CryptoQuant Report Suggests Bitcoin Demand Slowdown Signals Onset of Bear Market Phase

In a December 2025 analysis, the firm CryptoQuant presented data strongly suggesting that Bitcoin (BTC) is entering a bearish market phase. This conclusion stems from observing a critical deceleration in demand growth. This slowdown was evident through reduced institutional purchasing via U.S. spot ETFs and weakening sentiment indicators across derivative markets, even as the price experienced short-term stabilization.

For the week leading up to December 21, 2025, Bitcoin’s price traded within the $86,000 to $90,000 range. This consolidation followed a sharp retreat from the all-time high, which had surpassed $126,000 back in October 2025. CryptoQuant determined that the upward trajectory of BTC demand had dipped below its established ascending trend line. This trend line had been in place since early October 2025, coinciding with a major liquidation event known in the market as the 'October 10 sell-off.'

Institutional demand dynamics presented a starkly contrasting picture. During the fourth quarter of 2025, U.S. spot Bitcoin ETFs actually turned into net sellers, offloading approximately 24,000 BTC. This marks a significant departure from the aggressive accumulation witnessed throughout the fourth quarter of 2024. Furthermore, the technical underpinnings of the market deteriorated as BTC dropped beneath its 365-day moving average. Historically, this specific moving average acts as a crucial demarcation line separating bullish periods from bearish ones.

Sentiment in the derivatives market also cooled considerably. Funding rates plummeted to their lowest readings since December 2023. This drop signals a reduced appetite among traders to maintain long positions, a pattern more commonly associated with bear market conditions. CryptoQuant emphasized that Bitcoin's four-year cycle is more heavily influenced by phases of demand contraction and expansion rather than solely by the halving event itself.

The firm's analysts identified three primary waves of spot demand that have fueled the bull cycle beginning in 2023. These included the launch of U.S. spot ETFs, the outcome of the U.S. presidential election, and the 'bubble' surrounding corporations holding Bitcoin on their balance sheets. According to the analysts, the majority of demand gains for the current cycle have already been realized, effectively removing one of the key pillars supporting the price.

Addresses holding between 100 and 1,000 BTC—a cohort often representative of ETF flows and corporate treasuries—are also showing declining metrics below their trend. This pattern echoes the demand deterioration seen in late 2021, which preceded the bear market of 2022. This historical parallel adds weight to the current bearish signals.

CryptoQuant’s report also outlined specific benchmarks for potential downside movement. The realized price, which has historically marked the floor of bear markets, currently sits near the $56,000 level. This suggests a potential decline of around 55% from the recent peak, which, if realized, would represent the mildest drawdown observed in any bear market cycle to date. Intermediate support is projected to be found around the $70,000 zone. At the time of the analysis, BTC was trading near $88,170. Cumulatively, net inflows into U.S. spot ETFs since their inception remain robust at $57.56 billion.