Onchain analytics platform CryptoQuant has issued a warning regarding BTC’s recent exchange flow trends. On February 15, the firm reported a decline in the volume of tokens moving between derivatives and spot exchanges.
Providing further insight, CryptoQuant contributor J. A. Maartunn explained the importance of the Inter-Exchange Flow Pulse (IFP) metric. The indicator helps evaluate market sentiment by analyzing the volume of BTC transfers between derivative and spot exchanges.
According to Maartunn, when a large amount of Bitcoin is moved to derivatives exchanges, it typically indicates that traders are opening long positions, anticipating a price increase. This trend is generally associated with bullish periods.
“When a significant amount of Bitcoin is transferred to derivative exchanges, the indicator signals a bullish period…However, when Bitcoin starts flowing out of derivative exchanges and into spot exchanges, it indicates the beginning of a bearish period.”
Conversely, when BTC tokens start flowing out of derivatives exchanges and into spot exchanges, it often signifies the unwinding of long positions. This trend is commonly observed during market downturns, as large investors (whales) seek to lower their risk exposure.
Following this acquaintance, Maartunn stated that the IFP has turned bearish, marking the early stages of a downturn based on historical trends. Consequently, traders should closely monitor BTC’s price action and key support levels, as a prolonged decline in IFP could indicate sustained bearish pressure in the market.
BTC Struggles Below $100K Amid Market Weakness
Bitcoin has struggled to maintain upward momentum after reaching its all-time high of $109,114 on January 20. Since then, the cryptocurrency has entered a consolidation phase, currently trading around $96.3K.
Crypto analyst Cryptododo7 notes that the token’s price action has formed a descending resistance trendline, with $102,000 emerging as a key level. Historically, the cryptocurrency has tested this level multiple times without breaking through, marking it as a strong resistance level.
If the BTC token fails to surpass this mark, Cryptododo7 expects further downside, with the following critical support at $91,800. A drop below this zone could push the price toward $84,000, where some buying activity may appear.
However, Cryptododo7 warns that if adverse price action continues, Bitcoin could decline to $76,000. On the other hand, the analyst emphasizes that for the cryptocurrency to break out of this downtrend, it needs a daily or weekly close above $108,400, which could invalidate any bearish potential.
