Bitcoin Sentiment Drops to Lowest Level in Two Years as Fear Index Continues to Plummet! What Does It Mean? Here are the Details

Bitcoin investors’ sentiment has declined to its weakest point since the beginning of 2023, but market analysts say this drop could signal the beginning of a rise.

Bitcoin Sentiment Falls to Lowest Level in Two Years, But a ‘Risk-On’ Rally May Be Starting

According to CryptoQuant’s latest “Weekly Crypto Report,” Bitcoin’s bull score index has fallen below 40 for the first time since 2024. This is generally a sign consistent with bear market conditions.

Although long periods below this threshold have historically been a precursor to prolonged get dumped, they have also created a fertile ground for counter-trend rallies.

Despite the gloomy weather, Bitcoin showed surprising resistance amid sharp sell-offs in traditional financial markets.

On April 3rd, the S&P 500 recorded its worst single-day drop since the pandemic, falling by 4.5%. Bitcoin defied the trend and continued its day in the green.

Both the S&P 500 and Dow Jones dropped further, with declines of 3.87% and 3.44% respectively, while BTC remained stable near the breakeven point, leading to a continuation of the deviation on April 4.

This relative strength feeds speculation that a “risk-on” environment may be taking shape, with investors turning to riskier assets like cryptocurrencies.

The Value Days Destroyed (VDD) metric, which tracks the movement of long-held coins by CryptoQuant, is currently at a level of 0.72, indicating a significant profit-taking after dropping from its peak of 2.27 in December.

Historically, a cooling VDD has been a precursor to consolidation and final accumulation, and has often laid the groundwork for a breakout.

The report stated, “Bitcoin seems to be entering a transition phase.” It added, “We are seeing less selling pressure from long-term holders, which could support price stability and even upward momentum.”

The Crypto Fear and Greed Index registered a score of 28 in the “Fear” zone on April 4, reflecting a decline in sentiment after falling into the “Extreme Fear” zone the previous day.