A technical bottom signal that preceded a roughly 130% Bitcoin rally in 2024 has reappeared, suggesting price may be nearing a turning point. But unlike the prior cycle, liquidity, ETF flows and macro indicators currently paint a more cautious picture — meaning a repeat rally is not guaranteed.
Signal and context
Data from Swissblock shows Bitcoin has remained in its “extreme high risk” zone for 25 straight days, the longest streak on record and a step above the 23-day run in 2023. Historically, extended periods in that zone have coincided with late-stage drawdowns and eventual lows. MN Capital founder Michaël van de Poppe noted BTC’s interaction with profit/loss supply levels that have marked prior bottoms, when risk readings shifted from high to low and a major uptrend followed.
Demand and positioning lag
Despite those on-chain risk markers, trader positioning and demand metrics are not yet confirming an unmistakable uptrend. RugaResearch finds 30-day apparent demand continuing to oscillate between positive and negative readings. Although selling pressure has eased from deeper drawdown phases, sustained and consistent buying dominance has not yet emerged.
Macro and liquidity constraints
Ecoinometrics warned that drawdowns of this scale rarely resolve quickly; recoveries after 50% drops have typically stretched out except in the unique 2020 COVID episode, when massive policy intervention accelerated a rebound. That observation matters now because other liquidity signals are muted.
ETF flows and money rotation
On a 90-day rolling basis since August, cumulative inflows into gold ETFs have outpaced flows into spot Bitcoin ETFs. Bitcoin funds have posted negative 90-day average flows, currently in the neighborhood of –$2.06 billion, underscoring limited fresh demand from institutional ETF buyers compared with prior cycles.
Inflation and policy headwinds
Inflation measures that the Federal Reserve watches remain elevated: headline PCE around 2.9% year-over-year, core PCE near 3.0% and core services above 3.4%. With PCE the Fed’s preferred gauge and no clear, sustained downward trend yet, prospects for renewed liquidity expansion remain constrained.
Key price levels and risks
On-chain analyst Willy Woo (CMCC Crest) cautioned that a short-lived relief move into the $70,000–$80,000 range could prompt renewed selling under current liquidity conditions. He points to $45,000 as a level aligned with prior bear-market dynamics, with deeper supports near $30,000 and $16,000 tied to longer-term trend preservation.
Takeaway
In short, several on-chain risk indicators and supply metrics are signaling conditions often seen at market lows, but demand-side measures, ETF flows and macro fundamentals are not yet fully aligned. That mismatch suggests any bottom signal may need more time and an improvement in liquidity and buying pressure before a durable bull phase can take hold.
Disclaimer: This article is informational and not investment advice. All trading and investing carries risk; readers should perform their own research and consider seeking professional advice.