Key Takeaways
What drove Bitcoin’s bearish turn?
CryptoQuant’s Bull Score Index plunged from 80 to 20, while Apparent Demand dropped to 111K BTC, marking Bitcoin’s steepest decline since April.
What might spark a recovery?
A breakout above $115K, coupled with $14.9B in new stablecoin inflows and whale accumulation, could restore bullish momentum.
Bitcoin [BTC] extended its recent downturn as escalating U.S.–China trade tensions erased over $21 billion in Open Interest across the Derivatives market, alongside Ethereum [ETH].
The asset struggled to hold above the $110,000 level, with bearish sentiment still dominating the broader market. As uncertainty persists in the short term, AMBCrypto has outlined key factors that could trigger a potential rally.
Why Bitcoin dropped
The recent downturn has driven many investors out of the market, leaving bears in firm control.
CryptoQuant’s Bull Score Index dropped sharply from 80 to 20, at press time, signaling a shift into bearish on-chain conditions.
The steep fall reflected traders’ declining conviction and reinforced the sell-side pressure visible in Spot markets.
Source: CryptoQuant
Similarly, the Apparent Demand metric recorded a 30-day contraction of 111,000 BTC, marking the steepest decline since April.
This contraction, which began on the 8th of October, indicated that the market entered a bearish phase, with Spot demand shrinking notably. This meant that investors were less willing to bid for higher Bitcoin prices.
Even so, other on-chain indicators hinted that recovery might still be possible if investor behavior shifts.
What could trigger a rebound?
According to CryptoQuant’s latest analysis, a rebound could occur once realized profits begin to rise again. If holders return to on-chain profitability, overall market confidence is likely to improve.
This shift would likely happen if Bitcoin breaks above the $115,000 level, the current cost basis that reflects investor profitability.
Source: CryptoQuant
Farzam Ehsani, Co-founder and CEO of VALR, emphasized that broader economic easing could strongly influence any Bitcoin recovery.
“The interplay between easing monetary policy and renewed trade tensions continues to define short-term market dynamics and investor behavior,” he said.
That shift set up optimism for Q4, a historically favorable period for BTC performance. Institutional flows supported this view, with $102.5 million in fresh Bitcoin purchases reported in the past 24 hours.
Stablecoin growth and whales support broader optimism
The broader market outlook suggested that the recent dip to $110,000 could be temporary.
Stablecoin liquidity continued to expand, signaling a potential return of market demand.
Over the past 60 days, USDT Market Cap Change showed a $14.9 billion rise, accompanied by an additional $1 billion minted within a single day, an encouraging signal for near-term buying power.
Source: CryptoQuant
Meanwhile, whales continued accumulating Bitcoin.
In fact, large BTC holders entered a bullish inflection zone, historically preceding price recoveries. This pattern suggested that whales were quietly positioning for another potential upswing.
Overall, while the crash dented short-term fundamentals, liquidity and accumulation trends pointed to a recovery window if demand returns in the weeks ahead.
