Bitcoin hovers near $90,000…Bitfinex "Vulnerable to external shocks due to weakening demand"

Bitcoin is continuing to trade in a narrow range in the low $90,000s and is not showing a clear direction. Despite a technical rebound, analysts say the weakness in spot demand and structural headwinds have increased vulnerability to macro variables.

On the 8th (local time), according to CoinDesk, Bitcoin retraced a slight early-session rebound in the U.S. market and spent most of the day trading in the $90,000 range, closing at about $90,500. The 24-hour decline was about 1%.

Major altcoins also failed to gain. Ethereum was largely flat but recovered to the highest level relative to Bitcoin in the past month, and some tokens such as Zcash (ZEC) and Canton Network (CC) posted double-digit gains. The CoinDesk20 index fell 0.8%.

Volatility in bonds and equities also weighed on crypto sentiment. Turmoil in the Japanese government bond market pushed the U.S. 10-year Treasury yield up to 4.19%, its highest level in about three months. U.K. and major European government bonds also weakened, and in U.S. stocks the S&P 500 fell 0.5% and the Nasdaq fell 0.3%. Markets are watching this week's Federal Reserve (Fed) Federal Open Market Committee (FOMC) and pricing in the potential for increased volatility.

LMAX strategist Joel Kruger said that ahead of the rate decision, signs of easing financial conditions or a weaker dollar could be a short-term positive for crypto markets, but if a more hawkish signal emerges than expected, downward pressure could intensify.

Separately from these short-term factors, some analysts argue that Bitcoin's structural weakness is more pronounced. Bitfinex said in a report that despite a rebound from November lows, weak spot demand has widened the gap with the U.S. stock market. While the S&P 500 is trading near record highs, Bitcoin has been stuck in a box range, showing relative weakness versus risk assets.

Bitfinex cited several indicators to support this. U.S.-listed Bitcoin spot ETFs have seen persistent outflows, indicating weak buying pressure, and the cumulative volume delta (CVD) on major exchanges shows continued spot selling dominance. The number of Bitcoins in unrealized-loss status has exceeded 7 million, reflecting sentiment similar to the 2022 bear market.

Monthly capital inflows based on Net Realized Cap were about $8.69 billion and remain positive, but they are much lower than during past bull periods, so short-term price defense is limited.

Bitfinex warned that these factors make the market more vulnerable heading into year-end. The report said that with spot demand weakened and the buying base thin, external shocks or increased macro volatility could widen price swings.