Bitcoin (BTC) Risk-Off Signal Drops to Its Lowest Level Since March 2019, Suggesting a Bullish Trend Is Developing

The Bitcoin Risk-Off signal dropped to 23.7, its lowest since March 2019, indicating low correction risk and a high likelihood of a bullish trend developing.

Key Takeaways:

* The Bitcoin Risk-Off signal dropped to 23.7, its lowest level since March 2019, indicating low correction risk and a high likelihood of a bullish trend developing.

* Despite a recent decline in network activity, bullish macro indicators like the Macro Chain Index (MCI) suggest Bitcoin could soon rally above $100,000.

* The Bitcoin Risk-Off signal, which uses onchain and exchange data to assess correction risk, reached its lowest point (23.7) on May 5.

* This is the lowest reading since March 27, 2019, when Bitcoin (BTC) traded around $4,000.

* Currently, the signal is in the blue zone, which has historically signaled low correction risk and a high probability of a bullish trend.

* When the oscillator rises above 60 or enters the red zone, it implies a greater risk of bearish movement.

* In 2019, the same signal was seen at the bottom of a bear market, setting the stage for a staggering 1,550% rally that saw Bitcoin surge above $68,000 in 2021.

* Data from CryptoQuant shows the Risk-Off signal combines six metrics: downside and upside volatility, exchange inflows, funding rates, futures open interest, and market capitalization. Together, they offer a balanced perspective on correction risk.

* The last time the Risk-Off Signal indicated a low-risk investment environment was when Bitcoin traded at $4,000. Several factors can explain the difference in price.

* The launch of spot Bitcoin exchange-traded funds (ETFs) in the US in 2024 brought a new wave of institutional capital into the crypto sphere.

* These ETFs and public companies now hold 9% of the total Bitcoin supply. For instance, ETFs launched in 2023 alone now hold 5.5% of Bitcoin, while public firms like Strategy Collective have 3.5%.

* Data from Fidelity Digital Assets shows that Bitcoin’s volatility has decreased three to four times that of equity indexes, down from triple-digit volatility in its early years, as shown in the chart below. From 2019 to 2025, the 1-year annualized realized volatility dropped by more than 80%.

* This maturing market absorbs capital inflows with less price disruption.

* Growing mainstream adoption, regulatory clarity, and Bitcoin’s increasing role as a hedge against inflation have also contributed to setting a higher price floor compared to 2019.