A Bitcoin bottom signal that previously preceded a powerful rally has reemerged, but shifting liquidity dynamics and deteriorating fund flows suggest that any recovery may unfold far differently from the surge witnessed in 2024. Market observers are closely watching on-chain and macroeconomic indicators, as historical risk models now show conditions resembling those that marked the end of the prior major correction cycle. On-Chain Metrics Flash Familiar Warning Data from Swissblock shows Bitcoin has spent 25 consecutive days in its “extreme high risk” zone, surpassing the 23-day stretch recorded in 2023 before prices rebounded sharply. Historically, such prolonged stays in elevated risk territory have coincided with late-stage drawdowns that eventually transitioned into durable bottoming structures and subsequent bullish expansions. MN Capital founder Michaël van de Poppe highlighted the BTC versus supply in profit and loss chart, noting that price interaction with these levels has previously marked accumulation phases. In 2023, the shift from high risk to low risk aligned with the beginning of a rally that ultimately delivered gains exceeding 130% during the following year. However, traders caution that the current setup lacks the decisive follow-through buying that characterized prior recoveries, leaving the market vulnerable to renewed volatility. Demand Weakness And ETF Outflows Weigh On Sentiment RugaResearch reports that 30-day apparent demand continues oscillating between positive and negative readings, indicating that sustained buying conviction has yet to dominate the tape. Although selling pressure appears to have moderated in recent sessions, analysts argue that inconsistent demand undermines confidence in a near-term breakout. Exchange-traded fund flows further complicate the outlook, with Bitcoin funds recording negative 90-day rolling averages currently sitting at approximately negative $2.06 billion. Over the same period, cumulative inflows into gold ETFs have exceeded spot Bitcoin ETF flows, suggesting investors may be favoring traditional hedges amid macroeconomic uncertainty. This divergence in capital allocation reflects a more cautious environment compared with the liquidity-fueled optimism that underpinned previous rebounds. Macro Headwinds And Key Price Levels Inflation data also remains a critical variable, as headline Personal Consumption Expenditures hover near 2.9% year over year while core readings remain closer to 3.0%. Core services inflation above 3.4% reinforces the perception that the Federal Reserve may maintain restrictive policy longer than risk assets would prefer. Without clear evidence of easing financial conditions, expectations for aggressive liquidity expansion appear limited, potentially delaying any sustained upward momentum in Bitcoin. CMCC Crest Managing Partner Willy Woo warned that short-term rallies toward $70,000 or $80,000 could encounter renewed selling pressure because “the broader regime is heavily bearish with both spot and futures liquidity deteriorating”. Woo identified $45,000 as a pivotal level aligned with the prior bear market structure, while $30,000 and $16,000 represent deeper historical support zones tied to long-term trend preservation. While bottom signals may be forming, analysts emphasize that major drawdowns outside extraordinary policy interventions have historically required patience before translating into durable recoveries.
