Bitcoin News Today: Bitcoin Bear Phase Begins as Demand Peaks and ETFs Turn Sellers

Bitcoin's Market Cycle and Bearish Signals

Bitcoin's market cycle has entered a bearish phase, with on-chain and derivatives data pointing to demand exhaustion, according to CryptoQuant's latest report. The firm notes that structural support for higher prices, which had driven Bitcoin higher since 2023, is now weakening. Key demand-driven catalysts, including U.S. spot Bitcoin ETFs, U.S. presidential election optimism, and corporate treasury adoption, have largely priced out of the market.

Bitcoin's demand growth has slowed significantly since early October 2025, falling below its long-term trend. This shift has historically marked the end of bullish phases, regardless of other market narratives. With incremental demand diminishing, the upward momentum that defined this cycle is now reversing.

Institutional and large-holder demand is also trending downward. U.S. spot Bitcoin ETFs have moved from accumulation to distribution in Q4 2025, with net holdings dropping by 24,000 BTC. At the same time, on-chain data shows that addresses holding 100–1,000 BTC - often linked to ETFs and treasuries - are also growing below historical trends.

Signs of Weakness in Derivatives and Price Structure

Derivatives data reinforces the bearish signals. Funding rates in perpetual futures have fallen to their lowest level since December 2023, indicating reduced willingness among traders to hold leveraged long positions. Lower funding rates are more typical of bear markets than bull phases, reflecting weaker risk appetite and declining conviction among market participants.

Bitcoin's price has also broken below its 365-day moving average, a key technical level that historically distinguishes bull from bear markets. According to CryptoQuant, Bitcoin's four-year cycle is driven by demand expansions and contractions rather than halving events or supply-side mechanics.

Downside Projections and Support Levels

Despite the bearish turn, the projected downside appears relatively shallow. Past bear market bottoms have aligned with Bitcoin's realized price, currently near $56,000. This would represent a 55% drawdown from the recent all-time high of over $126,000. If this scenario unfolds, it would be the smallest bear market decline on record.

An immediate support level is expected around $70,000, a key threshold to watch in the near term. CryptoQuant's head of research, Julio Moreno, estimates that Bitcoin could reach this level within three to six months. A deeper decline toward $56,000 is a longer-term risk, potentially materializing in the second half of 2026 if the downtrend persists.

Institutional and Market Reactions

Bitcoin's price shift has already prompted reactions from institutional players. Fidelity Investments, for example, forecasts a bear market in 2026, with Bitcoin potentially bottoming between $65,000 and $70,000. Global head of macro Jurrien Timmer notes that Bitcoin likely reached its peak in October 2025, consistent with historical four-year cycles.

U.S. spot ETFs, once strong net buyers in Q4 2024, have become net sellers in Q4 2025. This shift reflects broader market sentiment and institutional caution. Meanwhile, corporate treasuries and ETF-related on-chain addresses show continued weakness, mirroring patterns seen ahead of the 2022 bear market.

Risks and Longer-Term Outlook

While the near-term outlook is bearish, some analysts remain optimistic about Bitcoin's long-term trajectory. Fidelity's Timmer, for instance, identifies as a secular bull on Bitcoin despite the short-term downturn. However, he cautions that 2026 may be a correction year, with bear markets typically lasting around 12 months.

CryptoQuant echoes this view, emphasizing that Bitcoin's four-year cycle is governed by demand dynamics rather than halving events. When demand peaks and rolls over, bear markets tend to follow, regardless of other factors. While this shift signals a bear phase, it does not necessarily imply an end to Bitcoin's long-term growth potential.

What This Means for Investors

Investors are now closely monitoring key support levels and demand trends. The $70,000 level will be a critical test in the coming months, with a break below that mark likely deepening the bearish scenario. For now, the focus remains on Bitcoin's ability to stabilize and whether demand can recover in the form of new adoption or macroeconomic catalysts.

Bitcoin's bear market, while potentially shallow, represents a significant shift in the market's trajectory. As demand continues to contract and institutional activity wanes, the cryptocurrency faces a period of consolidation ahead. Investors are advised to remain cautious, with an eye on both on-chain metrics and broader market sentiment.