Recent on-chain and sentiment data for Bitcoin are showing early signs of a potential market turnaround, even as the price continues to exhibit significant volatility. According to a CryptoQuant analysis, the Bitcoin Inter-exchange Flow Pulse (IFP), an indicator measuring the flow of BTC between spot and derivatives exchanges, has recently shown signs of reversing its prolonged downtrend.
The IFP hit a high in Q1 2025 and then entered a steady decline, falling below its 90-day moving average—a level CryptoQuant associates with bear markets or corrections. Despite Bitcoin setting a new all-time high later in 2025, the IFP remained in this bearish zone. The recent uptick suggests speculative interest may be re-entering the market, as tokens begin moving back into derivatives platforms. However, the indicator remains notably below its 90-day MA; a crossover above this line has historically preceded bullish price action.
Concurrently, market sentiment is showing a subtle improvement. Bitcoin's Fear and Greed Index has crossed above its 90-day average, currently sitting near a reading of 30, which indicates easing skepticism even as overall trader sentiment remains cautious. Historically, such sentiment shifts have preceded major price movements by several weeks.
This sentiment shift occurs against a complex macroeconomic backdrop. Global liquidity, driven significantly by China's M2 money supply growth (which reached roughly 49 trillion in 2026), remains at record highs. However, capital has recently favored traditional hedges like gold and silver over Bitcoin. The cryptocurrency's short-term price action has become more closely tied to ETF flows and shifting risk appetite than to pure liquidity metrics.
Data from CoinGlass highlights this volatility: strong ETF inflows in mid-2025 helped push Bitcoin toward the $120,000-$130,000 range, while significant outflows later in the year—with single-day withdrawals nearing $1.2 billion—contributed to a price drop below $100,000. As of January 2026, monthly net flows were around $1.2 billion with more outflow than inflow days.
Amid these signals, Bitcoin's price has experienced sharp moves, plunging from $95,000 to $91,200 in recent days, even as Bitcoin Open Interest on derivatives exchanges surged by 3.2%.
