Bitcoin’s investor sentiment has fallen to its weakest point since early 2023, but market analysts say the decline could indicate the onset of an upward trend.
Bitcoin sentiment will fall to the first drop in two years, but a “risk-on” rally may have begun
According to Cryptoquant’s latest Weekly Crypto Report, Bitcoin’s bull rating index fell below 40 for the first time since 2024. This is a metric that generally matches the situation in the Bear market.
This long period below this threshold has historically been a precursor to a long-term decline, but it also created a fertile foundation for countertrend gatherings.
Despite the pessimistic weather, Bitcoin has shown remarkable resilience amid a sharp sale in traditional financial markets.
On April 3, the S&P 500 fell 4.5%, the worst day’s decline since the pandemic. Bitcoin went against this trend and continued to see the green that day.
Both the S&P 500 and the Dow Jones fell further (down 3.87% and 3.44% respectively), and the divergence continued on April 4 as BTC remained stable near Breakeven.
This relative strength encourages speculation that a “risk-on” environment may be taking shape, with investors turning to high-risk assets like cryptocurrencies.
Cryptoquant’s Value Day (VDD) metrics currently track the long coin movements falling from its peak at 2.27 in December, indicating that it is profitable.
Historically, Cooling VDDs have argued for integration and ultimate accumulation, often setting the stage for breakouts.
“It appears that Bitcoin is in the transition phase,” the report said. “We see little sales pressure from long-term holders, which could support price stability and even upward momentum.”
The Crypto Fear & Greed Index reflects a decline in emotions, scoring 28 points (“fear”) on April 4 after being classified as “extreme fear” territory (25) the day before.
*This is not investment advice.
