Eight of ten Bitcoin bull indicators are bearish, but BTC holds above $116K, hinting at cooling momentum with demand growth still positive.
Bitcoin bull indicators have shifted gears toward bearish territory even as the cryptocurrency made a recovery above $116,000 this week.
According to blockchain analytics firm CryptoQuant, eight of the ten indicators that make up its Bull Score Index are now in the red. This said, only Bitcoin demand growth and another general technical signal remain supportive.
The Bull Score Index draws from ten different on-chain and market-based signals. These include metrics such as the MVRV-Z score, which compares market value to realized value.
Some others include the profit and loss indexes and the bull-bear cycle indicator. Other measures like inter-exchange flow pulse and network activity track how assets move and how active the network remains.
Currently, only demand growth and the technical signal are pointing positive.
Demand growth shows a continued appetite for Bitcoin since July while the technical signal is in line with common chart-based indicators.
The remaining metrics have turned bearish. This set includes trader realized price and stablecoin liquidity, both of which are important gauges for inflows and profitability. When combined, they show that traders are pulling back from aggressive buying.
The last time eight out of ten Bitcoin bull indicators went bearish was in April. At that point, Bitcoin dropped sharply to $75,000.
On the other hand, when eight of ten were bullish in July, Bitcoin reached $122,800, the first peak of the year.
This contrast shows why the current signal change is important. While Bitcoin’s price is holding up better than during previous corrections, the indicators are showing a reduced market energy.
CryptoQuant’s combined Bull Score Index has been hovering between 20 and 30 throughout September which is reinforcing the idea that the cycle is slowing down.
Other indicators beyond CryptoQuant’s model are also showing mixed signals. CoinGlass’s Bitcoin Bull Run Index, which uses nine separate metrics sits at 74.
That could mean that the market is still around three-quarters of the way through the current bull run. However, only one of the 30 peak indicators on CoinGlass has triggered:
This is the altcoin season index.
This is also in line with commentary from analysts who say that altcoins and equities are currently drawing more attention than Bitcoin.
Some analysts are seeing the current cooling as part of the expected September correction, rather than the end of the cycle. Tony Edward, a crypto commentator pointed out that liquidity has recovered and could hit new highs.
He expects the bull cycle to stretch further, with a possible local top in the fourth quarter of the year and a final blowoff top early next year.
Meanwhile, Galaxy Digital CEO Mike Novogratz showed a cautious but optimistic view of the market. He said that Bitcoin is in consolidation, while corporate treasuries shift funds into altcoins like Ethereum and Solana.
Companies like BitMine Immersion Technologies and Forward Industries have made billion-dollar commitments to altcoin holdings, which is adding momentum outside of Bitcoin.
Novogratz indicated that Bitcoin could stage another surge as the Federal Reserve starts its interest rate cutting cycle.
On Friday, BTC reclaimed the $116,000 level after a 1.5% daily gain. That move marked its highest price in three weeks. Despite the bearish readings on Bitcoin bull indicators, the price remains just 6.8% below its all-time high.
Compared to previous market cycles, this correction is far shallower.
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