According to Cointelegraph, Bitcoin (BTC) may be entering a new "bearish phase" as investors begin to reduce their risk exposure at current price levels. Recent findings from the onchain analytics platform CryptoQuant indicate that BTC is increasingly being withdrawn from derivatives exchanges, signaling potential market caution.
The trend of Bitcoin flows between derivative and spot exchanges has become a point of concern for those hoping for continued bullish momentum in BTC prices. Utilizing the Inter-Exchange Flow Pulse (IFP) metric, CryptoQuant contributor J. A. Maartunn observed a decline in the volume of coins moving between these two types of crypto trading platforms. Maartunn explained that when a significant amount of Bitcoin is transferred to derivative exchanges, it typically signals a bullish period, as traders move coins to open long positions in the derivatives market. Conversely, when Bitcoin starts flowing out of derivative exchanges and into spot exchanges, it indicates the onset of a bearish period, often occurring when long positions are closed and large investors, or "whales," reduce their exposure to risk.
The IFP trend has recently reversed downward, a move traditionally associated with the beginning of a downward BTC price action. Maartunn concluded that the indicator has turned bearish, suggesting a decline in market risk appetite and potentially marking the start of a bearish phase. The IFP reached its highest-ever levels in March 2021, approximately a month before BTC/USD achieved a new all-time high of $58,000, which remained for about seven months. In January of this year, when Bitcoin reached its current record of $109,000, the IFP was not near its peak from four years prior. Historical data shows that each BTC price cycle top has been accompanied by a new IFP top.
Despite these developments, faith in the ongoing Bitcoin bull run remains intact. As previously reported by Cointelegraph, few anticipate an imminent end to the current bull market. Even conservative perspectives suggest a return to price increases once sufficient global liquidity is achieved, although this is somewhat dependent on U.S. macroeconomic policy. Recent inflation reports have reinforced the Federal Reserve's decision to refrain from introducing more favorable risk-asset conditions in 2025. In the short term, Bitcoin whales are being closely monitored to identify reliable BTC price support levels. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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