• Bitcoin’s negative Inter-Exchange Flow Pulse indicates a reduced risk appetite among investors, suggesting a possible downturn.
• Bitcoin is experiencing low momentum, facing resistance at $98,815 and potential downside risks.

The Bitcoin [BTC] market is undergoing a bearish shift as the Inter-Exchange Flow Pulse (IFP), an important indicator tracking Bitcoin movement between spot and derivatives exchanges, has turned negative.

This shift has historically indicated a declining risk appetite among traders, often foreshadowing price drops.

As investor sentiment diminishes, recent statistics imply that Bitcoin may be on the brink of increased volatility and downward pressure.

Are We Entering a Bearish Phase for Bitcoin?

The IFP measures the net Bitcoin flow between spot and derivatives exchanges, giving insights into market sentiment and trader positions.

A negative IFP indicates a trend where traders are closing positions, reducing leverage, or getting ready to sell, often aligning with periods of heightened selling pressure and potential price declines during Bitcoin’s market cycle.

Historically, negative readings from the IFP have coincided with market corrections or prolonged bearish phases. For instance, the metric turned negative in early 2018, marking Bitcoin’s plunge from its cycle high into a year-long bear market.

In a similar pattern, during mid-2021, the IFP showed negative readings prior to a significant market downturn as traders scaled back on leverage and exited their positions.

Source: CryptoQuant

The latest metrics indicate that the IFP has once again become negative, causing apprehensions about a potential repetition of earlier bearish trends.

However, the impact of these negative IFP periods can differ significantly — some instances have led to short-term corrections before Bitcoin resumed an upward trajectory, while others marked the onset of extended downtimes.

Weak Momentum Indicates Possible Further Downturn

Currently, Bitcoin is facing challenges in gaining upward momentum, trading around $97,605 at the time of writing, with essential technical indicators reflecting a cautious stance.

The 50-day simple moving average (SMA) at $98,815 has become an immediate resistance level, while the 200-day SMA at $80,002 remains a vital long-term support threshold.

Source: TradingView

The RSI currently stands at 46.88, just below the neutral 50 mark, indicating weak buying activity.

Add to this, the MACD remains in negative territory, with the signal line positioned below the MACD line, highlighting a bearish trend.

If Bitcoin cannot overcome the 50-day SMA, it may potentially slide toward $95,000 or lower. Conversely, a breakout above $100,000 is essential to negate the current bearish sentiment and stimulate renewed bullish momentum.