Bitcoin (BTC) is facing the possibility of slipping into a new bear market, as a substantial set of BTC price indicators has shown a “bearish divergence.”
During a social media conversation on March 27, commentators on Bitcoin highlighted concerning signals from Capriole Investments’ Bitcoin Macro Index.
Creator of Bitcoin Macro Index describes slump as “not great”
As BTC/USD finds it challenging to reclaim the territory near its all-time highs, onchain indicators are starting to lose their bullish momentum.
The Bitcoin Macro Index, developed by Capriole in 2022, employs machine learning to examine data from a wide array of metrics. Founder Charles Edwards asserts that these metrics “provide a strong indication of Bitcoin’s relative value across historical cycles.”
“The model focuses solely on onchain and macro-market data. Notably, it does not incorporate price data or technical analysis as inputs,” he clarified when introducing the tool.
Since late 2023, the index has been showing lower highs, while the price has been recording higher highs, resulting in a “bearish divergence.” While this is a common phenomenon during past bull markets, it suggests that BTC/USD may have already reached a long-term peak.
“Not great,” Edwards commented while sharing an image of the Index posted by another user on X.
“But… when the Bitcoin Macro Index turns positive, I won’t be challenging it.”
Capriole Bitcoin Macro Index. Source: @A_Trade_Academy/X
BTC price metrics facing recovery challenges
Multiple analytical sources have determined that Bitcoin is experiencing macro turbulence this year.
Related:Bitcoin price prediction markets indicate BTC won’t exceed $138K by 2025
This week, in one of its “Quicktake” blog entries, the onchain analytics platform CryptoQuant pointed out four onchain metrics that are currently in a volatile state.
“All these metrics suggest that Bitcoin is undergoing significant turbulence in the short to mid-term,” contributor Burak Kesmeci stated.
“However, none of them suggest that Bitcoin has reached an overheated or cycle-top level.”
Bitcoin IFP chart (screenshot). Source: CryptoQuant
The list includes metrics such as Market Value to Realized Value (MVRV) and Net Unspent Profit/Loss (NUPL), along with the Inter-Exchange Flow Pulse (IFP) metric, which turned bearish in February.
For a shift to occur, Kesmeci concluded that the IFP must rise above its 90-day simple moving average (SMA).
This article does not constitute investment advice or recommendations. All investment and trading decisions come with risks, and readers should perform their own research when making decisions.
