Although bitcoin has already lost roughly 50% of its USD value in two months, the asset could be primed for even more adverse price developments. After the death cross and reports suggesting institutions are dumping, new on-chain data revealed that investors had deposited massive portions of their holdings to exchanges, which could lead to another sell-off.

Largest Exchange Inflows Since March 2020

A lot can change in the ever-volatile cryptocurrency market in a few months. In April, BTC seemed destined for new records, which were popping up almost daily until the mid-month peak of $65,000.

While the community sentiment was highly optimistic and members envisioned even a six-digit price tag in the following months, few very could have predicted what followed. And what followed was a gradual decrease in the next thirty days and a substantial price drop in the next week to $30,000 following FUD from China and negative news from Tesla and Elon Musk.

Although bitcoin recovered more than $10,000 in the next few weeks on favorable developments in El Salvador, this rally seemed somewhat weak due to China’s brutal crackdown.

Consequently, BTC started to freefall again and lost all progress in a few days. The fear is back in the market, and investors seemed determined to act on this. CryptoQuant’s researches pointed out that June 21st was the highest daily spike in bitcoin inflows from external wallets to spot exchanges since the mid-March 2020 crash.

Thus, such trading platforms saw their netflows turn “significantly positive for the first time since the distribution in the $50,000 range.”

It’s worth noting that the aforementioned crash last March resulted in a 50% drop for BTC’s price in a day when it bottomed below $4,000.

It Gets Even Worse

Investors sending their bitcoins to exchanges is just the tip of the iceberg when it comes down to bear market signs. As CryptoPotato reported earlier this week, the 50-Day MA crossed below the 200-Day MA, resulting in a death cross for BTC. History shows that similar developments have previously led to adverse price movements.

Separately, other recent reports indicated that institutional investors have not only stopped allocating funds in bitcoin-tracking products, but they have started to make sizeable withdrawals.

Additionally, BTC whales have begun another worrying trend of disposing of their assets, which could lead to further price slumps.

A bullish case isn’t on many people’s minds – but signs are cropping up that Bitcoin may indeed be headed for a trend reversal. Here are some signs explaining why BTC might be overdue for a renewed uptick.

Bitcoin reached its all-time high of almost $65K on April 14, 2021, a little over a month ago. However, over the past 10 days the price violently broke down from the $50K mark and even reached $30K last Wednesday.

The bearish sentiment affected the whole crypto market, as altcoins suffered even more: ETH, which saw its all-time high of $4400 just 11 days ago, dropped earlier today below $1800, before a slight correction as of writing these lines.

Where is the bottom for this ongoing crypto bloodbath? No one knows, but it might be worth keeping an eye on the following optimistic signals.

Crypto Fear & Greed Index: Remember April 2020?

The crypto fear & greed index is now at levels not seen since April 2020, which is about the time when the last crypto market crash occurred, taking BTC down below $4,000, losing over 50% in two days at the peak of the pandemic “Black Thursday.”

In hindsight, it was an amazing time to buy in, but it wasn’t necessarily obvious back then. These days, Bitcoin has fallen over 50% from its ~$65,000 high down to $30,000 on Wednesday – is the index right once again, and is this crash a blessing in disguise for people with stablecoins on the sidelines?

here are some times in the last 2 years fear and greed was sub 15.

make of it what you will. pic.twitter.com/TlLe7B7Q5C

— Bluntz (@SmartContracter) May 23, 2021

S2F Model: Lower Band At $30K

Similarly, the stock to flow (S2F) model indicates that BTC is due for an upwards rebound at the $30,000 mark given its stage in the cycle. The S2F model treats Bitcoin as a commodity (given that it has a fixed supply and limited issuance, similar to gold) and thus factors in circulating supply and production speed in order to determine scarcity and therefore price.

IN BITCOIN’S SHORT HISTORY, the S2F model and 4-year cycle have been proven to be reliable. As been stated by PlanB, the creator of the mode: “The continuation of this crash into the next few weeks (effectively the end of the bull cycle) would invalidate the S2F model and 4-year cycle model,” which have so far been sound – many analysts predict that it’s not yet time for things to turn around for the worse.

S2F currently plots the lower band at $30K, which is this week’s current low.

On-Exchange Stablecoins At ATH, Waiting Aside?

The amount of stablecoins on exchanges is at a yearly ATH – Lex Moskovski opines that there are ‘a lot of bullets waiting to be deployed from the sidelines.’

Of course, this could merely be a function of a large number of new entrants into the cryptocurrency ecosystem, but it most likely means big players are gearing up to bring in large buys.

In addition, John Bollinger, the creator of the Bollinger Bands indicator, believes that BTC might be nearing a local double bottom.

All of these indicators come together and paint a better picture of Bitcoin’s immediate short-term potential than the market is making it out to seem. After the past few days’ waves of incessant bearish moves, it may be time for BTC to take a breather, as RSI indicates that we are heavily oversold.

Vaporware Altcoins Bleeding Out – BTC Dominance Rising

It’s clear that altcoins have more to worry about – Bitcoin dominance has hit a local bottom at ~40% and has been steadily trending upwards (currently sitting at 47%). It’ll most likely recover even more as the market sheds off the excess weight that had been added on by vaporware coins fuelled by the speculative altcoin mania bubble.

Those dogecoin copycats can be easily referred to as “dumb money” and “weak hands.” Once those hands are gone – the smarter money will return to the large-caps cryptocurrencies and, most likely, to the king of them, which is Bitcoin.