Bitcoin Faces Continued Struggles Amid Dwindling Demand as Downtrend Reaches Fifth Month

Summary: Bitcoin is grappling with ongoing challenges, marked by a prolonged price downturn that has persisted for five months. The struggles intensified following a market crash on October 10, 2025, compounded by a drop in spot demand and several unfavorable market conditions.

Key Takeaways

Bitcoin has experienced a five-month downtrend following a major crash in October 2025.
A significant decrease in demand, particularly in spot trading, has been a contributing factor.
Stablecoin outflows and reduced trading volumes point to cautious market sentiment.
Macroeconomic factors and shifts in liquidity continue to shape Bitcoin’s performance and recovery prospects.

Bitcoin BTC

Ongoing Liquidity Challenges

According to analyst Darkfost from CryptoQuant, the decline in demand has been a critical factor behind Bitcoin's challenges. He noted that the October crash initiated a serious liquidity shock, particularly impacting the futures market. This shock continues to exert pressure on Bitcoin prices.

During this incident, open interest plummeted by more than 70,000 BTC within a single day, erasing over $8 billion in futures positions almost instantly. While this event triggered the current downturn, Darkfost emphasized that there are several additional factors contributing to Bitcoin's difficulties.

Stablecoin Outflows Escalate Demand Pressures

Darkfost also pointed out a growing strain on overall market liquidity, underscored by consistent outflows of stablecoins from exchanges. These outflows indicate a reduction in trading activity and a lowered risk appetite among traders. Over a comparable timeframe, the total market cap of stablecoins has decreased by about $10 billion.

The tightening liquidity and prevailing cautious sentiment have created a challenging environment for aggressive buying. He noted that uncertainty remains a dominant market feature, making it hard for Bitcoin to attract new demand or sustain a significant recovery.

Diminishing Spot Volumes Reflect Investor Withdrawal

Data from the spot market further highlights a sharp decline in demand. Since October 2025, Bitcoin's spot trading volumes have dropped by nearly 50% across major exchanges. While Binance still holds the title of the largest spot exchange, its current volume is around $104 billion—significantly lower than previous figures.

In October 2025, Binance reported spot volumes nearing $200 billion, while Gate.io and Bybit recorded volumes of $53 billion and $47 billion, respectively. Since then, trading volumes across the market have consistently declined, sinking to levels not seen since 2024.

Bitcoin Spot Trading Volume | CryptoQuant

Charts depicting spot volume trends confirm this decline. After reaching a peak of $198 billion in October, Binance’s trading volume has gradually fallen to about $106 billion as of the latest report. Similar downward trends can be seen on platforms like Gate.io, Bybit, Kraken, and Coinbase.

Macro Factors Add Further Constraints to Bitcoin

Market analyst Michaël van de Poppe has highlighted additional macroeconomic factors affecting Bitcoin’s challenges, particularly the ISM Manufacturing PMI, which is nearing its first reading above 50 in over three years. This signals one of the longest manufacturing downturns seen recently.

Van de Poppe suggested that Bitcoin's prior rally was mainly driven by the launch and liquidity impact of spot Bitcoin ETFs rather than inherent demand. He contrasted the current cycle with the end of 2021 when the U.S. Federal Reserve initiated quantitative tightening and sharply raised interest rates.

He suggested that we are entering a new phase of quantitative easing as economic growth slows and interest rates drop. Noteworthy peaks in gold and silver prices indicate that we might be at the tail end of this macro phase, potentially paving the way for a robust bull market for Bitcoin and cryptocurrency over the next one to three years.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The opinions expressed herein may reflect the author’s personal views and do not necessarily represent the views of The Crypto Basic. Readers are encouraged to conduct thorough research before making investment decisions. The Crypto Basic is not accountable for any financial losses incurred.