Key Takeaways:
- The Bitcoin Risk-Off signal has dropped to its lowest level since March 2019, suggesting low correction risk and the potential for a bullish trend.
- Despite a recent decline in network activity, other macro indicators suggest Bitcoin may soon break above the $100,000 mark.
On May 5, 2025, the Bitcoin Risk-Off signal, an important indicator for assessing market correction risk, dropped to a low of 23.7. This represents the lowest level witnessed since March 27, 2019, when Bitcoin was valued at approximately $4,000. Currently in the blue zone, this signal historically points to low correction risk and a heightened probability for bullish price movements. A movement above 60 on the oscillator could signal increased risk for bearish trends.
In 2019, a similar drop in the Risk-Off signal preceded a remarkable rally, culminating in Bitcoin surging by 1,550% to reach prices above $68,000 in 2021.
According to data from CryptoQuant, the Risk-Off signal is a composite of varied metrics, including volatility and exchange inflows, that together paint a comprehensive picture of market stability. Notably, the last time this indicator suggested a low-risk investment scenario, Bitcoin was priced at $4,000.
The launch of spot Bitcoin exchange-traded funds (ETFs) in the US in 2024 has substantially shifted market dynamics, welcoming institutional investments and increasing demand. ETFs and public firms currently control approximately 9% of the total Bitcoin supply.
🚨LATEST: ETFs and public companies now hold 9% of Bitcoin’s supply! Spot ETFs own 5.5% just 1 year after launch, while public firms like Strategy hold 3.5%. Institutional adoption is reshaping $BTC’s market—less supply, shifting dynamics. 📈📈
(h/t: @ecoinometrics) pic.twitter.com/iC892RveP2— Cointelegraph Markets & Research (@CointelegraphMT) May 3, 2025
Additionally, research from Fidelity Digital Assets reveals that Bitcoin’s volatility has substantially decreased, now being three to four times less volatile than equity indexes. With volatility dropping more than 80% since 2019, this maturation allows Bitcoin to accommodate capital inflows with reduced price fluctuations.
Bitcoin Macro Indicators Signal Potential Growth
Despite a sharp decline in Bitcoin’s network activity index, anonymous crypto analyst Darkfost suggests this does not indicate a bearish trend. Instead, the favorable macro indicators imply that this might be an opportune moment for long-term investors to enter the market.
Related: How much Bitcoin can Berkshire Hathaway buy?
This article does not contain investment advice or recommendations. All investment moves involve risk, and readers should conduct their own research prior to making any investment decisions.
