Bitcoin (BTC) has experienced a rollercoaster ride in the past 24 hours, surging to $88.7K before retreating to $86K. This heightened volatility has sparked speculation about a potential market top. CryptoQuant analyst Burak Kesmeci highlights four key on-chain metrics that could signal the end of Bitcoin’s bull market.
On-Chain Indicators Flash Warning Signs
One major metric, Bitcoin’s Inter-Exchange Flow Pulse (IFP), remains bearish. At the time of writing, IFP stood at 696K, significantly below its 90-day simple moving average (SMA90) of 794K. Historically, BTC struggles when IFP lags behind SMA90. For instance, during December 2023 to February 2024, IFP stayed below SMA90, only to trigger a rally past $73K when it broke above.
Additionally, the CQ Bull & Bear Market Cycle Indicator shows a weak bearish pattern, similar to past trends. The DMA365 currently sits at 0.18, while DMA30 is -0.16. Until DMA30 crosses above DMA365, bullish confirmation remains elusive.
Bitcoin’s Market Value to Realized Value (MVRV) Score also indicates potential downside risk. Currently below its SMA365, the metric suggests persistent selling pressure. A similar drop occurred during the August 5, 2024, carry trade crisis, followed by a strong recovery once conditions improved.
Finally, Bitcoin’s Net Unrealized Profit/Loss (NUPL) remains under SMA365. While not a definitive sign of a market top, it does suggest ongoing bearish sentiment. With NUPL at 0.49 and SMA365 at 0.53, a recovery would require a decisive move above this threshold.
Market Sentiment Remains Bullish
Despite these cautionary signs, Bitcoin whales remain optimistic. The declining Whale Exchange Ratio suggests large holders are accumulating rather than offloading BTC. Similarly, Bitcoin’s exchange netflow has been negative for five consecutive days, signaling strong buyer demand.
With exchange reserves at a yearly low, fewer BTC transfers into exchanges point to a potential recovery once macroeconomic conditions stabilize. If Bitcoin maintains its bullish sentiment, it could reclaim $90K. However, if further corrections unfold, BTC may test support at $85,222.
Also Read: Mt. Gox Moves $1 Billion in Bitcoin Again – Is Major BTC Volatility Coming?
While some indicators suggest turbulence, the market is not yet at a definitive top. As history shows, easing macro pressures could reignite Bitcoin’s bullish momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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