The Bitcoin Macro Index Sounds The Alarm: Towards A False Summit At $110,000?

Bitcoin is climbing, but some underlying signals are worrying. There is mention of the Bitcoin Macro Index, which shows a bearish divergence. Should we fear a market slowdown? Decoding an indicator that could change everything!

Bitcoin is climbing, but the key indicator is dropping

The BTC price is touching new heights. However, a subtle signal challenges this euphoria. It is the Bitcoin Macro Index, designed by Capriole in 2022. The index raises alerts about a potential trend reversal.

Good to know:

Unlike other models, this index excludes the BTC price. It relies solely on on-chain and macroeconomic data, analyzed through machine learning.

Since the end of 2023, the Bitcoin Macro Index has been tracing declining peaks even as the flagship cryptocurrency records successive highs. A bearish divergence is setting in. Observed during previous cycles, this phenomenon suggests that the market may have reached a long-term peak.

According to Capriole founder Charles Edwards, this signal is not good. He even goes so far as to say that the Bitcoin price will reposition itself if the index becomes positive again.

Should we believe in a market reversal?

Other indicators reinforce this caution. CryptoQuant mentions several metrics currently in turbulent territory:

• Market Value to Realized Value (MVRV);
• Net Unspent Profit/Loss (NUPL);
• Inter-exchange flow (IFP).

The latter has turned red since February. To reverse this trend, the IFP should surpass its 90-day moving average.

Despite these signals, nothing currently indicates overheating or a cycle peak. The market remains uncertain, caught between enthusiasm fueled by Bitcoin Spot ETFs and caution dictated by fundamentals.

Crypto investors now have a vested interest in closely monitoring the Bitcoin Macro Index. If it rebounds, the bullish dynamic could resume. Otherwise, the specter of a false peak looms over $110,000. Therefore, the time is not for panic, but for strategic vigilance!