto market. The third condition for a smooth rally is that capital flowing through the equities market, tech sector, and AI market must enter the crypto ecosystem.

Currently, capital flow through spot Bitcoin exchange-traded funds (ETFs) has decreased, with the fund losing around $385 million in weekly flow during the same week that equities like the S&P 100 soared. Corporate Bitcoin treasuries have also turned negative, and stablecoin supply has reduced to below its May record.