Key Takeaways
Recent market analysis suggests Bitcoin is transitioning into a bear phase, marked by declining institutional demand, negative ETF flows, and a breakdown of key technical support. While some remain optimistic for 2026, current sentiment is dominated by fear.
Is the Bitcoin Bull Run Over? Analysts Signal a Shift
According to a new report from on-chain analytics firm CryptoQuant, Bitcoin's apparent demand growth has slowed dramatically since October 2025. This slowdown is a primary indicator that the flagship cryptocurrency may have entered a new bear market cycle.
The Three Waves of Demand Have Crested
CryptoQuant analysts identified three distinct waves of investor demand in the current cycle:
- First Wave (January 2024): Triggered by the landmark launch of spot Bitcoin ETFs in the United States.
- Second Wave (Late 2024): Fueled by the outcome of the U.S. presidential election.
- Third Wave (2025): Driven by a "BTC treasury company bubble."
The report notes that this cycle of demand surges now appears to have concluded.
Institutional Sentiment Cools: ETF Outflows Tell a Story
A significant shift in institutional demand is evident in ETF data. CryptoQuant highlights a "sharp contrast" between Q4 2024 and Q4 2025. While institutions were accumulating a year ago, U.S. Bitcoin ETFs saw a net outflow of approximately 24,000 BTC in the last quarter of 2025, signaling a major pullback.
Technical and Derivatives Data Confirm the Trend
Further evidence of a bearish turn comes from other market metrics:
- Funding Rates: The fees in the perpetual futures market have fallen to their lowest levels since December 2023, indicating declining speculative leverage and bullish enthusiasm.
- Price Structure Breakdown: Bitcoin's price has broken below its critical 365-day moving average, a long-term dynamic support level watched closely by analysts. This technical breakdown is often seen as a confirmation of a broader trend reversal.
"Institutional demand has also contracted, with the total amount of Bitcoin held in ETFs declining by about 24,000 BTC in Q4 2025, a 'sharp contrast' to the accumulation behavior seen in Q4 2024," CryptoQuant said.
Diverging Outlooks: Fear vs. Future Catalysts
Despite the current bearish signals, some market participants maintain a positive long-term price forecast for 2026. Their optimism hinges on potential catalysts like increased adoption and, crucially, lower interest rates from the Federal Reserve, which traditionally benefit risk assets like cryptocurrency.
However, the prevailing crypto market sentiment is currently negative. The widely-followed Crypto Fear and Greed Index remains entrenched in "Fear" territory. Market expectations for near-term rate cuts are also low, with the CME FedWatch Tool indicating only a 22.1% probability of a cut at the January FOMC meeting.
The political landscape adds another layer of uncertainty. Reports suggest former President Donald Trump attempted to pressure Fed Chair Jerome Powell for rate cuts in 2025, with plans to appoint a more dovish successor when Powell's term expires in May 2026.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. All trading involves risk. Readers should conduct their own research before making any financial decisions.
