CryptoQuant asserts "The bear market has arrived"! Bitcoin demand momentum has cooled off, possibly testing the $70,000 level again.

On-Chain Data Analysis Company CryptoQuant Issues Warning: Due to a significant weakening in Bitcoin demand momentum, cryptocurrencies may have entered a bear market, and the subsequent downside risks should not be ignored. CryptoQuant recently released a report stating: “The growth in (Bitcoin) demand has clearly slowed, indicating that the market is entering a bear market. Since 2023, Bitcoin has experienced three waves of spot demand surges, driven by the US spot ETF listing, the US presidential election, and Bitcoin reserve companies.”

However, since early October 2025, this demand growth has fallen below the long-term trend line, indicating that the new buying pressure in this cycle has largely been absorbed by the market, causing Bitcoin to lose a key support level. Based on the current weakness, CryptoQuant believes that the downside risk for Bitcoin is gradually emerging, with $70,000 being the first important support zone. If the market cannot regain bullish momentum, a further decline to $56,000 cannot be ruled out. The report states:

From historical experience, Bitcoin’s bear market bottom often aligns with the “Realized Price” (which reflects the average cost basis of all holders), currently around $56,000.

If this level is truly tested, it would mean Bitcoin has fallen approximately 55% from its all-time high, potentially making it the smallest retracement in a bear market to date.

Bitcoin’s medium-term support level is around $70,000.

Regarding the timing of market concerns, CryptoQuant’s Head of Research Julio Moreno revealed: “A pullback to $70,000 could occur within the next 3 to 6 months; as for a deeper drop to $56,000, if it happens, it might be in the second half of 2026.” He further added that this bear market actually began in mid-November this year, following the largest liquidation event in crypto history on October 10. 3 Key Data Points Confirm: Capital is Retreating CryptoQuant listed three critical data points supporting the view that “a bear market has arrived”: 1. ETF Turning into a Net Seller: In Q4 2025, US Bitcoin spot ETFs shifted to a “net outflow” status, reducing holdings by about 24,000 BTC, in stark contrast to strong buying activity during the same period last year. 2. Large Holders Pull Back: Addresses holding 100 to 1,000 BTC (including ETFs and institutions) are growing at a rate below the trend line, a sign of deteriorating demand similar to late 2021, just before the 2022 bear market. 3. Derivatives Cooling Off: The funding rates of perpetual contracts (calculated as a 365-day moving average) have fallen to their lowest levels since December 2023. A decline in funding rates usually indicates reduced leverage willingness among bulls, a typical bear market feature. Additionally, the price has fallen below the 365-day moving average, which is often viewed as a bull-bear dividing line in technical analysis. CryptoQuant also presents a provocative view: “The core engine driving Bitcoin’s 4-year cycle is ‘demand cycles,’ not ‘halving events.’” When demand peaks and begins to decline, regardless of supply-side dynamics, a bear market often ensues. It is noteworthy that CryptoQuant’s bearish outlook sharply contrasts with recent Wall Street perspectives, where market bulls and bears are fiercely battling:

• Citigroup: The baseline scenario predicts Bitcoin will rise to $143,000 in the next 12 months, with the most optimistic scenario reaching $189,000;
• JPMorgan: Based on gold comparison valuation, maintains a target of $170,000 for Bitcoin.
• Standard Chartered: While becoming more cautious and halving Bitcoin’s 2026 target price, still maintains a $150,000 target.
• Bitwise: Firmly believes Bitcoin will hit a new all-time high again in 2026.