Quick Takeaways
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Bear Market Confirmation: Bitcoin has dropped below its 365-day moving average, signaling a confirmed bear market, with significant downside risk evident in its technical structure.
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Demand and Liquidity Decline: Both spot and institutional demand for Bitcoin have weakened, with U.S. ETFs shifting from net buyers to sellers, exacerbating selling pressure and creating a demand gap of over 50,000 BTC.
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CryptoQuant Insights: The CryptoQuant Bull Score Index has plummeted to zero, reflecting a drastic sentiment change following a $19 billion liquidation event, marking the current phase as worse than early 2022.
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Liquidity Reversal: Tether’s market cap has seen its 60-day growth turn negative for the first time since October 2023, indicating tight liquidity typical of a bear market cycle.
CryptoQuant Breaks Down Current Bear Market Signals
The crypto market has entered a challenging phase, with various indicators signaling a bear market. According to research from CryptoQuant, recent trends show a decrease in demand and tightening liquidity.
Bitcoin (BTC) recently fell below its 365-day moving average (MA), a key technical indicator. This decline is notable, as BTC traded at $110,000 before the October liquidation event, leading to significant losses. Currently, the price hovers below $68,000, reflecting a 23% decline since falling below this crucial MA. Analysts relate this performance to the early 2022 bear phase, marking a shift in market sentiment.
Weak demand compounds the situation. The Bitcoin Price Premium on Coinbase has been negative since mid-October, indicating less interest in the U.S. market compared to global counterparts. Furthermore, the U.S. spot exchange-traded fund (ETF) market shows a reversal in demand. Last year, this market absorbed over 46,000 BTC, while it has since sold about 15,000 BTC. This shift has intensified selling pressure, contributing to a notable gap in market demand.
Liquidity also faces challenges. The 60-day growth of Tether’s market cap turned negative for the first time since October 2023. Previously, Tether’s expansion peaked at $15.9 billion in late October 2025 before this downturn. Such trends often precede prolonged bear cycles, reflecting historical behavior in asset markets.
While current conditions appear tough, they also pose opportunities for technological development. Emerging projects may address gaps in liquidity and demand. The evolution of decentralized finance (DeFi) could pave the way for innovative solutions that meet market needs efficiently. By examining these trends, investors and developers can better navigate this evolving landscape.
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Disclaimer
This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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