Short -term price drops are even for the course in the Bitcoin (BTC) markets, but an indicator suggests that the current decrease in recent maximums may reflect a deeper structural change in market dynamics.
Bitcoin traded around $ 84,000 as European morning hours on Friday, a 23% drop since its January peak, $ 109,000. The fall has shaken the investors and fed the debate on whether this marks the beginning of a new bearish market or a fleeting correction within a broader upward trend.
Such setbacks are not uncommon: BTC has resisted similar decreases in past bull cycles, often bouncing at new heights. However, the chain analysis firm in the Cryptoquant’s Bull Score Index chain, a compound metric designed to measure Bitcoin market health, shows signs of deeper weakness.
The index evaluates ten critical indicators: the activity of the expansion network (such as the volume of transactions), the profitability of the investor, the liquidity of the market, among other factors, assigning a score from 0 to 100. The highest scores denote a robust and bullish environment, while the lowest readings indicate low conditions.
From now on, the Toro score index is in a worrying 20, the lowest since January 2023, when Bitcoin sat around $ 16,000 after the collapse of the then FTX exchange crypt.
Eight of the ten metrics traced by the index show warning signals, with network activity since December 2024 and the transaction volumes and liquidity were dried.
“Historically, Bitcoin has only suffered great prices demonstrations when the bull score is greater than 60, while prolonged readings below 40 have aligned with bears markets,” cryptocant analysts said in Thursday’s report.
The profitability of investors has decreased since the short -term holders face unrealized losses, while the demand is softened: the ETF of the US Bitcoin Spot. UU., Once aggressive buyers have registered a net exit of $ 180 million in the last 30 days, or among the highest withdrawals since they began negotiating in the early 2024.
In previous cycles, the readings below 40 for weeks or months have preceded the extended phases of the bears, such as the 2022 drop that saw Bitcoin detached more than 60% of its value of the peak.
The next weeks will be fundamental. The index is bouncing, pointing out the renewed force, or strengthening below 40, cementing a bearish change that could prove the support zone of $ 80,000 of Bitcoin, a marked by analysts as a critical level to observe.
