Bitcoin's Bear Market Entry: A Cyclical Realignment and Strategic Entry Point?

The Bitcoin market in late 2025 is undergoing a profound cyclical realignment, marked by a confluence of on-chain demand contraction, shifting investor behavior, and the exhaustion of prior bullish drivers. As the asset navigates a potential bear market phase, the interplay between macroeconomic forces and granular on-chain metrics offers critical insights into both the depth of the downturn and the strategic opportunities it may create.

On-Chain Demand Dynamics: From Expansion to Contraction

Bitcoin's on-chain demand growth has faltered since early October 2025, signaling a transition into a bearish phase. According to CryptoQuant, this decline is driven by the exhaustion of key demand drivers such as the adoption of US spot Bitcoin ETFs, the US presidential election cycle, and corporate treasury allocation strategies. These factors had previously fueled a surge in institutional and retail participation, but their waning influence has left the market vulnerable to profit-taking and liquidity withdrawal.

Net inflows into Bitcoin ETFs have shifted to net selling, with holdings declining by approximately 24,000 BTC in late 2025. This trend is compounded by overbought conditions in the NVT ratio, which had reached unsustainable levels before the recent price correction. The NVT golden-cross at ~1.51, while historically bullish, now faces downward pressure as transaction volumes fail to keep pace with price declines according to on-chain analysis.

Despite these bearish signals, on-chain metrics like the MVRV (Market Value to Realized Value) ratio and SOPR (Spent Output Profit Ratio) suggest a market still in profit. The MVRV ratio stands at 2.3×, indicating long-term holders are up +230% while short-term holders are up +13%. Meanwhile, the SOPR of ~1.03 reflects measured profit-taking, with most transactions occurring at or near breakeven according to on-chain data. This duality-between macro-level demand contraction and micro-level holder resilience-highlights the complexity of Bitcoin's current phase.

Investor Behavior: Institutional Exit and Liquidity Compression

The withdrawal of liquidity from exchange platforms underscores a shift in investor behavior. Exchange outflows have reached their most negative 7-day moving average since early 2023, with large institutional and whale holders moving Bitcoin to cold storage. This trend reduces available spot market liquidity, amplifying short-term volatility and increasing the likelihood of cascading liquidations.

Miner activity further illustrates this dynamic. The global hashrate has surged to 1 Zettahash/s, reflecting robust network security, but compressed miner margins have forced less efficient operations to exit. Miner outflows, such as the 15,000 BTC sold on April 7, 2025, highlight the pressure on short-term liquidity as block rewards post-halving decline and difficulty adjustments rise.

Corporate treasury strategies, once a cornerstone of Bitcoin's demand, have also shifted. With macroeconomic uncertainty and regulatory scrutiny intensifying, companies are prioritizing cash preservation over speculative allocations. This shift, combined with reduced derivatives activity, signals a broader bearish sentiment among institutional participants according to on-chain analysis.

Key Support Levels: A Contrarian Framework

As Bitcoin's price dips below $90,000 in November 2025, analysts are fixated on critical support levels to gauge the market's trajectory. The Active Realized Price of $89,400 and the True Market Mean Price of $82,400 represent on-chain benchmarks that have historically served as strong support zones according to market analysis. However, the $70,000–$73,000 range has emerged as a pivotal "support flip", aligning with the average acquisition cost of large Bitcoin holders.

CryptoOnchain notes that Bitcoin's inability to recover its former highs increases the likelihood of a breakdown below the $83,000 point of control (POC), forcing a retest of the $70,000–$73,000 level. This zone is strategically significant as it coincides with the Realized Price of long-term holders, who may step in to defend their positions according to on-chain data. While some models, such as the Cumulative Value Days Destroyed (CVDD), suggest a potential bottom near $45,500, the $70,000 level is increasingly viewed as a shallow support-a temporary floor rather than a terminal bottom according to market analysis.

Strategic Entry Point: Balancing Risk and Reward

For contrarian investors, the $70,000 level presents a calculated entry point. Historical data indicates that Bitcoin's bear markets often end with a sharp rebound once key on-chain metrics realign. The current CVDD model, for instance, suggests a 55% drawdown from the all-time high could bottom near $56,000, but the $70,000 level offers a more immediate floor for tactical positioning.

Technical indicators reinforce this view. The RSI and moving averages both suggest a correction to the $70,000–$73,000 range, while the robust chain activity-735K active addresses and 390–400K daily transactions-underscores Bitcoin's enduring utility as both a store of value and a transactional asset according to on-chain analysis.

However, investors must remain cautious. A prolonged bear market could test deeper support levels at $85,000 and $75,000 according to market analysis, and macroeconomic factors such as regulatory shifts or liquidity crunches could exacerbate volatility. The key to success lies in aligning entry points with on-chain signals, such as a rebound in the NVT ratio or a surge in exchange inflows, which could herald a resumption of the long-term bull trend.

Conclusion

Bitcoin's bear market entry in late 2025 reflects a cyclical realignment driven by exhausted demand waves and shifting investor behavior. While the immediate outlook is bearish, the interplay of on-chain metrics and strategic support levels like $70,000 offers a framework for contrarian positioning. For disciplined investors, this phase may represent an opportunity to capitalize on Bitcoin's inherent resilience, provided they remain attuned to the evolving dynamics of demand, liquidity, and macroeconomic sentiment.