Bitcoin Enters Bear Market Territory as Institutional Demand Dips: Insights from CryptoQuant

As per recent findings from CryptoQuant, Bitcoin appears to be entering a bear market phase again. This is indicated by various on-chain metrics, diminishing institutional investment, and tighter liquidity conditions that point to significant downside risks.

Key Takeaways

Market Status: Bitcoin shows signs of a renewed bear market, highlighted by various metrics from CryptoQuant.
Institutional Demand: Preliminary data shows a reversal in institutional interest, with U.S. exchange-traded funds (ETFs) shifting from buyers to sellers.
Liquidity Concerns: The liquidity in the stablecoin market is contracting, the first such decline since 2023.
Price Projections: Without new market catalysts, Bitcoin could drop further toward the $60,000 to $70,000 range.

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Market Review: Shift Towards Bearish Conditions

According to CryptoQuant's latest Crypto Weekly Report, a variety of on-chain metrics now support the observation of a bear market. The firm noted that Bitcoin's price reached nearly $126,000 in early October, at which point the Bull Score Index was at 80, indicating a strong bullish sentiment. However, after a liquidation event on October 10, the index turned bearish and has since fallen to zero, even as BTC prices hover around $75,000. This development suggests a broad structural weakness in the market.

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Change in Institutional Demand: From Buyers to Sellers

CryptoQuant has observed a significant shift in institutional demand, particularly for U.S. spot Bitcoin ETFs. Last year, these ETFs had accumulated approximately 46,000 BTC, but this year, they have transitioned to become net sellers, offloading around 10,600 BTC. This change reflects a substantial demand gap of 56,000 BTC compared to 2025, which is exerting ongoing selling pressure in the market.

Weak U.S. Spot Demand Continues

Despite declining prices, the level of U.S. investor activity remains low. The Coinbase Premium, often used as a benchmark for U.S. spot demand, has been negative since mid-October. Historically, positive trends in the Coinbase Premium correlate with robust U.S. purchasing activity during bull markets, a trend that has yet to be seen, indicating limited dip-buying interest from both retail and institutional investors.

Stablecoin Liquidity Faces Its First Decline Since 2023

The report also indicates that liquidity conditions are tightening. Specifically, USDT's 60-day market cap growth has decreased by $133 million, marking the first contraction since October 2023. Stablecoin liquidity had peaked at $15.9 billion in late October 2025, and this downturn aligns with typical liquidity drawdowns found in bear markets. The apparent growth in spot demand over the past year has seen a drastic decline of 93%, falling from 1.1 million BTC to a mere 77,000 BTC, which further highlights the slowdown in new capital entering the market.

Technical Analysis: Increased Downside Risk

CryptoQuant warns that Bitcoin has fallen below its 365-day moving average for the first time since March 2022. Since this drop, BTC has decreased by 23% over the last 83 days, a notably sharper decline compared to the early phase of the 2022 bear market. With important on-chain support levels lost, CryptoQuant suggests that Bitcoin may face further declines toward the $70,000 to $60,000 range unless new catalysts emerge to stimulate demand and improve liquidity.

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