Bitcoin market sentiment has deteriorated to levels not seen since January 2023, according to crypto analytics firm CryptoQuant.

In a report released Thursday, CryptoQuant revealed its Bull Score Index has fallen to 20 — showing only two out of ten key metrics in bullish territory.

This reading marks the lowest level in over two years and sits well below the threshold historically needed to support sustained price appreciation, the analytics firm said.

Because it returns to a previous low, a “weak environment” for Bitcoin reduces “the likelihood of a sustained rally in the near term,” the report reads.

Those insights raise questions about market direction, one that CryptoQuant sees “could be part of a broader bearish trend, rather than a short-term correction.”

The analytic firm’s Bull Score Index combines ten distinct metrics measuring network activity, investor behavior, Bitcoin demand, and market liquidity to gauge overall market health.

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

CryptoQuant’s dashboard for the model shows a significant deterioration in on-chain fundamentals since mid-February 2025, with eight metrics now flashing warning signals. 

The Network Activity Index, a key component tracking on-chain usage, has remained bearish since December 2024.

If the score “remains below 40 for an extended period,” this could signal that “bearish market conditions” could continue, challenging the notion that Bitcoin’s recent drawdown by up to 23% of its recent peak of $109,000 in January represents a “temporary correction,” analysts noted in the report.

Broader contexts are also at play here. Bitcoin volatility has jumped to a six-month high, even while some observers project new all-time highs by mid-year, driven by easing global liquidity conditions.

On Wednesday, the Federal Reserve said it would hold interest rates steady. Major crypto markets, from Bitcoin to Ethereum and Solan, saw immediate, modest gains on the news.

At the time of writing, Bitcoin is down 1.8% to $84,400. Over on MYRIAD, an on-chain prediction market launched by Decrypt’s parent company DASTAN, 68% think that Bitcoin will stay above $83,000 before next week.

Edited by Sebastian Sinclair