Insights from on-chain analytical provider CryptoQuant highlight a 2-year Bitcoin Bull Score low, raising concerns over the cycle’s continuity.
After a meteoric surge to $87,482 yesterday amid bullish macroeconomic factors, Bitcoin has tilted downwards again. The premier crypto asset surged 6% between Wednesday and early Thursday but has corrected 4% from the price high as the market cools from the FOMC meeting enthusiasm.
Meanwhile, at the current market price, Bitcoin is 23% away from its January 20 all-time high of $109,312 and has shown intense price weakness recently. A Thursday commentary from CryptoQuant elaborates on what this means for the largest cryptocurrency by market cap and the crypto bull market.
Is the Bull Market Over?
The market analytical provider highlighted that while corrections of this nature occur during bull cycles, this season’s steep decline comes with other bearish indicators. Notably, the firm had earlier fronted this claim, citing the Bull-Bear Market Cycle (BBMC) indicator and the Market Value to Realized Value (MVRV) ratio.
This time, CryptoQuant analyzed the Bitcoin market using the Bull Score Index, a metric that tracks the potency of a cycle using scores ranging from 0 to 100. The parameter combines ten key market indicators, including network activity, investor profitability, liquidity, and demand, with higher scores signaling a bullish market environment.
Notably, Bitcoin’s currency Bull Score Index stands at 20, the lowest since January 2023. Such an underwhelming score indicates weak market conditions, suggesting the recent downside might actually be a bearish trend rather than a near-term correction.
Bitcoin Below Bullish Threshold
The analysis highlighted that historically, the average score for a strong bullish market continuation is 60. An accompanying chart showing Bitcoin’s price action in relationship with the index indicates that the pioneering cryptocurrency only has sustained price uptrends when the score is above 60.
Moreover, a prolonged trend below 40 has usually marked the emergence of a bear market. For perspective, Bitcoin’s Bull Score Index wallowed below the threshold for most of 2022 and early 2023, correlating to the bearish trends.
Hence, analysts at CryptoQuant inferred that if Bitcoin continues its recent trend for an extended period, the asset could enter full bearish territory as seen in previous cycles. Interestingly, the firm’s CEO, Ki Young Ju, had earlier claimed that the crypto bull cycle was over.
Bulls Makes Case for Cycle’s Nascency
Nonetheless, bulls have remained unmoved despite recent price weakness. In fact, prominent market analyst Sam Price insisted that Bitcoin is closer to its bottom than its cyclical price peak.
The analyst cited five key indications to back his claims: the Bitcoin Pi Cycle, macro price swings, hidden bullish divergence, RSI, and the Fear and Greed Index.
Moreover, Ali Martinez’s analysis also indicates that there are still hopes of a bull cycle continuity. However, Bitcoin must quickly swing from bearish territory to reclaim $93,700.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
