Bitcoin Market Analysis

Bitcoin (BTC) has experienced a sharp correction, dropping as much as 23% from its recent peak, sparking concerns about a potential prolonged bearish phase.

Cryptocurrency analytics firm CryptoQuant has launched the Bullish Score Index to evaluate whether this decline is simply a temporary correction within a broader bull cycle or the beginning of a deeper downturn.

CryptoQuant’s Bull Score Index, which analyzes ten essential indicators of network activity, investor profitability, Bitcoin demand, and market liquidity, currently scores 20, the lowest since January 2023. Ranging from 0-100, the index measures the percentage of bullish metrics in the market; higher values suggest a strong investment climate, while lower values indicate a bearish outlook.

Historically, Bitcoin has only maintained major price rallies when the Bullish Score Index is above 60. In contrast, sustained readings below 40 have corresponded with bear markets. Given the index’s current reading, CryptoQuant analysts warn of weak market conditions that could signal further downside risk.

Prolonged readings below 40 could confirm the continuation of bearish conditions, similar to previous downtrends. While Bitcoin has undergone similar corrections during past bull cycles, the current weak market environment could hinder a quick recovery unless fundamental metrics improve, analysts indicate.

Chart showing the bullish index, shared by CryptoQuant.

This is not investment advice.