Analyst Says Bitcoin Indicators Show Early Signs of Market Recovery

• Stablecoin liquidity rose by ~$8B since February, signaling potential improved market trading conditions.

• Inter-exchange Flow Pulse turned positive, indicating more Bitcoin moving to derivatives platforms.

• Long-term holders retain ~79% of supply, showing gradual supply transfers rather than sharp shifts.

Signs of change are emerging in the Bitcoin market after months of weakness. According to CryptoQuant analyst Darkfost, several indicators have begun improving despite a broader bear phase that started in October. The analyst highlighted rising stablecoin liquidity and shifts in exchange flows, although he cautioned that more data is needed to confirm any lasting market change.

Market Indicators Begin To Shift

Darkfost reported that Bitcoin remains within the bear market that began in October. However, several metrics have recently started to stabilize. According to Darkfost, three indicators currently show improvement.

These include liquidity conditions, on-chain trader profitability, and the Inter-exchange Flow Pulse indicator. Liquidity data provides the first signal. Since early February, the total stablecoin market capitalization has stabilized and increased.

The analyst said the market added roughly $8 billion in stablecoin value during that period. Stablecoin liquidity often influences trading activity across crypto markets. Meanwhile, another indicator also changed direction. The Inter-exchange Flow Pulse recently turned positive.

According to Darkfost, that shift shows more Bitcoin moving toward derivatives platforms. This movement may indicate growing trader activity in futures markets. However, the analyst stressed that these changes remain early signals. More indicators must strengthen before confirming a broader trend.

Long-Term Holders Still Dominate Bitcoin Supply

Darkfost also examined supply distribution between long-term and short-term Bitcoin holders. The analyst said the current cycle differs from earlier market patterns. Notably, long-term holders still control most of the circulating supply.

According to CryptoQuant data, they currently hold around 79 percent of all Bitcoin. Earlier cycles showed sharper distribution changes. For example, in 2021 long-term holder supply dropped from 82 percent to 70 percent within six months.

That shift occurred when short-term traders absorbed large volumes of selling pressure. However, the current cycle followed a different structure.

Supply Transfers Occur in Multiple Waves

Instead of one large transfer, supply moved gradually during this cycle. The analyst identified six waves of supply transfer between long-term and short-term holders. During each phase, short-term participants absorbed selling pressure.

Over time, some of those traders became long-term holders themselves. According to Darkfost, this pattern reflects stronger liquidity conditions. New participants also entered the market during the cycle. These include investors accessing Bitcoin through exchange-traded funds and digital asset treasuries.