Bitcoin Faces Turbulence Despite 4% Weekly Gain

Bitcoin’s market dynamics are under scrutiny as analysts highlight potential warning signals amidst a robust price surge. The recent 4% weekly gain coupled with BTC’s falling Inter-Exchange Flow Pulse has sparked fresh market concerns for stakeholders. CryptoQuant analyst Burak Kesmeci noted that these four indicators suggest Bitcoin is facing significant turbulence.

Amidst recent volatility, Bitcoin’s price movements pose questions around market sustainability, with key indicators hinting at potential corrections. CryptoQuant highlights four essential indicators that could imply a potential market top for Bitcoin. The principal metric is Bitcoin’s Inter-Exchange Flow Pulse (IFP), which remains in a bearish territory. At the time of analysis, the IFP registered at 696k, trailing behind the 90-day simple moving average (SMA90) of 794k. This divergence indicates that unless the IFP rises above the SMA90, market corrections may continue. In earlier months, ranging from December 2023 to February 2024, the IFP minimized below the SMA90, followed by a surge to $73k once it breached this threshold.

Additionally, the Bitcoin CQ Bull & Bear Market Cycle Indicator exhibits signs of bearish momentum. The daily moving average over 365 days (DMA365) stood at 0.18 while the 30-day moving average (DMA30) was reading -0.16. The crossover of DMA30 above DMA365 is vital for signaling a bullish reversal. The third metric to consider is the MVRV Score, currently below its 365-day average (SMA365), indicating probable continuing selling pressure. Historically, when MVRV stays beneath the SMA365, it suggests increased selling tendencies among investors. Notably, the last time Bitcoin fell below this average was during the market turmoil in August 2024. Upon recovery, it reclaimed its position above SMA365, unveiling growth potential.

Lastly, the Net Unrealized Profit/Loss (NUPL) is currently sitting below its SMA365, which suggests a persistent bearish trend. For recovery, the NUPL must exceed the SMA365 to stabilize the market’s upward movement. As current figures stand, NUPL is at 0.49 versus the SMA365 marking 0.53. Without a recovery above the SMA365, corrections are anticipated. These four metrics collectively signal that Bitcoin faces potential turbulence in the short to mid-term. Importantly, none indicate an overheated market suggesting an imminent cycle top. This scenario resonates with the carry trade crisis of August 2024, driven by macroeconomic variables that pressured Bitcoin’s price.

The macroeconomic backdrop continues to pose challenges; policies by figures such as Donald Trump and persistent uncertainties are impacting both macro indices and Bitcoin. Historically, such pressures have led to a recovery phase that aligns with easing macro conditions, suggesting a potential rebound for Bitcoin. Despite the worries outlined in the CryptoQuant analysis, data from COINOTAG indicates that the market top isn’t upon us; key players retain a bullish sentiment. Bitcoin whales display an optimistic outlook as suggested by the decreasing Whale Exchange Ratio. A notable decline in this ratio often means that large holders are choosing to retain rather than sell, indicating confidence in future price increases.

Furthermore, Bitcoin’s exchange netflow has demonstrated a negative trend for five consecutive days, indicating a demand-driven market where buyers are actively building positions. This trend suggests that if users felt the top is imminent, their behavior would markedly differ. The sustained decrease in exchange reserves highlights a drop to a yearly low, underscoring limited transfers into exchanges as previously noted. Should inflows remain low, a price recovery is plausible when overall market conditions enhance. In summary, while indicators raise concerns about a potential bull market end, the broader context suggests that expansion remains a viable outcome. Both whales and retail investors are maintaining a generally bullish sentiment. If this positive outlook persists, Bitcoin could realistically target the $90k threshold once again; conversely, a correction could pull the price down to approximately $85,222.