8 of 10 Bitcoin bull indicators turn bearish despite jump to $116K
News Summary
Despite Bitcoin registering a slight recovery on Friday to $116,000, its bull market indicators have turned predominantly bearish, according to CryptoQuant. CryptoQuant analyst JA Maartun noted that eight out of ten of the blockchain analytics platform’s Bull Score Index indicators are flashing bearish, indicating that “Momentum is clearly cooling.” Only two indicators, “Bitcoin demand growth” and “Technical signal,” remain bullish. The rest—including MVRV-Z score, profit and loss index, bull bear cycle indicator, inter exchange flow pulse, network activity index, stablecoin liquidity, trader onchain profit margin, and trader realized price—are all in the red. A similar situation was last observed in April when Bitcoin (BTC) tanked to $75,000, while in July, eight out of ten indicators were green when BTC hit its first peak of $122,800 this year. While the CoinGlass Crypto Bitcoin Bull Run Index (CBBI) currently registers 74, indicating the bull market is almost three-quarters through, only one of its 30 bull market peak indicators (the altcoin season index) has flashed up. Augustine Fan, head of insights at SignalPlus, observed that Bitcoin has been lagging significantly behind altcoins, equities, and spot gold, with net buying momentum slowing and low levels of new capital on-ramping into centralized exchanges. Conversely, some analysts attribute this to an anticipated September correction and predict an extended bull market, potentially seeing a local top in Q4 2025 and a blow-off top in Q1 2026.
Background
Bitcoin market phases, whether bullish or bearish, are typically assessed through a suite of on-chain and technical indicators. For instance, the MVRV-Z score measures the ratio of market value to realized value, often used to pinpoint market tops and bottoms. The profit and loss index indicates the percentage of supply in profit, reflecting market sentiment, while exchange flow pulse tracks the movement of funds to and from centralized exchanges. Collectively, these metrics offer investors a deeper understanding of the asset's underlying price dynamics. In the volatile cryptocurrency market, significant price swings and periodic corrections are common. Investors and analysts closely monitor these indicators to discern whether the market is in a healthy expansion phase or is potentially heading for a more significant correction. Bitcoin's price has experienced notable fluctuations in 2025, and after peaking at $122,800, the market is currently trying to interpret whether the ongoing pullback is a normal part of the cycle or a signal of a deeper trend reversal.
In-Depth AI Insights
What deeper market dynamics are revealed by the current divergence between Bitcoin's price jump and its predominantly bearish indicators? - This divergence suggests that the current price increase might be driven more by short-term speculative capital or specific technical trading signals, rather than broad and deep institutional or long-term investor demand. - The bearish signals from on-chain metrics (like MVRV-Z score, trader profit margins) imply that a significant portion of market participants have not yet realized substantial profits or are taking profits, which limits the internal momentum for sustained rallies. - The market could be in a 'false breakout' or 'bull trap' phase, where price appreciation is not robustly supported by fundamentals and on-chain activity, signaling a potential risk of further corrections. How might the argument for an 'extended bull market,' despite short-term bearish signals, influence institutional and retail investor behavior in 2025 under the Trump administration? - The 'extended bull market' narrative might encourage retail investors to 'buy the dip,' increasing market volatility and potentially leading to a longer 'crowding out' effect, diverting funds from other asset classes like equity proxies into crypto, especially amid ample global liquidity. - For institutional investors, this argument could prompt a more cautious 'wait-and-see' approach, awaiting clearer signals, or deploying capital into altcoins or traditional assets with better risk-adjusted returns, as noted by SignalPlus. - Under the Trump administration, while specific crypto policies might be indirect, its 'America First' economic strategies and preference for traditional finance could implicitly steer some investors towards 'equity proxies' when market uncertainty arises. What are the second-order implications of Bitcoin lagging altcoins, stocks, and gold, particularly with investors preferring to stay within 'equity proxies'? - This indicates that market capital is seeking higher risk-adjusted returns or has stronger conviction in traditional markets (especially the U.S. stock market under the Trump administration in 2025), which could lead to sustained capital outflow pressure on Bitcoin in the short term. - Bitcoin's role as the 'bellwether' of the crypto market might be challenged, with funds preferring higher-risk altcoins, reflecting a pursuit of high growth potential but also signaling potential overheating risks in the altcoin market. - The shift towards equity proxies suggests that, in the current macroeconomic environment, traditional stock markets might offer clearer value propositions, more predictable regulatory environments, and potentially higher liquidity, posing a challenge to Bitcoin's long-term institutional adoption.