Bitcoin price metric flips red as analysis warns of 'bearish phase' next

Key Points

  • Bitcoin's Inter-Exchange Flow Pulse (IFP) metric has turned bearish, indicating a potential start of a downward price trend.
  • The shift of Bitcoin from derivative to spot exchanges suggests that investors are reducing risk exposure at current prices.
  • Historically, a high IFP has preceded Bitcoin's price peaks, but current levels are not as high as in previous cycles.

Summary

The article discusses a concerning trend in Bitcoin's market dynamics as indicated by the Inter-Exchange Flow Pulse (IFP) metric, which has recently flipped to a bearish signal. This metric, which tracks the flow of Bitcoin between derivative and spot exchanges, traditionally signals the beginning of a bearish phase when Bitcoin moves from derivative to spot exchanges. This shift suggests that investors are closing long positions and reducing their risk exposure, potentially marking the start of a downturn in Bitcoin's price. Despite this, the broader sentiment among market observers remains cautiously optimistic, with many not expecting the current bull run to end soon. However, the article notes that Bitcoin's price cycles have historically been accompanied by new IFP peaks, which are not currently observed, hinting at a possible deviation from past patterns. The analysis also touches on the broader economic context, mentioning that recent inflation reports have influenced the Federal Reserve's monetary policy, potentially affecting risk-asset conditions in the future.

cointelegraph
February 16, 2025
Crypto
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