- Bitcoin demand growth has significantly slowed since October 2025, suggesting entry into a new bear market cycle.
- Bitcoin demand rose in three waves during 2024-2025, linked to US Bitcoin ETFs, the 2024 US presidential election, and BTC treasury company accumulation.
- Institutional Bitcoin holdings, including ETFs, declined sharply in Q4 2025 compared to the previous year.
- Bearish signals include falling funding rates for Bitcoin perpetual futures and price dropping below the 365-day moving average.
- Market sentiment remains fearful amid low expectations for Federal Reserve rate cuts, despite some analysts projecting higher Bitcoin prices in 2026.
Bitcoin (BTC) demand growth has slowed considerably since October 2025, indicating that the cryptocurrency may have entered another bear market, according to analysts from CryptoQuant. Demand surged in three distinct waves during the current market cycle, starting in January 2024. The initial wave coincided with the launch of Bitcoin exchange-traded funds (ETFs) in the United States, the second followed the 2024 US presidential election, and the third was driven by a BTC treasury company bubble, as noted by CryptoQuant analysts.
CryptoQuant stated, “Demand growth has fallen below trend since early October 2025. This indicates that the bulk of this cycle’s incremental demand has already been realized, removing a key pillar of price support.” Institutional demand has diminished notably, with total Bitcoin holdings in ETFs falling by approximately 24,000 BTC in the fourth quarter of 2025. This contrasts sharply with the accumulation trends observed in Q4 2024.
Funding rates, which are fees perpetual futures traders pay to maintain positions, have dropped to their lowest level since December 2023. This decrease serves as another indicator of the prevailing bear market conditions. Additionally, Bitcoin’s price broke below its 365-day moving average, a dynamic support level vital for price stability. Currently, Bitcoin continues to trade well below this average, near $98,000, according to Binance%3ABTCUSD”>price data.
Some analysts maintain optimistic views for Bitcoin’s price recovery in 2026, citing potential increased demand and lower interest rates, which positively affect cryptocurrencies and other risk assets. However, market sentiment remains dominated by fear, as reflected in CoinMarketCap’s Crypto Fear and Greed Index. Only 22.1% of investors currently expect the Federal Open Market Committee (FOMC) to lower interest rates at its next meeting in January, per the Chicago Mercantile Exchange (CME) Group’s FedWatch tool.
In 2025, former US President Donald Trump reportedly pressured Federal Reserve Chairman Jerome Powell to reduce interest rates by threatening to dismiss him. Powell’s term expires in May 2026, and replacements who favor rate cuts are under consideration, as mentioned here.
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