Bitfinex Warns of Bearish Signals as Bitcoin Continues to Consolidate

Recently, Bitcoin’s (BTC) price action has placed the asset in an established range. The leading cryptocurrency has maintained the $91,000-$102,000 even amid sustained geopolitical tensions. This consolidation phase has now extended over 81 days, keeping its price stagnant despite periods of volatility.

While BTC continues to consolidate, analysts at the crypto exchange Bitfinex have identified a bearish signal that suggests the cryptocurrency could see more downside in the coming weeks.

BTC in Prolonged Consolidation Phase

The ongoing trade tensions have led to an overall decline in volatility, with bitcoin’s weekly performance recording only a 4.3% peak-to-trough movement and closing with a 0.82% gain in the past week.

Bitfinex analysts said this continued sideways price action reflects little strong directional momentum despite periods of choppy markets. Bitcoin has shown stability, supported by its holders, who have maintained their positions in an uncertain macro environment. Analysts also said bitcoin’s lack of volatility highlights a cautious market sentiment and the absence of clear directional momentum.

While BTC is down slightly on a monthly basis, the altcoin market has been hit harder. This shows that a separation is beginning to form between BTC and the rest of the crypto market. It also indicates that there is a shift in investor focus, with more capital flowing into Bitcoin compared to altcoins.

“It suggests the commencement of a new type of market environment where altcoins are going through entire market cycles while BTC continues to be more macro-correlated and shows more maturity as a risk asset,” Bitfinex analysts said.

IFP Turns Bearish

Although bitcoin’s price has been relatively flat over the past seven days, realized losses recorded by investors are among the largest observed in this bull cycle. This suggests that BTC is experiencing some sell-side pressure. Besides that, the market is seeing signs that BTC could decline further in the near term.

The Inter-Exchange Flow Pulse (IFP) has flashed a negative signal; this metric tracks the movement of BTC between spot and derivative exchanges. BTC flowing into derivative exchanges signals a bullish period, while outflows from such platforms into spot exchanges indicate a bearish period.

For the first time since June 2024, the IFP turned bearish on February 15, suggesting a possible decline in market sentiment and the beginning of a bearish phase. However, Bitfinex noted that the signal could be false because the IFP is still above its 90-day moving average.

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