Bitcoin Demand Declines, Analysts Predict Bear Market

Bitcoin demand has notably declined, indicating a potential entry into a bear market, as reported by analysts from CryptoQuant. Demand growth has fallen below trend since early October 2025, marking a significant decrease in investor interest.

The total amount of Bitcoin held in exchange-traded funds has decreased by about 24,000 BTC in Q4 2025, contrasting sharply with accumulation patterns observed in Q4 2024. Additionally, funding rates for perpetual futures traders are at their lowest since December 2023, further supporting the bearish outlook.

Bitcoin's price has also broken down below its 365-day moving average, currently trading well below a critical support level of approximately $98,172. Despite the bearish sentiment, some analysts hold a more optimistic view for 2026, citing potential demand increases and lower interest rates as factors that could drive prices higher.

However, overall market sentiment remains in fear territory, with only 22.1% of investors anticipating a rate cut by the Federal Open Market Committee's next meeting in January 2026. Santiment's analysis highlights that traders are not displaying sufficient fear to confirm a market bottom, suggesting Bitcoin could potentially slide to around $75,000, reflecting a further decline from its current price of $88,350.

While some analysts, like Jurrien Timmer from Fidelity, predict Bitcoin could drop to around $65,000, others believe a bullish turnaround could be forthcoming as Bitcoin's relative strength index nears three-year lows against gold, indicating a potential undervaluation.

However, concerns persist as historical patterns suggest that the failure to hold key support levels could signal the start of a prolonged bear market.