By Chris Hollingworth 
Bitcoin (BTC) is facing the risk of entering a new bear market as a significant collection of BTC price metrics has revealed a “bearish divergence.” This concern was highlighted in a social media discussion on March 27, where Bitcoin commentators pointed out troubling signals from Capriole Investments’ Bitcoin Macro Index.
The Bitcoin Macro Index, developed by Capriole in 2022, leverages machine learning to analyze data from a wide range of metrics that founder Charles Edwards believes “offer a strong indication of Bitcoin’s relative value across historic cycles.” Unlike traditional models, this index focuses solely on onchain and macro-market data, excluding price data and technical analysis inputs.
Since late 2023, the Bitcoin Macro Index has been showing lower highs while the price of BTC has been reaching higher highs, creating a “bearish divergence.” While this pattern has been observed in previous bull markets, it could suggest that BTC/USD has already reached a long-term peak, according to experts.
Capriole’s Bitcoin Macro Index creator, Charles Edwards, expressed concerns over this development, acknowledging the negative implications of the bearish divergence. However, he remains open to a potential shift in the index’s direction, stating, “But… when Bitcoin Macro Index turns positive, I won’t be fighting it.”
Meanwhile, various analytics sources have also indicated that Bitcoin is grappling with macroeconomic uncertainties this year. In a recent blog post, onchain analytics platform CryptoQuant highlighted four onchain metrics that are currently showing signs of instability, suggesting turbulence in the short to mid-term for Bitcoin.
These metrics include the Market Value to Realized Value (MVRV), Net Unspent Profit/Loss (NUPL), and the Inter-Exchange Flow Pulse (IFP) metric, which turned bearish in February. Experts believe that for the situation to improve, the IFP metric needs to surpass its 90-day simple moving average.
It is important to note that this article is for informational purposes only and does not provide investment advice. Readers are advised to conduct their own research and analysis before making any investment decisions due to the inherent risks involved in financial markets.
