Short -term price dips are pairs for the course in Bitcoin’s (BTC) bull markets, but an indicator suggests that the current fall from recent heights may reflect a deeper structural shift in market dynamics.
Bitcoin traded about $ 84,000 as European morning hours on Friday, a 23% fall from its January -Top of $ 109,000. The fall has rattled investors and gave rise to debate about whether this marks the start of a new bear market or a volatile correction within a wider bullish trend.
Such withdrawals are not uncommon – BTC has weathered similar decreases in earlier bull cycles, often rebounding to new heights. Still, the on-chain analysis company Cryptoquant’s Bull Score Index, a compound metric designed to measure Bitcoin’s market health, shows signs of deeper weakness.
The index evaluates ten critical indicators – exciting network activity (such as transaction volume), investor’s profitability, market liquidity, among other factors awarding a score from 0 to 100. Higher score denotes a robust, bullish environment, while lower readings flag Bearish conditions.
From now on, the Bull Score index sits on a troubled 20-the lowest since January 2023, when Bitcoin sat around $ 16,000 after the collapse of the then Behemoth Crypto Exchange FTX.
Eight of the ten measurements traced by the index show warning signs with network activity been bearish since December 2024 and dried transaction volumes and liquidity.
“Historically, Bitcoin has only maintained larger price rallies when the Bull score is over 60, while long -term readings below 40 are in line with bear markets,” says Cryptoquant analysts in the Thursday report.
The investor’s profitability has subsided as short-term holders are facing unrealized losses, while demand softening-US spot Bitcoin ETFs, when aggressive buyers, have recorded a net of $ 180 million outflows in the last 30 days, or among the highest frequencies of retreats since they started shopping at the beginning of 2024.
In previous cycles, readings under 40 for weeks or months have preceded expanded bear phases, just as the 2022 decline, which saw Bitcoin throw over 60% of its value from the top.
The coming weeks will be crucial. Either the index rebounds, signaling of renewed strength, or anchoring below 40 and cementing a bearish shift that could test Bitcoin’s $ 80,000 support zone – a marked by analysts as a critical level to look for.
