5 Major Signals of Bitcoin Determining the Direction of the Bull and Bear Market

Since the launch of the Bitcoin Spot ETF in the United States, the price-driving logic of Bitcoin has shifted from on-chain signals to off-chain funds and leverage, with five signals collectively determining the direction of this bull-bear cycle.

First, ETF capital flow is the core incremental engine. Data from Gemini and Glassnode shows that the total holdings of the spot ETF exceed 515,000 Bitcoins, which is 2.4 times the issuance volume of miners during the same period. Research confirms that the capital inflow from ETFs has a much greater explanatory power for prices than traditional crypto variables.

In the first quarter of 2024, there was a net inflow of $12.1 billion, directly pushing Bitcoin to break its historical high; in November 2025, a net redemption of $3.7 billion (the largest monthly outflow since its launch) caused the price to drop from $126,000 to the $80,000 range. Now, a daily outflow of $500 million from IBIT has an impact comparable to that of on-chain whales.

Secondly, perpetual financing and futures basis reveal the leverage cycle. The current annualized financing rate is stable at 8%-12%, with peaks exceeding 20% often indicating a local top, while severely negative financing rates correspond to cyclical lows.

During the negative period of ETF fund transfers in November 2025, the number of outstanding futures contracts decreased, and the financing rate remained low, creating a resonance with the decline in coin prices. When ETF inflows surge while financing remains sluggish, it indicates sustained demand; however, if the financing rate skyrockets while ETF funds stagnate, it signals a short-term bubble of leveraged speculative buying.

Thirdly, the liquidity of stablecoins is the cornerstone of the native market. In 2024, the stablecoin supply is expected to grow by 59%, with transaction volumes reaching $27.6 trillion, and changes in its supply often precede fluctuations in coin prices relative to exchange balances.

When the ETF funds and the supply of stablecoins are both in positive territory, the bull market momentum is strongest; if both turn negative simultaneously, it will accelerate the speed and magnitude of the decline. The ETF is the institutional entry point, while stablecoins determine the marginal capital scale of native traders.

Fourth, the evolution of holder structure reshapes market resilience. Long-term holders (LTH) once reached a historical high in holdings, tightening circulating supply, but the proportion of short-term “hot capital” has risen to 38%, making the market more sensitive to capital flows. When prices fell below the key cost range in November 2025, it was directly related to LTH diversifying their holdings into ETFs and exchanges, weakening support.

Fifth, macro liquidity transmits shocks through ETF. The beta coefficient of Bitcoin to changes in global liquidity reaches 5-9 times (2-3 times for gold, 1 time for stocks), making it a high beta macro asset. Changes in Federal Reserve policy, real yields, etc., will quickly transmit through ETF fund flows to the spot and derivatives markets.

The autumn sell-off in 2025 is a chain reaction triggered by liquidity tightening and the collapse of interest rate cut expectations, resulting in capital outflow through ETF.

These five major signals are like interlocking gears: The ETF establishes the institutional base, the financing rate amplifies or weakens momentum, stablecoins supplement native funds, the holder structure determines risk resistance ability, and macro liquidity controls capital costs. When the directions of the five align, coin prices are likely to rise; if there are divergences, it is highly probable to trigger a decline.