Bitcoin (BTC) has faced considerable challenges throughout 2025, failing to build on the momentum it generated during the last months of 2024. Despite continued hopes that the leading cryptocurrency will experience one final rally to new all-time highs, recent on-chain data suggests that a Bitcoin bear market may have already arrived.

An analysis of Bitcoin’s on-chain metrics by a well-known crypto analyst with the pseudonym “Maartunn” has raised significant concerns about the future price trajectory of the cryptocurrency. The analyst focused on the Inter-Exchange Flow Pulse (IFP), a critical on-chain indicator that tracks Bitcoin flows between spot and derivative exchanges. The metric has recently turned bearish, pointing to a potential shift in market sentiment and investor behavior.

The IFP metric works by observing Bitcoin transfers between spot exchanges, where actual Bitcoin is bought or sold, and derivative exchanges, where traders speculate on price movements without owning the underlying asset. A significant movement of BTC to derivative exchanges typically signals a bullish phase, as it suggests that traders are opening long positions. Conversely, a rise in Bitcoin flows into spot exchanges—where BTC is moved out of the derivatives market—indicates that traders are closing long positions and reducing their risk exposure. This behavior typically marks the beginning of a bearish period.

The recent IFP data shows a notable shift, with more Bitcoin moving from derivative exchanges to spot exchanges, signaling that investors are beginning to close their long positions and move out of the market. This change has led to concerns that Bitcoin could be entering a prolonged bearish phase. A similar bearish signal occurred in mid-2024, which was followed by Bitcoin’s price stagnating and experiencing sideways movement for several months. The last time this metric turned bearish for an extended period was in 2022, during which Bitcoin’s price dropped dramatically from above $60,000 to below $20,000.

At the time of writing, Bitcoin is trading at approximately $97,500, with no significant movement in the past 24 hours. Over the past week, BTC has seen a modest 1.2% increase, further suggesting that market participants are uncertain about the cryptocurrency’s next big move. Despite some optimism, these relatively stagnant movements could indicate that investor sentiment is weakening, making it harder for Bitcoin to break through critical price resistance levels.

Bitcoin’s current position in the market reflects a broader trend of reduced market risk appetite. With the IFP indicator signaling a potential decline in bullish sentiment, many investors are starting to reduce exposure to Bitcoin, shifting away from leveraged positions in the derivatives market. This may suggest that many are bracing for a prolonged bear market, especially if Bitcoin cannot regain upward momentum soon.

To make matters worse, the broader cryptocurrency market has been facing headwinds from macroeconomic factors and market uncertainty. Investors are taking a more cautious stance, awaiting clearer signals regarding regulatory developments, economic conditions, and market liquidity.

In conclusion, the recent IFP shift toward bearishness may indicate that the Bitcoin bear market is not just a possibility but a near-term reality. While there remains some hope for a potential rally, the declining risk appetite from investors, as indicated by the current on-chain metrics, suggests that Bitcoin may face further challenges in the coming months. Unless a drastic change occurs in market sentiment, it seems unlikely that Bitcoin will experience the breakout many traders are hoping for.