Bitcoin IFP Hints At Potential Turnaround: What It Means

Overview

Recent on-chain data indicates that the Bitcoin Inter-exchange Flow Pulse (IFP) has shown early signs of a turnaround, suggesting that tokens are beginning to flow into derivatives platforms. This movement is significant as it reflects changing investor sentiment and potential shifts in market dynamics.

What Happened?

The Bitcoin IFP is an indicator measuring the flow of Bitcoin between spot and derivatives exchanges. A rising value of this metric indicates increased investor transactions from spot to derivatives platforms, signaling heightened speculative interest in the market. Conversely, a decline in the IFP suggests that traders are reducing their risk exposure, resulting in fewer tokens being sent to derivatives markets.

An analyst from CryptoQuant noted that the IFP appears to have recently hit a bottom. The indicator had previously reached a high in the first quarter of 2025 before reversing course, indicating a decline in speculative activity. Following this downtrend, the IFP fell below its 90-day moving average (MA), a crossover that is generally interpreted as bearish, marking periods associated with bear markets or corrections.

Despite the subsequent recovery of Bitcoin, which saw a new all-time high later in 2025, the IFP continued on a downward trajectory. Recently, however, the IFP has demonstrated early signs of a turnaround. This increase in flows to derivatives exchanges coincides with a price recovery for Bitcoin, although the indicator remains significantly below its 90-day MA.

Historically, a breakout above this moving average has often led to bullish price trends for Bitcoin. As such, the current situation could suggest potential positive developments ahead, although it remains uncertain if speculative activity will rise sufficiently to surpass this threshold.

Additionally, the Bitcoin Open Interest, a measure of open BTC positions on all derivatives exchanges, has increased by 3.2% in conjunction with a recent price pullback. This uptick in open interest further illustrates changing dynamics in the derivatives market.

From author

The developments surrounding the Bitcoin IFP and its implications for the derivatives market are noteworthy for traders and investors alike. While the recent signs of recovery in the IFP could hint at a potential shift in market sentiment, the distance from the 90-day MA serves as a reminder of the caution needed in interpreting these signals. The relationship between the IFP and market movements is complex, and continued observation will be essential in understanding future trends.

Impact on the crypto market

• The potential turnaround in the Bitcoin IFP may signal increasing speculative interest in the market.
• A crossover above the 90-day moving average could lead to bullish price action for Bitcoin.
• The increase in Bitcoin Open Interest indicates heightened activity in derivatives markets.
• The current market environment suggests caution, as the IFP remains below its moving average.
• Observing the trends in the IFP and open interest will be crucial for anticipating future price movements in Bitcoin.