Bull Score Index Hits Zero Confirming Extreme Structural Market Risk ∞ Insights

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Briefing

The CryptoQuant Bull Score Index, a key measure of overall market health, has fallen to zero for the first time in over three years. This collapse suggests the market has entered an extremely high-risk, structural bearish phase, a condition historically seen just before prolonged drawdowns. This thesis is proven by the fact that the Bull Score Index reached zero, a level last observed before the previous bear market.

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Context

After a significant price correction, the average person is wondering if the market is simply experiencing a healthy shakeout or if a more severe, structural downturn has begun. Is the current price drop a temporary setback, or is the foundation of the bull market truly broken, signaling an extended period of decline?

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Analysis

The Bull Score Index measures the overall health and sentiment of the Bitcoin market by combining multiple on-chain and market indicators. When this index drops to zero, it signals an extremely bearish phase where structural support is broken and risk is maximized. The recent drop to zero, a level not seen in over three years, indicates a fundamental shift in market structure and sentiment, mirroring conditions that preceded the last bear market. This structural risk is confirmed by the breach of the 365-day moving average.

However, the Market Value to Realized Value (MVRV) ratio, which compares the market price to the average investor’s cost, currently sits at 1.8 to 2.0, a zone historically associated with mid-term bottoms. This MVRV reading suggests that while the market structure is weak, it is simultaneously entering a valuation zone where price tends to find support.

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Parameters

Bull Score Index Reading ∞ Zero (First time in over three years, signaling extreme risk).
MVRV Ratio Range ∞ 1.8 to 2.0 (Historical zone for mid-term market bottoms).
Critical Price Support ∞ $102,000 (The breached 365-day moving average).

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Outlook

The immediate outlook is high-risk, with a structural bearish phase confirmed by the Bull Score collapse. This suggests a prolonged consolidation or further downside is likely. However, the MVRV ratio suggests the market may be nearing a significant mid-term bottom, meaning the structural weakness is meeting a zone of potential value.

A confirming signal to watch is if the MVRV ratio falls decisively below 1.8, which would indicate a full capitulation and a deeper bear market. Reclaiming the $102,000 price level would be a powerful counter-signal.

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Verdict

The market has entered a structurally high-risk phase, but key valuation metrics suggest a potential bottom is near.

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