The Bitcoin Inter-Exchange Flow Pulse metric is flashing what traditionally signals the start of BTC price downside.
Bitcoin BTC $96,319 risks entering a new “bearish phase” as investors reduce risk exposure at current prices.
In fresh findings on Feb. 15, on-chain analytics platform CryptoQuant warned that BTC was increasingly leaving derivatives exchanges.
Bitcoin exchange flow trend flips bearish
Bitcoin flows between derivative and spot exchanges are the latest cause of alarm for those seeking bullish BTC price continuation.
Using the so-called Inter-Exchange Flow Pulse (IFP) metric, CryptoQuant contributor J. A. Maartunn revealed a dip in the volume of coins flowing between the two types of crypto trading platforms.
“When a significant amount of Bitcoin is transferred to derivative exchanges, the indicator signals a bullish period. This suggests that traders are moving coins to open long positions in the derivatives market,” he explained in a “Quicktake” market update.
“However, when Bitcoin starts flowing out of derivative exchanges and into spot exchanges, it indicates the beginning of a bearish period. This typically happens when long positions are closed and large investors (whales) reduce their exposure to risk.
Bitcoin IFP chart. Source: CryptoQuant
An accompanying chart shows the IFP trend reversing downward — a move traditionally correlated with the start of downward BTC price action.
“Today, the indicator has turned bearish, suggesting a decline in market risk appetite and potentially marking the start of a bearish phase,” Maartunn concluded.
IFP reached its highest-ever levels in March 2021, around a month before BTC/USD put in a new all-time high of $58,000, which held for around seven months.
In January this year, when Bitcoin saw its $109,000 current record, IFP was nowhere near its peak from four years prior. The legacy chart shows that each BTC price cycle top has been accompanied by a new IFP top.
Bull run faith remains intact
Even more conservative views favor a return to price upside once sufficient global liquidity kicks in, this nonetheless dependent to an extent on US macroeconomic policy.
Recent inflation reports have cemented the Federal Reserve’s resolve to hold off on introducing more favorable risk-asset conditions in 2025.
On shorter timeframes, Bitcoin whales are under the microscope in the bid to identify reliable BTC price support levels.
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