Bitcoin’s price action has triggered a technical indicator that previously signaled a major rally, but analysts caution that current macroeconomic conditions differ from past cycles. While some metrics suggest a potential bottoming phase, ETF flow data and persistent inflation create a more complex outlook for the cryptocurrency’s near-term trajectory.
A technical indicator that flashed before Bitcoin’s 130% rally in 2024 has appeared again, suggesting the cryptocurrency may be nearing a potential bullish inflection point. Data aggregator Swissblock noted Bitcoin has spent 25 consecutive days in an “extreme high risk” zone, its longest stretch on record and exceeding the 23-day peak seen in 2023.
Analyst Michaël van de Poppe pointed to a chart showing Bitcoin’s price interacting with levels that previously marked bottoming phases. In 2023, a shift from high risk to low risk on this indicator coincided with the start of a significant bullish expansion.
However, trader positioning does not yet confirm a sustained uptrend, as apparent demand continues to fluctuate. While selling pressure has faded, strong buying demand has not maintained dominance according to data mentioned by RugaResearch. The macroeconomic newsletter Ecoinometrics highlighted that Bitcoin declines of this magnitude rarely resolve quickly, with historical recoveries from 50% drawdowns typically developing over extended periods, excluding the 2020 COVID rally.
Current ETF flow data shows gold ETFs have seen cumulative inflows surpassing spot Bitcoin ETF flows on a 90-day rolling basis since August. Over the same period, Bitcoin funds have posted negative flows, currently sitting at approximately –$2.06 billion according to available data.
Ecoinometrics also noted that inflation data provides context, with headline Personal Consumption Expenditures near 2.9% year-on-year and core services above 3.4%. Analyst Willy Woo suggested any short-term relief rally to between $70,000 and $80,000 is likely to face selling pressure, stating that the broader regime is heavily bearish with both spot and futures liquidity deteriorating. Woo identified $45,000 as aligning with prior bear market levels, with $30,000 and $16,000 marking deeper historical support zones tied to longer-term trend preservation.
