The crypto bull market seems to show clear signs of recession since Trump took office on January 20th, dropping from a high of $109,588 to a low of $76,606, a decline of 30%. Currently, the Bit price has rebounded to $83,700.
Although Bit remains above $80,000 from recent lows, the market sentiment and price trend this year make it difficult not to wonder - is the bull market still ongoing?
Bull Market Index Reaches Lowest Point Since January 2023
In this context, on-chain data analysis platform CryptoQuant released a report stating that CryptoQuant's Bit "Bull Score Index" has dropped to 20, the lowest since January 2023, indicating weak market conditions. This deepens market concerns that the current price drop may be part of a broader bearish trend rather than a short-term correction.
The Bull Score Index measures the proportion of bullish signals among "ten key indicators" covering network activity, investor profitability, Bit demand, and market liquidity. The index ranges from 0 to 100, with higher values indicating a stronger investment environment and lower values suggesting a bearish market.
These indicators include: MVRV Z-score, CryptoQuant Profit and Loss Index, CryptoQuant Bull and Bear Cycle Indicator, Exchange Flow Impulse Indicator, CryptoQuant Network Activity Index, Stablecoin Liquidity, Bit Demand Growth, Trader On-chain Profit Rate, Trader Realized Price, and Technical Signals.
In yesterday's signals, only "Stablecoin Liquidity" and "Technical Signals" showed a bullish trend.
CryptoQuant also added that historically, Bit has only shown sustained price increases when the Bull Score Index is above 60, while periods when the index remains below 40 typically align with bearish markets.
If the Bull Score Index remains below 40 for an extended period, it may signal the continuation of bearish market conditions, similar to previous bear market phases.
Will Bit Fall Below $20,000?
We can see that in January 2023, the Bull Score Index was at a low of 20, when Bit's price was below $20,000, essentially the low point of the previous bear market, with some community voices suggesting a potential retest of that level.
However, just because the current "Bull Score Index" has dropped to 20 doesn't necessarily mean Bit will fall below $20,000.
On August 7th last year, the Bull Score Index also touched 30 due to global economic turmoil affecting the crypto market. Bit briefly dropped to $49,000 before quickly rebounding and stabilizing between $56,000 and $64,000.
Therefore, the current index only reflects market sentiment and capital flow, not Bit's absolute future price, so investors need not be overly anxious.
Arthur Hayes: Bit May Have Bottomed at $77,000
On the other hand, according to a previous BlockTempo report, BitMEX founder Arthur Hayes offered a different perspective yesterday, suggesting that Bit may have bottomed at $77,000, but the stock market might still have room to fall to pressure the Fed into implementing more lenient policies:
Powell has fulfilled his promise, with QT essentially ending on April 1st. Moving forward, to truly drive the market into a bull market, either the SLR exemption policy needs to be restored or QE restarted.
Has Bit bottomed at $77,000? Possibly, but the stock market may still experience more pain to completely sway Powell towards Trump's camp, so stay flexible and keep enough cash on hand.
