What is Happening to Bitcoin?
Bitcoin, the world’s largest cryptocurrency, has entered a bear market, as reported by blockchain analytics firm CryptoQuant. The decline in demand and reduced exposure by large investors are key drivers of this downturn. With prices potentially falling to $70,000 or even $56,000, many are left wondering: What’s next for Bitcoin?
Demand Growth Weakens
Since early October, Bitcoin’s demand growth has slipped below its long-term trend. According to CryptoQuant, this indicates that the main drivers behind recent surges—such as the launch of U.S. spot Bitcoin exchange-traded funds (ETFs), the U.S. presidential election, and corporate treasury investments—have played out. With diminishing demand, a key source of price support has disappeared.
Institutional Interest Declines
Institutional demand, another crucial aspect, is also showing signs of weakening. U.S. spot Bitcoin ETFs became net sellers in Q4 2025, shedding about 24,000 Bitcoins. Wallets holding between 100 and 1,000 Bitcoins—typically ETFs and treasury companies—are growing at a slower pace. This same pattern was observed before the 2022 bear market.
Shifting Trends in Derivatives Markets
Further signs of reduced interest are visible in derivatives markets. Funding rates for perpetual futures have reached their lowest since December 2023, signaling less appetite from traders willing to hold long positions. Historically, this trend is synonymous with bear markets.
Technical Signals: A Bearish Outlook
Bitcoin’s price break below its 365-day moving average—a technical level often marking shifts between bull and bear markets—reinforces the bearish sentiment. CryptoQuant’s data suggests that Bitcoin’s four-year cycle primarily hinges on demand cycles, rather than the halving event, which is traditionally associated with supply reductions.
How Severe Could This Bear Market Be?
Despite the negative outlook, CryptoQuant highlights that this downturn may be relatively shallow compared to historical bear markets. Historically, Bitcoin’s bear market lows have aligned with its realized price, currently near $56,000. The firm also predicts intermediate support around $70,000, indicating a potential decline of around 55% from the recent peak.
What Does This Mean for Investors?
As the crypto market evolves, staying informed is more crucial than ever. For seasoned investors or novices looking to explore, keeping track of real-time data and insightful analyses can help mitigate risks. If you’re an active trader or an enthusiast exploring market opportunities, tools like the CoinPedia Crypto Portfolio Tracker can help you manage your investments effectively and stay ahead of trends.
Disclaimer: Please ensure you do your research before making any financial decisions. Neither the author nor the publisher assumes responsibility for any losses resulting from investment choices.
