Bitcoin has entered a bear market as demand weakens and large investors reduce exposure, blockchain analytics firm CryptoQuant said on Thursday, warning prices could fall toward $70,000 or even $56,000 in the longer term.
CryptoQuant said bitcoin demand growth has slipped below its long-term trend since early October, meaning the main drivers of this cycle have already played out. The firm pointed to three major demand waves since 2023, including the launch of U.S. spot bitcoin exchange-traded funds, the U.S. presidential election, and increased buying by corporate treasury firms.
“With demand growth now rolling over, a key source of price support has disappeared,” CryptoQuant said.
Institutional demand is also weakening. U.S. spot bitcoin ETFs became net sellers in the fourth quarter of 2025, with holdings falling by about 24,000 bitcoins, compared with strong buying in late 2024. Wallets holding between 100 and 1,000 bitcoins, a group that includes ETFs and treasury companies, are growing more slowly, a pattern last seen before the 2022 bear market.
Derivatives markets are also showing lower risk appetite. Funding rates for perpetual futures have dropped to their lowest levels since December 2023, indicating traders are less willing to hold long positions, a trend usually seen during bear markets.
Bitcoin’s price has also broken below its 365-day moving average, a technical level that has historically marked the shift between bull and bear markets.
CryptoQuant said bitcoin’s four-year cycle is driven mainly by changes in demand rather than by the halving event, which reduces supply. “Demand cycles — not halvings — drive bitcoin’s four-year cycle,” the firm said.
Despite the bearish outlook, CryptoQuant said the downturn could be relatively shallow by historical standards. Previous bear market lows have often aligned with bitcoin’s realized price, currently near $56,000, implying a possible decline of around 55% from the recent record high. The firm sees intermediate support around $70,000.