Bitcoin has fallen 23% from its recent peak, sparking concerns about a potential bear market. CryptoQuant has introduced a new Bullish Score Index to assess whether this is a temporary correction or the start of a deeper decline.
Bitcoin's Decline and Potential Implications
Bitcoin has experienced a sharp decline of 23% from its recent peak. This drop raises concerns about the market entering a prolonged bearish phase.
CryptoQuant's Bullish Score Index
CryptoQuant has introduced the Bullish Score Index, evaluating ten key indicators of network activity, investor profitability, Bitcoin demand, and market liquidity. Currently, the index stands at 20, the lowest level since January 2023.
Current Market Condition Analysis
Historically, Bitcoin has only sustained major price rallies when the Bullish Score Index was above 60, while prolonged readings below 40 have equated to bear markets. Given that the index remains well below this threshold, CryptoQuant analysts warn of weak market conditions and potential further downside.
If the Bullish Score Index remains below 40 for an extended period, it could confirm the continuation of bearish conditions similar to previous downtrends. Analysts note that in the current weak market environment, a rapid recovery is difficult unless fundamental metrics improve.
