Is Bitcoin Entering a Structural Bear Market?

Bitcoin's Q4 2025 performance has been a rollercoaster of bearish momentum, with a 15.13% net loss marking its worst quarterly drawdown since 2018. November alone accounted for 74% of this decline, pushing prices back to early May levels and leaving nearly 99% of short-term holders in unrealized losses. This collapse has sparked a critical question: Is Bitcoin entering a structural bear market? To answer this, we must dissect on-chain sentiment shifts, key support level breakdowns, and valuation metrics like the NVT ratio.

On-Chain Sentiment: From Overheating to Panic

The MVRV-Z ratio (Market Value to Realized Value) stood at 2.31 in Q4 2025, signaling an overheated market but not extreme overvaluation. This metric, which compares Bitcoin's market value to its realized value (the total cost basis of all holdings), suggests that while the market was inflated, it had stabilized compared to earlier peaks in July and August. However, this stability has since unraveled. The Fear & Greed Index has plummeted into "extreme fear" territory, a psychological shift that often precedes capitulation.

Meanwhile, the NVT (Network Value to Transactions) ratio-a valuation metric comparing Bitcoin's market cap to on-chain transaction volume-has stabilized around a "golden-cross" threshold of ~1.51. This suggests valuations remain supported by real transactional activity rather than speculative mania. Yet, the recent outflow of nearly $3 billion from Bitcoin ETFs in November indicates eroding confidence, particularly among retail investors.

Technical Breakdown: Four Lower Lows and Failing Supports

Technically, Bitcoin has printed four consecutive lower lows since peaking at $126,000 in early October. The failure to hold key support levels, including the critical $98,000 threshold on November 14, has confirmed a bearish trend. This pattern is not merely a correction but a structural breakdown. The UTXO Realized Price Distribution (URPD) data reveals that 592,000 BTC-held at a cost basis of $112,000-is now at risk of being realized at a loss according to analysis. This creates a self-fulfilling prophecy: as more holders sell to cut losses, downward pressure intensifies.

A visual representation of Bitcoin's price action in Q4 2025 would show a sharp descent from $126,000 to $96,712 according to analysts, punctuated by four lower lows and a breakdown below the $98,000 support level.

Institutional Accumulation vs. Retail Flight

While retail investors are fleeing, institutional activity tells a different story. Q3 spot ETF inflows totaled $7.8 billion, and entities like Strategy Inc. (MSTR) added 388 BTC in October alone according to data. This institutional buying, however, has not been enough to offset the panic-driven outflows. The October 10 crash on centralized exchanges-where Bitcoin dropped 14%-highlighted a structural shift toward institutional dominance. Post-liquidation buying reinforced downside support, but the recent ETF outflows suggest even institutional confidence is fraying.

Valuation Shifts and Macro Factors

The NVT ratio's stabilization at ~1.51 according to analysis indicates that Bitcoin's valuation remains anchored to its utility as a store of value and medium of exchange. However, this metric must be contextualized within broader macroeconomic trends. The Fed's rate-cutting cycle and global liquidity expansion have historically supported risk assets according to market research, yet Bitcoin's price action suggests these tailwinds are being overshadowed by short-term selling pressure.

Conclusion: Structural Bear or Temporary Correction?

Bitcoin's Q4 2025 slump has all the hallmarks of a structural bear market: eroding support levels, extreme fear sentiment, and a wave of forced selling. Yet, the underlying fundamentals-stable NVT ratios, institutional accumulation, and post-halving supply dynamics-suggest this may be a temporary correction rather than a permanent regime shift. Investors must monitor whether the $98,000 support level holds and whether ETF inflows resume. For now, the market is in a state of flux, with both bears and bulls making their cases.