CryptoQuant: Bear Market May Have Begun, Mid-Term Support Level Expected at $70,000

PANews reported on December 20th that on-chain analytics firm CryptoQuant published an article stating that Bitcoin demand growth has slowed significantly, foreshadowing an impending bear market. Since 2023, Bitcoin has experienced three major waves of spot demand—driven by the launch of US spot ETFs, the US presidential election results, and the Bitcoin Treasury bubble—but since early October 2025, demand growth has fallen below trend levels. This indicates that most of the new demand in this cycle has been realized, and a key pillar supporting the price has disappeared.

Institutional and large holder demand is currently contracting rather than expanding: US spot Bitcoin ETFs turned net sellers in Q4 2025, with holdings decreasing by 24,000 Bitcoins, a stark contrast to the strong buying in Q4 2024. Similarly, the growth in addresses holding 100 to 1,000 Bitcoins (representing ETFs and Treasury companies) is also below trend, echoing the deteriorating demand trend that emerged at the end of 2021 ahead of the 2022 bear market.

The derivatives market confirms weakening risk appetite: funding rates for perpetual futures (365-day moving average) have fallen to their lowest level since December 2023. Historically, this decline reflects a reduced willingness to maintain long positions, a pattern typically seen in bear markets rather than bull markets.

The price structure is deteriorating as demand weakens: Bitcoin has fallen below its 365-day moving average, a key long-term technical support level that has historically been a dividing line between bull and bear markets.

Bitcoin's four-year cycle is driven by demand cycles, not halvings: the current downturn further demonstrates that Bitcoin's cyclical behavior is primarily governed by the expansion and contraction of demand growth, rather than the halving event itself or past price performance. When demand growth peaks and begins to decline, a bear market often follows, regardless of supply-side dynamics.

Downside reference points suggest a relatively small bear market: historically, Bitcoin bear market bottoms have largely coincided with realized prices, currently near $56,000, implying a potential 55% pullback from recent all-time highs—the smallest retracement on record. Mid-term support is expected around $70,000.