Bitcoin On-Chain Data Signals Trend Reversal... Is the Bear Market Truly Over?

▲ Bitcoin (BTC)

On-chain data analysis suggests that Bitcoin (BTC) is leaving behind its prolonged downward momentum and preparing for a trend reversal from a historic bottom range.

According to a February 18 report by NewsBTC, Bitcoin’s Inter-exchange Flow Pulse (IFP) has halted its decline and entered a sideways phase, signaling the inflow of new capital. CryptoQuant community analyst Maartunn explained that the IFP indicator, which tracks fund flows between spot and derivatives exchanges, has recently flattened out, indicating that selling pressure may have reached its limit.

When the IFP rises, it indicates that funds are moving from spot exchanges to derivatives exchanges, reflecting heightened speculative interest in the market. Conversely, a decline suggests that investors are reducing exposure to risk assets and adopting a more conservative stance. Although the IFP currently remains below its 90-day moving average—superficially signaling a bearish phase—the slope of its decline has eased, forming a structure similar to those seen just before rebounds at previous bear market bottoms.

Looking at past cases, during the 2018 and 2022 bear markets, the IFP moved sideways and confirmed a bottom before strong price rebounds began. Maartunn noted that the current behavior of the indicator closely resembles patterns observed just before past transitions into bull markets. In particular, despite bearish signals from the IFP in the second half of 2021, Bitcoin went on to reach new all-time highs. As such, the current flattening of the indicator is interpreted as the fading of downward momentum and the potential beginning of a new upward cycle.

Bitcoin is currently trading near $67,300, maintaining a modest 1.3% gain over the past week. Although recent macroeconomic uncertainties have led to temporary price corrections, on-chain capital flows point to the possibility of a gradual trend reversal. Analysts advise closely watching whether the IFP breaks above the 90-day moving average in the coming weeks, which would signal a meaningful shift in capital flows.

These emerging changes in on-chain data suggest that while retail investor sentiment remains subdued, institutional investors and large whales may be quietly repositioning. If downward momentum continues to weaken and capital flows begin shifting back toward derivatives markets, Bitcoin could gain a strong catalyst to break out of its current consolidation range. From the perspective that history tends to repeat itself, the current flattening of the indicator may represent a critical inflection point for long-term investors.

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