CryptoQuant Sees Signs of Bitcoin Entering Bear Market as Demand Weakens

• Bitcoin demand fell below its long-term trend in early October, a historical bear market indicator per CryptoQuant data.

• U.S. spot Bitcoin ETFs turned net sellers in Q4 2025, reducing holdings by 24,000 BTC or $2.12 billion.

• Addresses holding 100-1,000 BTC showed sub-trend growth, mirroring pre-2022 bear market patterns, with Bitcoin crossing below its 365-day moving average.

Bitcoin bear market confirmed by CryptoQuant: Demand slowdown and ETF outflows signal price declines. Explore key indicators and potential supports in this analysis for informed crypto strategies.

What Is the Current Bitcoin Bear Market Signaling?

Bitcoin bear market conditions have emerged as demand growth slowed significantly below long-term trends starting in early October 2025, according to a CryptoQuant report. This downturn follows three major demand waves since 2023, fueled by U.S. spot ETF launches, political events, and corporate treasury adoption. The analytics firm notes that such shifts historically precede extended price corrections, with Bitcoin now trading below key technical thresholds.

How Have Bitcoin ETF Holdings Contributed to the Bear Market?

U.S.-based spot Bitcoin exchange-traded funds (ETFs) played a pivotal role in the Bitcoin bear market by shifting from accumulation to distribution in the fourth quarter of 2025. CryptoQuant data indicates that combined ETF holdings declined by approximately 24,000 BTC, equivalent to about $2.12 billion at prevailing prices. This marks a stark reversal from the fourth quarter of 2024, when inflows surged and supported robust price appreciation. The report highlights that this cohort, including ETFs and corporate treasuries, drove much of the cycle’s demand, and their weakening growth echoes patterns observed at the end of 2021, which led into the 2022 bear market. Short sentences underscore the data: ETF net selling accelerated in recent months. Large investors accumulated more cautiously. Derivatives indicators also trended downward. Expert analysis from CryptoQuant emphasizes that restored demand is essential for any bullish reversal, a view supported by on-chain metrics showing reduced network activity. Furthermore, the firm’s proprietary indicators, such as spot demand waves, provide historical context—similar slowdowns in prior cycles resulted in 50-70% price drawdowns from peaks.

The broader implications extend to investor behavior. Institutional participants, who once propelled Bitcoin above $126,000 in early October 2025, now exhibit hesitation. CryptoQuant’s report details how addresses holding between 100 and 1,000 BTC—often linked to ETFs and treasury accounts—grew below trend lines. This group accounted for the majority of demand expansion throughout the cycle. As these holders reduced exposure, Bitcoin’s realized price began aligning with bearish historical averages. Realized price, which calculates the value of coins at their last movement, serves as a reliable gauge for market sentiment. In past downturns, it has pinpointed cycle lows effectively.

Technical indicators reinforce the bearish outlook. Bitcoin recently crossed below its 365-day moving average, a threshold CryptoQuant describes as separating bull and bear phases. This crossover, combined with declining derivatives open interest, suggests reduced leverage and speculative fervor. The analytics firm draws parallels to previous cycles where demand peaks preceded multi-month consolidations. For instance, post-2021 demand exhaustion led to a prolonged winter, with prices bottoming near realized price levels.

Market data further illustrates the shift. Bitcoin’s price has fallen 30% from its all-time high of over $126,000, stabilizing around $88,000 as of late 2025. This decline coincides with a record $19 billion liquidation event in October, wiping out leveraged positions and eroding confidence. On-chain analytics from CryptoQuant reveal that while retail interest waned, institutional flows turned negative. The report cautions that without renewed demand drivers—such as regulatory clarity or macroeconomic tailwinds—the Bitcoin bear market could deepen.

Looking at historical precedents, CryptoQuant’s analysis incorporates data from multiple cycles. The 2018 bear market followed a similar demand slowdown, resulting in an 84% drop. More recently, the 2022 correction saw Bitcoin halve from its peak after ETF hype faded. These patterns inform the firm’s projections: intermediate support at $70,000, with a potential cycle low of $56,000—a 55% decline from the high and 36% from current levels. Such estimates are derived from realized price models and cohort behavior, underscoring the data-driven nature of the assessment.

Despite the gloom, CryptoQuant notes that bear markets often present accumulation opportunities for long-term holders. The firm’s methodology relies on transparent on-chain data, including transaction volumes and holder distributions, to avoid speculative biases. This approach aligns with broader industry standards for crypto analytics, as echoed by experts like those at Glassnode and Chainalysis, who have observed parallel trends in network health.

Frequently Asked Questions

What Caused the Recent Bitcoin Demand Slowdown?

The Bitcoin demand slowdown stems from U.S. spot ETF net selling, reduced accumulation by large holders (100-1,000 BTC addresses), and declining derivatives activity, as detailed in CryptoQuant’s Friday report. This marks a departure from three prior demand waves since 2023, with growth now below long-term trends—a classic bear market precursor seen in 2021.

Is the Bitcoin Bear Market Likely to Last into 2026?

Yes, the Bitcoin bear market shows signs of persistence into 2026 based on historical patterns and current indicators like sub-trend demand and ETF outflows, according to CryptoQuant. While intermediate support at $70,000 may provide temporary relief, a deeper correction to $56,000 aligns with past cycle lows, though external factors could accelerate recovery.

Key Takeaways

• Demand Shift Signals Bear Market: Bitcoin’s spot demand fell below trends in October 2025, ending the cycle’s growth phase and historically leading to price corrections of 50% or more.
• ETF Outflows as Key Driver: U.S. ETFs reduced holdings by 24,000 BTC in Q4 2025, contrasting sharp 2024 inflows and weakening institutional support.
• Potential Price Targets: Expect intermediate support at $70,000, with a cycle low around $56,000; investors should monitor on-chain metrics for reversal signs.

Conclusion

The Bitcoin bear market declaration by CryptoQuant underscores a pivotal shift in demand dynamics, with ETF holdings declining and large investor growth stalling below trends. This analysis, grounded in on-chain data and historical cycles, highlights the need for caution amid Bitcoin’s 30% drop from its $126,000 peak. As the market navigates this phase, staying informed on indicators like realized price and moving averages will be crucial. Forward-looking investors may view this as a strategic entry point, positioning for potential rebounds in 2026 and beyond.