Bitcoin Inter-Exchange Flow Pulse (IFP) Data Turns Red Again: Is This a Bear Trap?
1- What is IFP?
Inter-exchange Flow Pulse (IFP) measures Bitcoin flows in spot and derivative exchanges using CryptoQuant data. These flows provide insights into market trends.
Rising IFP: If more Bitcoin is flowing into derivative exchanges, it is generally considered a sign of a bullish period.
Falling IFP: If Bitcoin is flowing out of derivative exchanges, it is generally considered a sign of a bearish period.
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 (the red areas on the graph).
2- Example from June 2016
A 55-day bear trap.
In June 2016, the IFP stayed below its 90-day average for about 55 days, signaling a bear period. Once it crossed above this average, a significant bull run occurred.
3- Will History Repeat?
Looking at current data, we observed what I believe was a bear trap in the recent (2024) bull rally.
The IFP priced below its 90-day average from December 14, 2023, to February 24, 2024. During this period, the Bitcoin price saw a correction from 46K to as low as 39K. Subsequently, we witnessed Bitcoin reaching a new all-time high.
We are currently experiencing a similar situation.
Conclusion
As of now
IFP: 668.7K
IFP SMA90: 675.5K
If the IFP rises above its 90-day moving average again, we might see the bulls gaining strength once more.
Written by burakkesmeci