Bitcoin Macro Index: Bear Signal Casts Doubt on $110K Price

'Bitcoin Macro Index' bear signal casts doubt on $110K BTC price return

Bitcoin (BTC) is facing the risk of entering a new bear market due to a concerning bearish divergence in a variety of BTC price metrics. The discussion arose from the Bitcoin Macro Index provided by Capriole Investments, raising alarm among Bitcoin commentators.

Bitcoin Macro Index shows signs of decline, creator expresses concern

With BTC/USD struggling to regain its position near all-time highs, onchain metrics are starting to lose their bullish momentum. The Bitcoin Macro Index, established by Capriole in 2022, utilizes machine learning to assess data from numerous metrics that founder Charles Edwards believes offer valuable insights into Bitcoin's historical cycles.

"The model exclusively focuses on onchain and macro-market data, omitting price data and technical analysis as inputs," Edwards explained when introducing the tool. Since late 2023, the metric has been recording lower highs while the price continues to reach higher highs, resulting in a bearish divergence. This divergence, commonly observed in past bull markets, could imply that BTC/USD has already reached a long-term peak.

Reacting to a print of the Index shared on social media, Edwards admitted, "Not great." However, he added, "But... when Bitcoin Macro Index turns positive, I won't be fighting it."

Capriole Bitcoin Macro Index. Source: @A_Trade_Academy/X

BTC price metrics facing challenges in recovery

Multiple analytics sources have indicated that Bitcoin is currently grappling with macroeconomic uncertainty. In a recent blog post, onchain analytics platform CryptoQuant highlighted four onchain metrics experiencing volatility.

"All these metrics suggest that Bitcoin is encountering significant turbulence in the short to mid-term," stated contributor Burak Kesmeci. However, there is no indication that Bitcoin has reached an overheated or cycle-top level.

Bitcoin IFP chart (screenshot). Source: CryptoQuant

The list of metrics includes the Market Value to Realized Value (MVRV) and Net Unspent Profit/Loss (NUPL), alongside the Inter-Exchange Flow Pulse (IFP) metric, which turned bearish in February. Kesmeci emphasized that for a change in the situation, IFP must rise above its 90-day simple moving average (SMA).

This article does not provide investment advice or recommendations. All investment decisions involve risks, and readers are encouraged to conduct their own research before making any decisions.