Bitcoin IFP Data Signals Potential Price Rally
Bitcoin price has seen small increases in the past 24 hours as on-chain metrics surface.
On-chain Data Suggests Rally
A new report from digital asset analysis firm CryptoQuant indicates that Bitcoin’s Inter-Exchange Flow Pulse (IFP) data could signal a price rally. The asset's IFP is currently below the 90-day moving average, setting the stage for a possible breakout if it surpasses this average. The IFP measures Bitcoin flows to derivative exchanges, which helps predict market trends.
In simple terms:
- Bitcoin flowing to derivative exchanges hints at a price increase.
- Outflow of Bitcoin indicates a potential price drop.
“The strategy suggests investing in Bitcoin when the IFP enters an upward trend. As seen in the graph, changes in the trend of Bitcoin flows (defined by the IFP crossing its 90-day moving average) signal bull and bear markets.”
This scenario occurred in 2016 and 2024:
- In 2016, Bitcoin’s IFP was below the 90-day moving average for 55 days before it led to a bull run.
- Between December 2023 and February 2024, the same thing happened. Bitcoin's price dropped from $46k to $39k before hitting an all-time high of over $73k.
Currently, with the IFP below the 90-day average, bulls (optimistic investors) are hoping for a breakout.
Bitcoin To Drive Wider Growth
Bitcoin’s performance often leads to a wider market rally. In the past 24 hours, the positive momentum in Bitcoin has resulted in slight gains for other cryptocurrencies.
Recently, when Bitcoin fell below $65k, it triggered outflows in other assets such as altcoins and meme coins. A rise in Bitcoin prices can lead to more gains and improved market sentiment.
Additionally, Bitcoin ETFs (Exchange Traded Funds) can boost crypto performance as investments continue to flow into these funds.
About the Author Disclaimer
David, a finance news contributor with four years of experience in Blockchain Technology and Cryptocurrencies, is passionate about emerging technologies. He is known for breaking news and has covered various topics, including regulation, partnerships, crypto assets, stocks, NFTs, and more.
Outside the financial world, David enjoys cycling and horse riding.
The content presented may include the author's personal opinions and is subject to market conditions. It's vital to conduct your own market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for personal financial loss.
