Bitcoin sentiment hits two-year low at $84,000

Bitcoin's (CRYPTO:BTC) market sentiment has reached a two-year low, with CryptoQuant's Bull Score Index dropping to 20, indicating a weak environment for the cryptocurrency.

This decline comes as Bitcoin has fallen by 23% from its recent peak, sparking concerns about a potential prolonged downturn in the market.

The Bull Score Index, which combines ten key metrics including network activity, investor behavior, and market liquidity, suggests that only two out of ten indicators are currently in bullish territory.

Historically, Bitcoin has required scores above 60 to sustain significant price rallies, while extended periods below 40 have consistently aligned with bear markets.

CryptoQuant's analysis highlights a significant deterioration in on-chain fundamentals since mid-February 2025, with eight metrics now flashing warning signals.

The Network Activity Index, a crucial component of the Bull Score, has remained bearish since December 2024, reflecting a sustained decline in on-chain usage.

Ki Young Ju, CEO of CryptoQuant, has also warned that Bitcoin's bull cycle is over, predicting 6 to 12 months of bearish or sideways price action due to diminishing liquidity and increased selling pressure from new whales.

This sentiment is echoed by other analysts, who note that Bitcoin's price momentum has weakened, with key valuation metrics like the MVRV Ratio Z-score indicating potential for further corrections.

The broader market context also plays a role, with Bitcoin traders increasingly hedging against volatility by purchasing protective options contracts.

This defensive positioning reflects growing caution as broader financial markets face uncertainty ahead of key U.S. economic data.

Despite these bearish signals, some observers remain optimistic about Bitcoin's potential for new all-time highs by mid-year, driven by easing global liquidity conditions.

However, if the Bull Score Index remains below 40 for an extended period, it could signal ongoing bearish market conditions, challenging the notion that Bitcoin's recent drawdown is merely a temporary correction.

At the time of reporting, the Bitcoin (BTC) price was $84,562.80.