Bitcoin's market sentiment has plummeted to its lowest level since January 2023, according to CryptoQuant, which reported a decline in its Bull Score Index to 20, indicating a weak bullish environment. This decrease suggests a low likelihood of a sustained price rally, with Bitcoin already experiencing a 23% drop from its February peak above $102,000. The tightening market liquidity reflects a slowdown in capital inflows, with exchange activities down over 54% from peak levels. As traders become increasingly cautious, demand for protective options, particularly put options, has risen. The report indicates that extended periods below a score of 40 in the Index relate to bear markets, complicating the narrative of a temporary correction. Market volatility is rising, influenced by broader economic uncertainties, including Federal Reserve policies. Currently, Bitcoin's price hovers around $84,400, with significant bearish signals noted across various metrics, prompting questions about the future direction of the market.

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