Bitcoin On-Chain Signals Flip Bullish Amid Short Squeeze Frenzy

Key on-chain signals for Bitcoin (BTC) have flipped bullish, but analysts warn that huge unrealized losses could cap any potential gains. According to CryptoQuant contributor Darkfost, the Bull Score Index has crossed the 60 threshold, indicating a shift in market conditions.

The Bull Score Index tracks 10 indicators and has turned six of them green, including demand growth and stablecoin liquidity. During previous bull phases, this index remained above 60 for most of the cycle before falling back into bearish territory.

CryptoQuant contributor Crypto Dan pointed to Bitcoin's MVRV indicator, which compares its market value with its realized value. The sharp vertical rise in the MVRV is a signal that has historically appeared as previous downcycles came to an end.

A short squeeze on Binance futures was largely responsible for Bitcoin's 27% rebound from around $63,000 to $77,000, according to CryptoQuant contributor Boris. However, this rapid advance could leave the market overheated and vulnerable to a pullback as traders take profits.