CryptoQuant: The bear market may have begun, with a mid-term support level expected at $70,000

On-chain analytics company CryptoQuant stated that the demand for Bitcoin has significantly slowed down, indicating that a bear market is approaching. Since 2023, Bitcoin has experienced three major waves of spot demand—driven respectively by the launch of the U.S. spot ETF, the results of the U.S. presidential election, and the Bitcoin treasury company bubble—but the growth in demand has fallen below trend levels. This suggests that most of the new demand in this cycle has already materialized, and the key pillars supporting the price have also disappeared.

The demand from institutions and large holders is currently contracting rather than expanding: the U.S. spot Bitcoin ETF turned into net selling in the fourth quarter of 2025, with holdings decreasing by 24,000 Bitcoins, in stark contrast to the strong accumulation in the fourth quarter of 2024. Similarly, the growth of addresses holding 100 to 1,000 Bitcoins (representing ETFs and treasury companies) is also below trend levels, echoing the deterioration in demand seen at the end of 2021 before the bear market of 2022.

The derivatives market confirms the weakening risk appetite: the funding rate for perpetual futures (365-day moving average) has fallen to its lowest level since December 2023. Historically, this decline reflects a reduced willingness to maintain long positions, a pattern that typically occurs in bear markets rather than bull markets.

The price structure is deteriorating alongside weak demand: Bitcoin has fallen below its 365-day moving average, a key long-term technical support level that has historically marked the boundary between bull and bear markets. The demand cycle, rather than halving, drives Bitcoin's four-year cycle: the current decline further indicates that Bitcoin's cyclical behavior is primarily governed by the expansion and contraction of demand growth, rather than the halving events themselves or past price performance. When demand growth peaks and begins to decline, a bear market often follows, regardless of the dynamics on the supply side.

Downward reference points suggest a relatively small bear market magnitude: historical data shows that the bottom of Bitcoin's bear markets has been roughly consistent with the realized price, currently close to $56,000, which means the drop from recent historical highs could reach 55%—the smallest drop ever recorded. The expected mid-term support level is around $70,000.