Bitcoin Market Signals Turn Bearish: Analysis of Recent Trends
Recent market indicators suggest a bearish trend for Bitcoin (BTC), raising concerns of a potential deeper correction. This shift mirrors historical patterns observed during past market bottoms, as highlighted in a recent report by CryptoQuant.
Significant Drop in Bitcoin Bull Score Index
CryptoQuant reported a dramatic fall in its Bitcoin Bull Score Index, which plummeted from 90 on October 13 to a mere 20 in less than four weeks. This decline reflects worsening market conditions, reminiscent of a similar situation in April 2025, which followed a market sell-off linked to tariff news.
Historically, when the index dropped to 20 in April 2025, Bitcoin managed to rebound to 80 within two months as it established a local bottom. However, CryptoQuant cautioned that the current market downturn is influenced by multiple factors, including:
- Profit-taking after a notable rally in September
- A more hawkish stance from the Federal Reserve
- Consequences from the Binance hack
- Midterm election outcomes affecting Republican strategies
The report suggests that while the previous decline had a single causal factor, this one is broader and may therefore require a more extended period for recovery.
Declining Apparent Demand and Stablecoin Liquidity
In addition to the Bull Score Index, Bitcoin’s apparent demand has decreased by 284,000 BTC over the last 30 days, marking the fastest downturn since March 28, 2025. Notably, similar contractions in the past have coincided with the establishment of local market bottoms.
CryptoQuant also reported a deterioration in stablecoin liquidity, with Tether’s (USDT) market cap falling by $6.6 billion over a two-month period—this represents the most significant contraction since mid-2022 and surpasses the $3.2 billion decrease during the aftermath of the FTX collapse in December 2022.
The ongoing decline in stablecoin supply is concerning, as it significantly affects Bitcoin’s recovery potential. “Stablecoin supply is the dry powder of the crypto market; when it shrinks, new demand for Bitcoin has to come from somewhere else,” the firm stated.
Bitcoin’s Position Relative to Moving Averages
Current trading data reveals that Bitcoin has fallen below its critical 365-day moving average of $76,400—a development seen as bearish by CryptoQuant. The next significant support level is at the 200-day moving average of $73,200. The firm noted that reclaiming the 365-day average could restore Bitcoin’s bullish market structure.
Furthermore, CryptoQuant highlighted that a continued decline toward or below the 200-day average might solidify the case for a more substantial correction. “The 200-day moving average at $73.2K is the level that separates a shallow correction from a deeper one,” they stated.
Conclusion
As of now, Bitcoin is trading at $74,400, reflecting a slight increase of 1.3% over the last 24 hours. Nevertheless, the current market indicators suggest caution, as various factors contribute to a potential downturn. Traders and investors are advised to monitor these developments closely as they could impact future price movements.
