Several key on-chain indicators are signaling caution for Bitcoin, pointing to bearish market conditions for the leading cryptocurrency.
In a new post on X, CryptoQuant analyst Darkfrost discussed what on-chain data suggests about the current Bitcoin market. The analyst shared a heatmap displaying the signals from 10 key metrics. These indicators cover various aspects of the network, such as the MVRV Z-Score, which measures overall investor profitability, and the Trader Realized Price and Trader On-chain Profit Margin, which track the profit-and-loss status of short-term holders.
All indicators on the heatmap are currently showing red, suggesting conditions are not favorable for a bull market. “As long as that remains the case, it is hard to imagine BTC reaching new highs in the short term,” noted Darkfrost.
The red signals spread across the heatmap as Bitcoin’s price turned bearish. However, a couple of metrics had been bearish even before the market downturn: the Inter-Exchange Flow Pulse and the CryptoQuant Network Activity Index.
The Inter-Exchange Flow Pulse tracks the flow of funds between spot and derivatives exchanges. A bearish reading indicates a lack of speculative momentum in the market. This metric turned red during the decline in early 2025 and has remained there since.
The CryptoQuant Network Activity Index, which gauges transaction activity on the Bitcoin blockchain, left bullish territory in late 2024. Activity has since remained mostly at bearish levels, with only a few brief exceptions.
Most other metrics didn’t turn red until the price decline in November 2025. The last to flip was the Trader On-Chain Profit Margin, which was green during January’s recovery rally but turned bearish after the most recent price drop.
In other news, CryptoQuant community analyst Maartunn highlighted in an X post that Bitcoin short-term holders have recently shown signs of taking losses. This group includes investors who bought their coins within the last 155 days.
As shown in the chart below, these holders have recently increased their loss-related deposits to exchanges. Since investors typically transfer tokens to centralized exchanges when they intend to sell, these loss deposits may indicate that some short-term holders are capitulating.
At the time of writing, Bitcoin is trading around $65,300, down over 2% in the past week.
Frequently Asked Questions
Frequently Asked Questions About Bitcoins OnChain Data Downturn
Beginner Questions
Q What is onchain data in simple terms
A Its the public record of all Bitcoin transactions stored on the blockchain Think of it as the verified permanent ledger that shows activity like money moving between wallets new coins being created and how many people are holding Bitcoin
Q What does a downturn in this data mean
A It means key metrics from this public ledger are showing a decline This typically includes fewer new transactions less total value being moved a drop in new users and sometimes a decrease in the number of coins being held for the long term
Q Is this the same as the Bitcoin price going down
A Not exactly but theyre often related Onchain data measures activity and behavior on the network itself A downturn in data can signal weakening fundamentals which may lead to or coincide with a price drop but they are separate measurements
Q Should I be worried if I own Bitcoin
A Not necessarily Downturns are a normal part of market cycles Onchain data provides context but doesnt predict the future with certainty Its one of many tools for understanding market health
Intermediate Questions
Q What are the key indicators that are declining
A The main ones are
Transaction CountVolume Fewer transactions or less total value being settled onchain
Active Addresses A decrease in the number of unique addresses sending or receiving Bitcoin suggesting lower user activity
Network Hash Rate Growth Stalling While hash rate is often resilient a plateau or drop can indicate miner stress
Exchange Flows More Bitcoin flowing into exchanges can signal intent to sell while accumulation in private wallets suggests holding
Q What usually causes an onchain downturn
A Common causes include
Bear Market Sentiment Prolonged price drops lead to less trading and economic activity
High Transaction Fees When fees are high people make fewer small onchain transactions
Macroeconomic Factors Interest rate hikes or economic recessions can reduce risk appetite for assets like Bitcoin