Bitcoin”s on-chain indicators have recently shown a significant shift towards bearish trends, raising alarms among traders and analysts. On February 13, CryptoQuant analyst Darkfrost alerted the community that nearly all major on-chain metrics for Bitcoin are currently indicating negative signals.
The analysis, based on a heatmap that evaluates ten different network measurements, reveals a concerning outlook for bullish investors. Metrics such as the MVRV Z-Score, which assesses overall profitability among holders, along with the Trader Realized Price and Trader On-chain Profit Margin, are all displaying red signals. Darkfrost emphasized that these indicators make it improbable for Bitcoin to reach new highs in the near future.
As Bitcoin”s price began to decline, the bearish indicators intensified. Some metrics had already turned negative prior to the price drop, with the Inter-Exchange Flow Pulse and CryptoQuant Network Activity Index showing red flags in early 2025. The Flow Pulse monitors transactions between spot and derivatives exchanges, indicating a lack of speculative activity. Meanwhile, the Network Activity Index has remained largely bearish since late 2024, reflecting a decline in transaction volume on Bitcoin”s blockchain.
Adding to the bearish sentiment, short-term Bitcoin holders are currently selling at losses. Analyst Maartunn pointed out in a recent post that investors who purchased Bitcoin within the last 155 days have begun moving their tokens to exchanges, a typical behavior seen when holders intend to sell. This influx of loss deposits to exchanges is often interpreted as capitulation, suggesting that these investors are surrendering their positions.
At present, Bitcoin is trading around $65,300, marking a decrease of more than 2% over the past week. The sustained bearish readings from the Inter-Exchange Flow Pulse, which has remained red since early 2025, signify a lack of speculative interest, making it difficult for any upward momentum to emerge. Analysts continue to observe these on-chain indicators closely, as they reflect the market”s cautious mood.
Recent reports from Glassnode indicate a significant drop in Bitcoin”s on-chain activity, with new addresses decreasing by approximately 15% from the previous month. This decline suggests a diminishing interest among new investors at the current price levels. Further compounding the issue, Binance has reported a 20% drop in Bitcoin futures trading volume month-over-month as of February 10, a clear sign of the broader market”s reluctance to engage in substantial speculative trading.
JP Morgan analysts noted that Bitcoin”s recent price fluctuations are influenced more by macroeconomic factors rather than internal dynamics within the cryptocurrency market. They highlighted a strong correlation between Bitcoin and traditional financial markets, especially in light of recent economic data releases.
In contrast, ARK Invest”s report suggests a long-term bullish outlook for Bitcoin, despite short-term bearish indicators. The firm asserts that Bitcoin”s fundamentals, including network security and institutional adoption, continue to strengthen, although current market conditions pose challenges.
With the Inter-Exchange Flow Pulse and Network Activity Index remaining in the red, the market appears to be in a state of stagnation. Traders are awaiting a catalyst that could alter the current trajectory, but such a trigger remains uncertain. Historical patterns indicate that similar clusters of bearish metrics preceded major corrections in the past, with recovery taking several months.
In summary, Bitcoin”s current price of approximately $65,300 reflects a cautious market sentiment, as traders grapple with ongoing uncertainty. The persistent bearish signals across critical metrics suggest that traders are hesitant to commit to bullish positions for the time being.
