Bitcoin Demand Declines, Indicating a New Bear Market: Analysts

Analysts from the crypto market analysis platform CryptoQuant have observed a significant slowdown in Bitcoin demand since October 2025, suggesting that the cryptocurrency has entered a new bear market phase. This decline follows three main waves of investor interest in BTC, reflecting changing market sentiments.

Key Takeaways

Demand for Bitcoin has decreased markedly since October 2025, hinting at a bear market.
Investor interest occurred in three waves, influenced by ETF launches and political events.
Institutional demand fell, with a notable drop in Bitcoin held in ETFs.
Funding rates for traders have reached new lows, further indicating bearish trends.
Despite bearish sentiments, some analysts predict a potential price recovery in 2026.

Bitcoin Demand Declines, Indicating a New Bear Market: Analysts

Bitcoin Demand Decline Signals Bear Market Phase

According to analysts from CryptoQuant, Bitcoin's demand growth has dropped significantly since October 2025, indicating the cryptocurrency is likely in another bear market cycle. They highlighted that investor interest in Bitcoin, measured in three distinct waves, began in January 2024.

The initial wave was sparked by the launch of Bitcoin exchange-traded funds (ETFs) in the United States, while the second surge followed the results of the 2024 U.S. presidential election, and the third wave stemmed from a bubble among companies holding Bitcoin in their treasuries.

Bitcoin Price, Investments, Price Analysis
Apparent demand for Bitcoin fell in Q4 2025. Source: CryptoQuant

Institutional demand has also seen a contraction, with Bitcoin held in ETFs decreasing by around 24,000 BTC in Q4 2025. This is a stark contrast to the accumulation patterns observed in Q4 2024, according to CryptoQuant. Additionally, the funding rates—costs incurred by perpetual futures traders to maintain their positions—have plunged to their lowest levels since December 2023, further signaling a bear market for Bitcoin.

Another key indicator of this bearish trend is the breakdown of Bitcoin's price structure below the 365-day moving average, which serves as a critical support level for the asset.

Bitcoin Price, Investments, Price Analysis
Bitcoin continues to trade well below its 365-day moving average of about $98,172. Source: TradingView

Market Sentiment: Fear and Hope

While some analysts maintain a hopeful outlook for 2026, anticipating an increase in BTC prices due to rising demand and declining interest rates, the overall sentiment within the crypto market remains decidedly fearful. This is illustrated by the Crypto Fear and Greed Index from CoinMarketCap.

As per the Chicago Mercantile Exchange (CME) Group’s FedWatch tool, only 22.1% of investors believe that the Federal Open Market Committee (FOMC) will lower interest rates in its upcoming January meeting.

Bitcoin Price, Investments, Price Analysis
Interest rate target probabilities for the January 2026 FOMC meeting. Source: CME Group

In 2025, U.S. President Donald Trump attempted to influence Federal Reserve Chairman Jerome Powell into lowering interest rates, even signaling the possibility of firing him. Powell's term is set to conclude in May 2026, and Trump is considering potential replacements who might support interest rate cuts.

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