Is Bitcoin Facing a Major Shift? 5 Signals That Will Determine the Next Bull or Bear Cycle

Since the launch of the US spot Bitcoin ETF, the driving logic behind Bitcoin's price has shifted from on-chain signals to off-chain capital and leverage, with five signals jointly determining the direction of this bull and bear cycle.

First, ETF capital flows are the core incremental engine. Data from Gemini and Glassnode show that spot ETFs hold over 515,000 Bitcoins in total, which is 2.4 times the amount issued by miners during the same period. Research confirms that ETF capital inflows have much greater explanatory power for price movements than traditional crypto variables.

In Q1 2024, a net inflow of $12.1 billion directly pushed Bitcoin to a new all-time high; in November 2025, a net redemption of $3.7 billion (the largest monthly outflow since launch) caused the price to fall from the $126,000 range to $80,000. Now, a single-day outflow of $500 million from IBIT has an impact comparable to on-chain whale operations.

Second, perpetual funding rates and futures basis reveal the leverage cycle. The current annualized funding rate is stable at 8%-12%, with peaks above 20% often signaling local tops, while severely negative funding rates correspond to cycle lows.

During the period of negative ETF flows in November 2025, open interest in futures declined and funding rates were low, resonating with the drop in Bitcoin price. When ETF inflows surge but funding remains sluggish, it indicates sustained demand; if funding rates spike but ETF capital stagnates, it signals a short-term leverage-driven bubble.

Third, stablecoin liquidity is the cornerstone of the native market. In 2024, stablecoin supply grew by 59%, with transfer volume reaching $27.6 trillion. Changes in supply and exchange balances often lead price fluctuations.

When ETF capital and stablecoin supply are both positive, bull market momentum is strongest; when both turn negative simultaneously, the speed and magnitude of declines intensify. ETFs serve as 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 historic high in holdings, tightening circulating supply, but the share of short-term "hot capital" has risen to 38%, making the market more sensitive to capital flows. In November 2025, when the price fell below a key cost range, it was directly related to LTH dispersing holdings to ETFs and exchanges, weakening support.

Fifth, macro liquidity shocks are transmitted via ETFs. Bitcoin's beta coefficient to global liquidity changes reaches 5-9 times (gold 2-3 times, stocks 1 time), making it a high-beta macro asset. Changes in Federal Reserve policy, real yields, etc., are quickly transmitted to spot and derivatives markets through ETF capital flows.

The autumn 2025 sell-off was precisely a chain reaction triggered by liquidity tightening and the collapse of rate cut expectations, leading to ETF capital outflows.

These five signals function like interlocking gears: ETFs set the institutional baseline, funding rates amplify or weaken momentum, stablecoins supplement native capital, holder structure determines risk resistance, and macro liquidity controls capital costs. When all five align, prices tend to rise; if they diverge, a decline is highly likely.