Bitcoin’s market sentiment is shifting towards a more cautious approach as the Inter-Exchange Flow Pulse (IFP), a key indicator tracking BTC movements between spot and derivative exchanges, has turned negative.
Historically, this change indicates a decrease in traders’ appetite for risk, often foreshadowing a downward trend in prices.
With wavering investor confidence, the latest data hints at Bitcoin possibly entering a phase of increased volatility and downward pressure.
Is Bitcoin’s Market Turning Bearish?
The IFP gauges the net movement of Bitcoin between spot and derivative exchanges, providing insights into market sentiment and positioning.
A negative shift indicates traders closing positions, reducing leverage, or getting ready to sell, usually correlating with periods of heightened selling pressure and potential price drops in Bitcoin’s market cycle.
Historically, negative IFP readings have corresponded with market corrections or extended bearish trends.
For instance, the metric turned negative in early 2018, aligning with Bitcoin’s fall from its peak into a year-long bear market.
Likewise, in mid-2021, the IFP became negative before a sharp decline, as traders cut leverage and exited positions.
Recent data indicates that the IFP has once again gone negative, sparking worries about a potential repetition of past bearish cycles.
Nevertheless, the impact’s severity varies — certain negative IFP periods resulted in short-term corrections before Bitcoin resumed an upward trend, while others indicated prolonged downturns.
Indications of Further Downside Momentum
Bitcoin is facing challenges in gaining positive momentum, trading around $97,605 currently, with key technical indicators painting a cautious picture.
The 50-day SMA at $98,815 serves as immediate resistance, while the 200-day SMA at $80,002 acts as a critical long-term support level.
The RSI stands at 46.88, staying below the neutral 50 level, signifying weak buying pressure.
Meanwhile, the MACD remains in the negative zone, with the signal line positioned below the MACD line, reinforcing bearish sentiment.
Failure to surpass the 50-day SMA may lead to a drop towards $95,000 or lower. On the upside, breaking above $100,000 is crucial to counter the current bearish sentiment and reignite bullish momentum.