Bitcoin (BTC)’s bearish signal that appeared in 2023, ahead of the 130% rally in 2024, flashed again this week, raising the possibility that the price is approaching another upside point.
At the same time, broader liquidity data, exchange-traded fund (ETF) flows and macroeconomic data are changing the environment from two years ago, suggesting that the path ahead may not reflect the previous period.
A lower BTC trigger appears without a strong follow-through
Data aggregator Swissblock noted that Bitcoin has now logged 25 consecutive days in its “extreme risk” zone, the longest stretch on record and above the 23-day peak set in 2023. Historically, a long stay in this area has coincided with a late phase decline or a down signal.
MN Capital founder Michael van de Poppe also pointed to BTC versus supply on the profit/loss chart, which shows the price at levels that previously marked the bottom stages. In 2023, the transition from high risk to low risk coincided with the start of a strong upside expansion.
The trader’s placement is not aligned with the uptrend. RugaResearch noted that the 30-day demand fluctuates between positive and negative. While selling pressure has eased, robust buying demand has not maintained its dominance.
Related: Bitcoin to $30K? Analysts debate when and at what price BTC will go down
Bitcoin’s deeper decline will take time
Macroeconomics newsletter Ecoinometrics has highlighted that BTC declines of this magnitude are rarely resolved quickly. With the exception of the 2020 COVID-19 rally, which was supported by aggressive monetary policy intervention, the recovery from 50% declines has developed over a long period of time.
ETF flow data reinforces the tone of caution. Since August, cumulative inflows into gold ETFs over a 90-day period have exceeded flows into spot Bitcoin ETFs. During the same period, Bitcoin funds posted a negative 90-day average flow, which currently stands at $2.06 billion.
Inflationary trends added further context. Ecoinometrics noted that the headline Personal Consumer Expenditure (PCE) is close to 2.9% year-over-year, with the base around 3.0% and basic services above 3.4%. The Federal Reserve is targeting PCE and the recent trend has not shown a clear downward shift. Without lowering expectations, liquidity expansion appears limited.
The price level creates a debate. CMCC Crest managing partner Willie Wu said any near-term rally between $70,000 and $80,000 would face another round of selling pressure as “the broad mode is very low with deteriorating liquidity in both spot and futures.”
Wu said the $45,000 level is consistent with the previous bear market. Below, $30,000 and $16,000 represent historical support, which is related to maintaining long-term trends.
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