Bitcoin Enters a Phase of Heightened Volatility
Bitcoin has entered a phase of heightened volatility as multiple on-chain metrics flash signals of potential turbulence. While the leading cryptocurrency recently touched new highs, data from CryptoQuant suggests that the market might be nearing a crucial inflection point rather than an overheated peak. These metrics, including Net Unrealized Profit/Loss (NUPL), Market Value to Realized Value (MVRV) Ratio, Inter-exchange Flow Pulse (IFP), and the Bull-Bear Market Cycle Indicator, indicate a shift in sentiment and market conditions.
Do 4 Different Cyclical On-Chain Metrics Signal the End of Bitcoin’s Bull Market?
“All of these metrics suggest that Bitcoin is experiencing significant turbulence in the short to mid-term. However, none of them indicate that Bitcoin has reached an overheated or cycle-top…pic.twitter.com/tPw74wqERy— CryptoQuant.com (@cryptoquant_com) March 25, 2025.
The NUPL indicator, which measures the proportion of market participants in profit, has been gradually declining from previous highs. Historically, a high NUPL value suggests euphoria and potential for a market top, while a sharp decline into negative territory signals market capitulation. Currently, the indicator hovers around 0.4, a zone that historically precedes market corrections but does not confirm an immediate downturn. If NUPL fails to maintain its current level, it could indicate growing risk aversion among investors.
The MVRV Ratio, which compares Bitcoin’s market value to its realized value, has also shown signs of moderation. Currently sitting at approximately 1.9, this metric is far from the euphoric levels seen in previous cycle tops above 3.5. This suggests that while Bitcoin may be experiencing local price peaks, it has not yet reached the extreme overvaluation levels that typically signal a final bull run climax. Nonetheless, any further sharp rises in MVRV could indicate growing speculative excess and a potential correction.
IFP & Cycle Indicators Signal Market Shift
The IFP metric, which tracks the net flow of Bitcoin between exchanges, has also provided significant insights. Recent data shows an increase in exchange inflows, often associated with selling pressure. Periods of high IFP values have historically aligned with market corrections, as traders move assets onto exchanges to take profits. While IFP is not yet at extreme levels, continued increases could indicate an approaching sell-off phase, especially if large holders begin to offload their positions.
The Bull-Bear Market Cycle Indicator, which synthesizes various on-chain and market sentiment metrics, presents a more complex picture. While it has entered an early bullish phase, it has not yet reached the overheated territory seen in previous cycle tops. This suggests that Bitcoin remains in a bullish structure but is at risk of temporary corrections. Historically, past bull markets have shown prolonged periods of extreme bullishness before reaching a definitive peak, and current conditions suggest that Bitcoin is not yet at that stage.
This current setup bears similarities to Bitcoin’s past bull market transitions. In 2017 and 2021, Bitcoin experienced multiple short-term corrections before reaching its final peak. However, unlike those cycles, the macroeconomic environment in 2024 is markedly different. Factors such as global liquidity tightening, regulatory developments, and institutional involvement in Bitcoin could play a critical role in shaping its next move.
Recent comparisons have been drawn to the carry trade crisis of August 2024, when macroeconomic pressures led to a temporary decline in Bitcoin’s price despite strong fundamentals. If similar external pressures emerge, they could accelerate Bitcoin’s next correction phase.