BTC Demand Plunge Signals Bear Market Start
Multiple factors such as ETF outflows, diminishing demand, and Bitcoin’s price dropping beneath crucial support levels suggest the onset of a new BTC bear market.
Apparent demand for Bitcoin has notably decelerated since October 2025, indicating that the cryptocurrency has likely entered a fresh bear market phase, as per experts from the crypto analytics firm CryptoQuant.
Throughout the ongoing market cycle, investor interest in BTC has manifested in three distinct surges: the initial one in January 2024, followed by subsequent waves tied to major events, according to CryptoQuant researchers.
The inaugural surge was triggered by the introduction of Bitcoin spot exchange-traded funds in the United States. The second came after the outcome of the 2024 United States presidential election, while the third represented a speculative bubble in companies accumulating BTC treasuries. CryptoQuant notes:
Demand growth has dropped below its established trend starting from early October 2025. This development signals that the majority of incremental demand for this cycle has been exhausted, thereby eroding a primary foundation of price stability.
Institutional appetite for Bitcoin has likewise waned, evidenced by a reduction of approximately 24,000 BTC in the total holdings of Bitcoin ETFs during the fourth quarter of 2025. This marks a stark departure from the aggressive accumulation observed in the same period of 2024, according to CryptoQuant.
Additionally, funding rates—the periodic fees that perpetual futures traders pay to sustain their leveraged positions—have plummeted to their lowest points since December 2023, providing further evidence of a bearish shift in BTC market dynamics.
Analysts highlighted one more critical factor: Bitcoin’s price has fractured key technical support by trading below its 365-day moving average, a vital dynamic threshold that typically underpins asset valuations during bullish periods.
Bitcoin persists in trading substantially under its 365-day moving average, currently around $98,172.
Market Sentiment Remains Fearful Despite Some Optimism for 2026
Although certain market observers still project elevated Bitcoin valuations in 2026, fueled by prospective surges in demand and reductions in interest rates, the prevailing mood in the cryptocurrency space is dominated by fear.
Declining interest rates historically serve as favorable drivers for cryptocurrency valuations and other high-risk investment categories.
Nevertheless, the broader crypto market sentiment lingers in the fear zone, as reflected by CoinMarketCap’s Crypto Fear and Greed Index.
Just 22.1% of market participants anticipate that the Federal Open Market Committee will implement interest rate cuts at its upcoming January meeting, based on data from the Chicago Mercantile Exchange Group’s FedWatch tool.
United States President Donald Trump has sought to influence Federal Reserve Chairman Jerome Powell by advocating for interest rate reductions in 2025, including public threats regarding Powell’s position.
Powell’s tenure concludes in May 2026, prompting Trump to evaluate prospective successors anticipated to pursue more accommodative monetary policies through rate cuts.
