Bitcoin’s bull index turns positive after leaving bear territory, with a warning in play

Bitcoin is showing signs of improving market health, but a key indicator suggests the recovery remains tentative.

CryptoQuant’s Bitcoin Bull Score Index has risen to 50, returning to neutral territory for the first time since bitcoin’s peak above $126,000. The shift marks a notable transition after a prolonged period in bearish conditions, but similar signals in the past have proven unreliable.

The index tracks ten on-chain metrics—including network activity, liquidity, and investor profitability—to assess overall market strength. A reading of 50 indicates a balanced mix of bullish and bearish signals. Historically, levels below 40 point to a structural bear market, while readings above 60 signal a strong and sustained uptrend.

The move to neutral coincides with bitcoin’s rebound from around $60,000 to the upper-$70,000 range, suggesting underlying conditions are improving beyond price action alone.

However, historical precedent tempers optimism.

In March 2022, the index similarly climbed to 50 following a recovery from roughly $35,000 to $48,000. At the time, many interpreted the signal as confirmation that the bear market had ended after the November 2021 peak.

Instead, the market reversed sharply, with bitcoin falling below $20,000 in the months that followed—demonstrating how transitional signals can mislead.

Julio Moreno, head of research at CryptoQuant, noted that the index only briefly held neutral levels during that period before the broader downtrend resumed.

While the current reading reflects genuine improvement in on-chain fundamentals, derivatives data suggests that market conviction remains weak.

According to QCP Capital, options markets continue to price in caution. Implied volatility remains relatively subdued, skew favors downside protection, and the term structure shows only a mild upward slope.

Taken together, the data points to a market still in transition—potentially stabilizing, but not yet signaling a clear or sustained bullish breakout.

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