[Analysis] Bitcoin Shows Short-term Correction Signal…"Bullish Momentum Weakening"

An analysis has emerged suggesting that Bitcoin (BTC) may face a short-term correction as its bullish momentum weakens.

On the 7th (local time), on-chain data analysis platform CryptoQuant stated in a report shared with The Block, "After surpassing $123,000 last month and setting an all-time high, Bitcoin is showing signs of a short-term correction or a slight downward risk."

CryptoQuant explained, "The bullish score index of Bitcoin has dropped from 80 to 60," adding, "While overall market conditions remain positive, the momentum appears to have somewhat weakened."

The bullish score index is an indicator that quantifies the buying sentiment and investor psychology in the digital asset market, by combining various on-chain metrics. The closer the index is to 100, the stronger the buying momentum and more optimistic the sentiment; the closer it is to 0, the higher the selling pressure and more dominant the negative outlook. The current level of 60 still corresponds to a 'bullish phase', but it also suggests that upward momentum is slowing.

CryptoQuant forecasted, "If Bitcoin prices show further weakness, the index may fall below 40, signaling entry into a 'bearish phase' for the first time since April 2023."