Momentum Indicators and On-Chain KPIs
After reaching the "Death Cross" on April 7, Bitcoin has now broken through all key moving averages. Bitcoin's performance afterward will provide key information to determine whether we are entering the long-anticipated bull market cycle or continuing the long-term downward trend.
We anticipate that Bitcoin's price will still retrace at some point. At that time, we expect Bitcoin to fall to a low point slightly higher than the previous low (breaking through $76,000). If Bitcoin falls to a lower low point (below $76,000), we expect support around $70,000. If the support holds, the bull market will continue. If it breaks below $70,000, this will further confirm that Bitcoin is in a left-side cycle and the downward trend will persist.
If Bitcoin's price breaks through $95,000 and stabilizes, it will set a new all-time high.
To determine the next market movement, we delve into Bitcoin's KPI data to see if we can find clues to predict Bitcoin's next trend.
ETF Inflows
In February and March, Bitcoin spot ETFs saw net outflows of $3.8 billion, and another $600 million flowed out in the first three weeks of April. However, on April 22, the trend dramatically reversed, with net inflows exceeding $1.54 billion, creating the largest single-day net inflow since Trump's inauguration. We are observing whether this trend can continue, as without participation from the U.S. market and ETF inflows, Bitcoin cannot return to its all-time high.
Spot Trading Volume
Data: glassnode, DeFi Report
Bitcoin's average daily trading volume in April was $8.7 billion, comparable to the levels at the beginning of the bull market in early 2023. During the rebound on April 22, trading volume reached $13 billion but was still less than half of the volume during high volatility days. Additionally, the average number of active addresses in April decreased by 22% compared to November and December last year.
However, investors should recognize that Bitcoin and cryptocurrency markets are generally reflexive. Prices often fluctuate first, with on-chain activity following, so on-chain activity can change quite suddenly.
Short-Term Holders Are Selling
As shown in the graph, Bitcoin has reached the cost basis for short-term holders ($92,500). This is a key support level, consistent with Bitcoin's key moving averages.
Long-term holders created the support level and laid the foundation for setting a new all-time high, but short-term holders are primarily responsible for volatility in the late cycle. Therefore, we are closely monitoring their on-chain behavior as their positions are recovering and becoming profitable.
Here's the English translation: Since early February, short-term Bitcoin holders' holdings have decreased by 11.4%. In the chart below, we can see that transfers to exchanges on April 22 and 23 significantly increased, totaling $4.4 billion. This is not a good sign, as it indicates that "paper hands" are selling. This situation is similar to the early bear market in March 2022, when Bitcoin's price briefly rebounded to the cost basis of short-term holders (after selling from the $69,000 high point). Therefore, this is a signal suggesting that the bear market may continue until the end of this year.
Data: glassnode, DeFi Report
Long-Term Holders Continue Buying
Can long-term holders withstand the selling pressure of "paper hands"? In the chart below, we can see long-term holders returning to the market as buyers. They currently control 69% of Bitcoin's supply, up from the 66% low point on February 1, 2025. [Rest of the translation follows the same pattern, maintaining the original structure and translating all text while preserving any HTML tags and specific terms as specified in the initial instructions.]Summary: Bull Market Trend Remains Unclear
Over the past three months, on-chain activity has shown a downward trend. This is not only true for Bitcoin, but also for Ethereum and Solana.
In the chart below, we can see that the Asia-Pacific region / China is the main factor driving most of this week's volatility, despite significant ETF inflows on April 22 (Tuesday) (not included in the chart). This is a positive signal, but we strongly believe that Bitcoin cannot restore its bull market structure without substantial participation from the US market.
Data: Velo
Stablecoin growth is beginning to weaken, with USDT supply hovering around $140 billion over the past four months. In the past, we found a correlation between the slowdown in USDT stablecoin supply growth and BTC's oscillation/consolidation periods.
The ratio of long-term to short-term holders is a key focus. As mentioned before, long-term holders often establish the bottom/foundation for Bitcoin's trend, but strong market entry by short-term holders is needed to push prices to new historical highs, which is difficult to see currently. A longer oscillation/consolidation period will create a healthier environment for new capital inflows into Bitcoin.
MVRV-Z score analysis shows mixed short-term return results, but the outlook for the next two to three years is more positive. We tend to buy when the Bitcoin score is closer to 1, not now.
We acknowledge that our analysis is based on the past, and investors should understand that the cryptocurrency market is highly reflexive (prices often move first, thereby driving narratives and on-chain activity). Lastly, note that our on-chain data analysis does not include ETFs or Bitcoin on centralized exchanges (approximately 18.7% of supply).
Short-Term Market Will Face Decline
As global capital withdraws from the US market, discussions about "Bitcoin decoupling" have been prevalent. We do not support this view, not because we don't believe Bitcoin will "decouple", but because in fact, Bitcoin is usually not correlated with the Nasdaq index (average correlation coefficient of 0.22, median of 0.23 since January 1, 2017).
Bitcoin and Nasdaq Correlation Coefficient
However, Bitcoin's correlation with the Nasdaq index has increased this year (0.47), and the correlation tends to rise when the Nasdaq index is under pressure (rising to 0.4 when the Nasdaq index drops 2% or more since 2017). This situation is unlikely to change as the Nasdaq index continues to decline.
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As the situation gradually becomes clear, we expect global monetary suppression / yield curve control, and inflation will rise. In this environment, investors will favor non-sovereign hard currencies such as gold and Bitcoin rather than stocks.
Risk Management and Conclusion
We like to wait for the market's big "pie drop", and before seeing them, we are happy to hold cash.
Buying Bitcoin and other assets (such as SOL) at the 2022 low was a "big pie drop". Increasing investment in Bitcoin (including meme allocation) before the interest rate cut and expected Trump victory in September last year was also a "big pie drop". We also believe that converting the portfolio to mainly cash in December and January last year was a "big pie drop". (Odaily note: Bitcoin broke through $100,000 to a historical high in January 2025, then fell)
So, is buying the dips in cryptocurrencies now a "big pie drop" opportunity? For us, the answer is no. Although we are still optimistic about Bitcoin's long-term trend, we also like to keep things simple.
If you believe we are in the midst of a structural reset of global trade and monetary systems (which we also believe), you can ignore Trump's remarks and try to find buy signals amid Bessant's noise. But we believe this will take a long time to become clear, and we haven't even gotten through the end of the first round.
The Federal Reserve is currently doing nothing, so we can confidently hold long-term Bitcoin while maintaining ample cash reserves. In the short term, we may miss some upside opportunities, but we don't mind this.
Everyone needs to act within their comfort zone and risk tolerance. Cash is also a position, and given the abundant opportunities in the cryptocurrency field, we can remain patient.
