Bitcoin fires a bottom signal but at this time investors have no appetite for risk.
In the year Bitcoin (BTC)'s bottom signal, seen before the 130% rally in 2023, is flashing again this week, indicating that the price is approaching another bearish indicator point.
At the same time, liquidity, exchange-traded funds (ETFs) and broader macroeconomic data change the environment two years ago, suggesting that the path ahead may not mirror the past cycle.
BTC lower trigger appears without strong follow-up
Data aggregator Swissblock says bitcoin has now entered the “extreme risk” zone for 25 consecutive days, the longest on record and above the 23-day peak seen in 2023. Historically, an extended stay in this zone is consistent with a late stage failure or a bottom signal.
MN Capital founder Michael Van de Pop also pointed to BTC supply on a profit/loss chart, indicating that the price is likely to interact with levels that have already seen signs of a downward move. In the year The move from high risk to low risk in 2023 coincided with the start of a strong bullish spread.
A trader's position is not the same as a trade. RugaResearch says 30-day open demand continues to flip between positive and negative. As the selling pressure faded, sustained buying interest did not dominate.
Related: Bitcoin To $30K? Analysts debate when and at what price BTC will depreciate.
A deep dive into Bitcoin takes time
Macroeconomic newspaper Econometrics has highlighted that BTC's decline of this magnitude will not resolve anytime soon. Excluding the 2020 covid rally supported by aggressive monetary policy interventions, recoveries from 50% weaknesses have developed over the extended period.
ETF flow data reinforces the cautious voice. Since August, cumulative inflows into gold ETFs have exceeded those of the Bitcoin ETF on a 90-day rolling basis. During the same period, Bitcoin funds have posted negative flows on a 90-day rolling average basis, currently sitting at -$2.06 billion.
Inflationary trends added further context. Econometrics said personal consumption expenditures (PCE) were up nearly 2.9% year-on-year, with primary up 3.0% and core services up 3.4%. The Federal Reserve is targeting PCE, and the recent trend has not shown a clear downward shift. Without discounting expectations, liquidity expansion appears limited.
Price levels set the tone. CMCC Crest Managing's Willie Wu said any rally to short-term support could face further selling pressure around $70,000 to $80,000, as “the broader regime remains weak as liquidity in places and futures declines.”
Woo said the $45,000 level is consistent with a pre-bear market. Below that, $30,000 and $16,000 represent historical support, which is associated with long-term trend protection.
Related: Crypto Taxes Updated, BTC Stuck Below $70K: Monthly Charts
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