Bitcoin sentiment falls to 2023 low, but ‘risk on’ environment may emerge to spark BTC price rally

Bitcoin (BTC) sits in one in every of its least bullish phases since January 2023. Based on Bitcoin’s “bull rating index,” investor sentiment is displaying its lowest studying in two years. 

CryptoQuant’s “Crypto Weekly Report” e-newsletter defined that “bull rating index” readings that sit beneath 40 for prolonged intervals improve the chance of a bear market. The bull rating remained above 40 all through 2024, solely dipping beneath this threshold in February 2025, as recognized within the chart above. 

Nonetheless, over the previous 24 hours, Bitcoin worth has displayed resilience when put next in opposition to the large losses seen within the US inventory market. On April 3, Bitcoin closed the day with a inexperienced candle, whereas the S&P 500 was down 4.5%, a historic first.

The S&P 500 and Dow Jones prolonged their decline on April 4, dropping 3.87% and three.44%, respectively, whereas Bitcoin held regular close to the breakeven level.

Associated: Arthur Hayes loves tariffs as printed cash ache is nice for Bitcoin

Is Bitcoin close to a risk-on section?

Knowledge from CryptoQuant signifies that Bitcoin’s Worth Days Destroyed (VDD) metric at present sits round 0.72, suggesting that Bitcoin worth is in a transitional section. Since 2023, such intervals have preceded both worth consolidation or renewed accumulation earlier than a bullish breakout.

The Bitcoin VDD metric tracks the motion of long-term held cash, and it has signaled a notable market development since late 2024. The metric peaked at 2.27 on Dec. 12, signaling aggressive profit-taking and this dynamic matched the highs seen in 2021 and 2017. Nonetheless, VDD dropped to 0.65 in April, reflecting a cooling-off interval the place profit-taking has subsided. 

This opens the potential of a “risk-on” marketplace for Bitcoin. In monetary phrases, a “risk-on” situation happens when traders embrace higher-risk belongings like cryptocurrencies, typically pushed by optimism and imply reversions in traits.

Amid ongoing market uncertainty that has been fueled by the US-led commerce battle, Bitcoin might unexpectedly acquire from these tense circumstances.

Talking on Bitcoin and the crypto market’s potential as a hedge in opposition to conventional market volatility, crypto dealer Jackis mentioned, 

“A reminder, this isn’t a crypto-driven drop however an general risk-on, tariff, commerce war-driven drop. Whereas all of that’s unfolding, plainly crypto has possible undergone most of its draw back already and has been these days absorbing all the promoting nicely.”

Equally, the Crypto Concern & Greed Index additionally exhibited a “worry” class with a rating of 28 on April 4. The index registered an “excessive worry” rating of 25 on April 3, suggesting that the present worth might current a compelling shopping for alternative.

Associated: 10-year Treasury yield falls to 4% as DXY softens — Is it time to purchase the Bitcoin worth dip?

This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer entails threat, and readers ought to conduct their very own analysis when making a choice.