Bitcoin’s rebound from last week’s lows is being read as a recovery inside a broader downtrend, not as proof that a new bull phase has started, according to data from analytics firm CryptoQuant.
The central signal is the firm’s Bull Score Index, a composite measure that combines on-chain activity, market data and valuation indicators. The index currently stands at 20. CryptoQuant says a reading above 60 would be more consistent with conditions that support a durable bullish trend. At 20, the gauge remains deep in bearish territory, even after Bitcoin recovered from a recent low near $57,700 and moved back toward the $63,000 area.
The rebound has been notable because it pushed Bitcoin back above the widely watched $60,000 level. That price zone has become an important short-term marker for traders after several weeks of pressure across digital assets. But the latest data suggests the move is still missing the stronger demand, volume and trend confirmation usually seen at the start of a sustained rally.
Bitcoin rose roughly 10% from last week’s low, helped by a mix of recovering short-term demand, seasonal trading patterns and an easing of immediate selling pressure. July has often been a stronger month for Bitcoin, including during weaker market years. In 2018, Bitcoin gained about 20% in July, while in 2022 it climbed around 17% during the same month. Those past recoveries, however, did not immediately mark the beginning of lasting bull markets.
That history is shaping how many traders are reading the current bounce. The price action has offered relief after a sharp pullback, but the wider market picture still appears fragile.
Bull score remains weak
CryptoQuant’s Bull Score Index is the clearest warning sign in the latest data. A score of 20 indicates that most underlying conditions remain weak. The firm says the index would need to rise above 60 before the market could be viewed as having stronger conditions for a lasting upward move.
The index draws from several categories, including blockchain activity, market momentum and valuation measures. When those indicators rise together, they can point to broad strengthening in Bitcoin demand. When they remain low, price recoveries may be more vulnerable to reversals.
At the moment, the index is not confirming a major trend change. Bitcoin has bounced from the recent low, but the broader score still reflects a market that has not fully repaired the damage from the latest sell-off.
That matters because price alone can give an incomplete picture. A token can rise sharply after heavy selling as short positions are closed, bargain hunting increases or temporary demand returns. But a longer-lasting recovery usually needs stronger spot market participation, steady capital inflows and improved on-chain conditions.
CryptoQuant’s data suggests those deeper signals are improving from very weak levels, but not enough to confirm a new bullish phase.
Demand has improved but remains cautious
One of the more constructive signs is that total 30-day demand has rebounded from its steepest contraction since 2022. CryptoQuant said the metric, which combines spot market activity and perpetual futures activity, had fallen by about 650,000 BTC in early June before later moving closer to neutral.
That shift suggests selling pressure has eased and some traders have returned after the sharp decline. Speculative futures activity has turned slightly positive, while spot demand is now showing its slowest decline since mid-May.
Still, the recovery in demand appears uneven. Futures markets can move faster than spot markets because they allow traders to use leverage and react quickly to short-term price changes. Spot demand, by contrast, is often watched as a cleaner signal of direct buying. For a stronger market reversal, many analysts prefer to see spot buying lead the move rather than borrowed futures exposure.
The current situation appears mixed. Futures activity has improved, but the spot market has not yet shown a decisive turn higher. That leaves Bitcoin vulnerable if leveraged bets unwind or if traders lose confidence near key resistance levels.
The concern is not that demand is absent. It is that the demand recovery may still be too shallow to support a durable move much higher.
The $60,000 level remains important
Bitcoin’s return above $60,000 has helped calm some short-term concerns, but that level remains an important area to watch. Traders often treat large round numbers as psychological markers, and $60,000 has become one of the most visible levels in the current market.
A sustained move above that zone could help stabilize sentiment. But a failure to hold it would raise the risk of another test of the recent low near $57,700. If that level breaks, the market could face a faster decline as stop-loss orders and leveraged positions are triggered.
The price area between $57,000 and $60,000 is therefore central to the near-term outlook. Holding it would support the argument that the market has formed a local bottom. Losing it would strengthen the view that the recent bounce was only a relief rally.
The current rebound also appears to lack the broad trading force that usually supports a major trend change. That does not mean Bitcoin must fall again, but it does mean the rally may need more confirmation before traders treat it as the start of a new upward cycle.
Etf outflows add caution
U.S. spot Bitcoin ETFs also remain an important part of the market picture. Funds tied to Bitcoin recorded net outflows of $84.9 million on July 8, wiping out the smaller inflows seen during the previous two trading days.
ETF flows have become a major signal for Bitcoin because they reflect demand from regulated U.S. market products. Strong inflows can absorb supply and support price gains. Outflows can add pressure, especially when they appear during periods of weak momentum.
The July 8 outflow does not by itself decide the market’s direction. Daily ETF flows can be volatile. But the reversal matters because Bitcoin’s latest recovery still needs consistent support from spot-linked demand. If ETF outflows continue, the rebound could struggle to build momentum.
For traders, the key issue is whether fund flows stabilize over several days, not just one session. A single negative day can be noise. A string of outflows would be more concerning, particularly if Bitcoin also fails to hold above $60,000.
The recent data suggests caution is still warranted. The ETF market is not showing the kind of steady demand that would clearly confirm a stronger bullish shift.
U.S. market pressure has eased
U.S. market participation has also improved from earlier June levels. CryptoQuant’s U.S. spot premium measure, which tracks the difference between U.S. and global prices, has recovered from deeply negative readings to about minus 0.062 as Bitcoin climbed from its lows.
A negative reading can indicate weaker U.S. demand or stronger selling pressure in the U.S. market compared with global venues. The improvement suggests that selling pressure has eased and that demand from U.S.-based trading activity has become less negative.
That is a helpful sign, but it is not yet a strong bullish confirmation. The index remains below zero, meaning U.S. pricing has not moved into a clear premium. A move into positive territory would provide stronger evidence that U.S. demand is leading rather than simply stabilizing.
The change still matters because earlier weakness in U.S. trading had contributed to the market’s decline. If that pressure continues to fade, Bitcoin may have a better chance of holding its recent gains. But if the measure turns sharply negative again, it could warn that sellers are regaining control.
Valuation signals show room for recovery
Valuation data offers one of the more supportive parts of the current setup. CryptoQuant reported that traders’ unrealized profit margin fell below minus 24% in early June. The firm said a level near minus 12% has typically marked undervaluation in its framework.
A deeply negative unrealized profit margin means many market participants are holding positions at a loss. Historically, such conditions have often appeared near local bottoms because selling pressure can become exhausted after a sharp decline. When too many traders are underwater, the market may become more sensitive to any improvement in demand.
The metric has started to recover alongside Bitcoin’s price. That suggests the market has moved away from its most stressed condition, at least in the short term.
However, valuation alone is not enough to confirm a new bull phase. Markets can remain undervalued for some time during broader downturns. A strong recovery usually needs valuation improvement to be matched by rising demand, stronger momentum and healthier market structure.
At present, the valuation data says Bitcoin had room to bounce. It does not yet say the downturn is over.
Seasonal strength may be helping the bounce
July’s historical strength is also playing a role in the current narrative. Bitcoin has often performed better in July than in some other months, including during periods that were otherwise weak.
In 2018 and 2022, July rallies were strong even though both years were associated with broader bear-market conditions. That pattern supports the idea that Bitcoin can post meaningful rebounds without immediately entering a new bull phase.
Seasonal patterns can influence trader behavior. If market participants expect July to be stronger, short-term buying can increase. But seasonal strength is usually not enough by itself to sustain a long-term trend. It needs to be supported by capital inflows, stronger spot participation and improved market confidence.
That is why the current rebound is being viewed carefully. The calendar may be helping the move, but the underlying data still looks incomplete.
Risk control remains central
The current market setup leaves traders facing a difficult balance. Bitcoin has recovered enough to show that demand has not disappeared, but the data does not yet confirm a durable shift toward a stronger trend.
In fast-moving markets, risk controls become especially important. The area below $60,000 is likely to remain closely watched because a break back under that level could trigger another round of selling. Traders using leverage may be especially exposed if prices move quickly.
Fresh buying at current levels carries more risk while the Bull Score Index remains far below 60. Some traders may prefer to wait for clearer confirmation from demand, ETF flows and market momentum before increasing exposure. Others may focus on shorter time frames while the market remains unsettled.
What appears clear from the data is that Bitcoin has not yet escaped the conditions that caused the recent drop. The rebound has repaired part of the price damage, but not enough of the underlying structure.
The broader picture is still fragile
Bitcoin’s move back toward $63,000 has improved sentiment after the fall to about $57,700, but the broader market picture remains weak. Demand has recovered from very poor levels, U.S. selling pressure has eased, and valuation measures suggest Bitcoin had become oversold. Those are all supportive signs.
But the Bull Score Index is still at 20, ETF flows have turned negative again, and spot demand has not yet shown a decisive recovery. Futures activity has improved, but a market led mainly by leveraged positioning can reverse quickly if price momentum fades.
For now, the evidence points to a bear-market recovery rather than a confirmed trend reversal. Bitcoin has bounced, but the market still needs stronger proof before the move can be treated as the start of a new bullish phase.
The next major test is whether Bitcoin can defend the $60,000 area and build demand above it. If it can, the recovery may extend. If it cannot, the recent low near $57,700 could come back into focus quickly.
Still unsure if this rebound is a true trend shift? Learn how to read cycles in our bull run vs bear run guide.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
