Analysts: Bitcoin demand shrinks, bear market signals mount
Bitcoin demand growth has slowed markedly since October 2025, indicating the start of a new bear market phase, according to analysts at CryptoQuant.
CryptoQuant noted three distinct waves of investor interest in the current cycle: the first in January 2024 following the launch of U.S. spot Bitcoin exchange-traded funds (ETFs), the second after the results of the 2024 U.S. presidential election, and the third tied to a BTC treasury company bubble. The firm said demand growth has trended below its prior pace since early October 2025, suggesting most incremental demand for this cycle has already been absorbed, reducing a key support for prices.
Apparent demand for Bitcoin fell in Q4 2025. Source: CryptoQuant
Institutional flows have also moderated, with the total BTC held by ETFs decreasing by about 24,000 BTC in Q4 2025, which CryptoQuant described as a sharp reversal from the accumulation observed in Q4 2024.
Perpetual futures funding rates have declined to their lowest levels since December 2023, adding to signals that market conditions have turned bearish.
Analysts also highlighted a breakdown below the 365-day moving average, a level often viewed as a dynamic support. Bitcoin continues to trade well below its 365-day moving average of about $98,172. Source: TradingView
Some analysts see potential improvement in 2026 as sentiment stays cautious
Despite recent weakness, some market participants continue to project higher BTC prices in 2026, citing the prospect of stronger demand and lower interest rates. Historically, falling rates have been supportive for cryptocurrencies and other risk assets.
Overall market sentiment remains in “fear” territory, according to CoinMarketCap’s Crypto Fear and Greed Index.
Only 22.1% of investors expect the Federal Open Market Committee (FOMC) to lower interest rates at its next meeting in January, according to the CME Group’s FedWatch tool.
Interest rate target probabilities for the January 2026 FOMC meeting. Source: CME Group
In the policy backdrop, U.S. President Donald Trump sought to push Federal Reserve Chair Jerome Powell to cut rates in 2025 by threatening to dismiss him. Powell’s term ends in May 2026, and Trump is reviewing potential successors who are expected to favor rate reductions.
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