Bitcoin Bull Score slides to 20 amid contraction in USDT supply – CryptoQuant

• Fears of a deeper Bitcoin correction mount as several market indicators shift into bearish territory and its Bull Score Index drops to 20.
• Demand for the leading cryptocurrency weakens, with apparent demand shrinking by 284,000 BTC over 30 days, the steepest decline since March 2025.
• Tether's USDT records its biggest market-cap contraction since mid-2022, shedding $6.6 billion over 60 days.

Concerns over a deeper correction in Bitcoin (BTC) have intensified as its market indicators turn bearish simultaneously. The warning signs persist despite historical parallels with earlier market bottoms for the leading cryptocurrency.

What does Bitcoin's lowest Bull Score Index since April 2025 signal?

A sharp weakening in market conditions has pushed CryptoQuant's Bull Score Index down from 90 on 13 October to 20 in less than four weeks, the firm said in a report released on Wednesday.

April 2025 saw the most recent comparable fall, after markets sold off on tariff concerns. The index sank to 20 then as well, but rebounded to 80 within two months as Bitcoin formed a local bottom.

Several forces are driving the latest downturn, the firm cautioned. These include profit-booking after September's rally, a more hawkish outlook for the Federal Reserve (Fed), the Binance hack and the Republicans' midterm defeat.

The report stated: "The April 2025 collapse had a single cause and reversed as soon as the tariff news faded. This one is broader, which argues for a slower repair."

A 284,000 BTC contraction in Bitcoin's apparent demand over 30 days was also the sharpest since 28 March 2025. According to CryptoQuant, comparable declines in March 2025 and June-July 2026 occurred alongside local market bottoms. Apparent demand shrank by 309,000 BTC in March 2025, compared with 273,000 BTC in June 2026.

Weak buying pressure from the US could stand in the way of a recovery, the firm highlighted. The Coinbase Premium Index has stayed below zero over the past 30 days, averaging -0.14%.

CryptoQuant wrote: "In both earlier episodes the premium turned positive before or as demand recovered; US buyers led the bottom. That has not happened yet."

Liquidity in stablecoins is weakening too. Tether's USDT market capitalisation has declined by $6.6 billion over 60 days, which CryptoQuant described as the largest contraction in its available data going back to mid-2022.

Even the $3.2 billion contraction in December 2022 after the FTX collapse was smaller than the latest decline.

The firm noted: "This is the first time in the current cycle that USDT supply, apparent demand and the Bull Score have all been at or near their lows at once."

With rallies in the current cycle depending on stablecoin expansion to provide fresh liquidity, shrinking stablecoin supply could reduce the likelihood of a Bitcoin recovery, CryptoQuant cautioned.

As CryptoQuant noted, “Stablecoin supply is the dry powder of the crypto market; when it shrinks, new demand for Bitcoin has to come from somewhere else,”

Can Bitcoin regain its key 365-day moving average?

The next major support for Bitcoin is now its 200-day moving average at $73,200, after the cryptocurrency slipped beneath the 365-day moving average of $76,400. CryptoQuant regards that breach as a bearish signal. A recovery above the 365-day average would help re-establish Bitcoin's bullish market structure, the firm said.

CryptoQuant wrote: “The 365-day average is itself declining, falling about $40 a day, so reclaiming it gets slightly easier each week the price holds,”

Should Bitcoin continue to slide towards or below the 200-day average, the argument for a deeper correction could become stronger, CryptoQuant warned.

The report added: “The 200-day moving average at $73.2K is the level that separates a shallow correction from a deeper one,”

At the time of writing, Bitcoin trades at $74,400 after gaining 1.3% over the past 24 hours.