Bitcoin’s 2025 was anticipated as the era of the “supercycle,” driven by unprecedented institutional engagement and a more favorable regulatory landscape from Washington.
However, the year is concluding on a markedly different note.
As December approaches, the leading digital currency is not on the brink of a new era but is instead grappling with ongoing performance challenges. The earlier rally has diminished, spot prices are declining, and retail participation has waned just as the narrative backing has succumbed to the realities of a correction.
Consequently, on-chain data now indicate what analysts are calling a “bear season,” prompted by a structural shortfall in demand for Bitcoin at these price levels.
The bear market
The optimistic narrative for 2025 began to unravel not with a major crash, but through the realization that this year’s highs were more fragile than they appeared.
Bitwise CEO Hunter Horsley has informed investors that he perceives this year as a concealed bear market, asserting that Bitcoin has been in a “bear season” since early 2025, despite record-high prices.
He opines:
“We will look back on 2025 and recognize that it’s been a bear market since February — obscured by the persistent demand from DATs and Bitcoin Treasury Companies.”
Importantly, in the last quarter of 2025, US spot Bitcoin ETFs transitioned from net accumulation to net redemptions, resulting in a reduction of around 24,000 BTC in aggregate holdings.
Key marginal buyers, including Bitcoin treasury companies, have also reduced or ceased their purchases.
As this flow decreases, the market is responding more to its fundamental demand profile, with prices adjusting to an environment where the automatic buying support is no longer absorbing every dip.
This thesis is aligned with data from CryptoQuant, which noted that while Bitcoin’s price remained stable for most of the year, peaking near $125,000 in October, the growth in demand has fallen below its trend line since early October.
This situation suggests that the market has drawn forward much of this cycle’s buying power into a condensed phase, influenced by the US spot ETF debut and post-election positioning, rather than indicative of a widespread and sustainable demand increase.
This aligns with metrics from Alphractal, which indicate a decline in market interest.
According to Alphractal, search interest in Bitcoin has decreased, Wikipedia page views have fallen, and social media engagement has returned to levels typically observed during bear markets.
This trend fits a recognizable pattern: retail investors typically pursue rising prices and withdraw when an asset becomes stagnant.
Meanwhile, Alphractal has also reported the most significant selling pressure seen since 2022, indicative of an environment marked by a lack of new buyers and active distribution from existing holders.
Such episodes can signify a bottoming process, but experiences from 2022 have demonstrated they can also lead to prolonged periods of lateral trading before a clear trend resumes.
Is the Bitcoin halving thesis dead?
The ongoing selling pressure, occurring well into the timeframe when the 2024 halving was expected to generate “upward-only” momentum, has prompted a reevaluation of the market’s underlying mechanics.
CryptoQuant observed:
“The current downturn reinforces that Bitcoin’s cyclical behavior is primarily influenced by expansions and contractions in demand growth, rather than the halving event or past price trends. When demand growth peaks and begins to decline, bear markets typically follow, unaffected by supply-side factors.”
In light of this, two contrasting outlooks for 2026 have emerged, dividing the market’s leading strategists into opposing groups: one focused on liquidity and the other on timing.
Julien Bittel, Head of Macro Research at Global Macro Investor, contended that the 4-year cycle was never solely about the halving.
In communication with clients, Bittel dismantled the crypto-centric perspective, arguing that Bitcoin’s rhythm has always been a derivative of the “public debt refinancing cycle.”
He believes the ongoing “bear season” is not indicative of the asset’s failure, but rather signifies a delay in the macro cycle, suggesting the cycle appears disrupted only because the debt maturity wall was extended post-COVID.
Bittel wrote:
“In our view, the 4-year cycle is now officially broken due to the increased weighted average maturity of the debt term structure.”
If accurate, this ongoing lateral grind may just be a temporary halt before the Federal Reserve and Treasury are compelled to inject liquidity to address debt obligations, potentially prolonging the cycle into 2026.
Conversely, Jurrien Timmer, Director of Global Macro at Fidelity, presents a more pessimistic timeline, dictated by the passage of time.
He stated:
“My concern is that Bitcoin may have concluded another 4-year halving cycle phase, both in price and duration.”
Comparatively analyzing past bull markets, Timmer observes that the October peak aligns with the historical pattern of a blow-off top.
Unlike Bittel’s liquidity-focused view, Timmer believes there is a fundamental conclusion. He suspects that 2026 could be a “year off” for Bitcoin, indicating support levels between $65,000 and $75,000, a range that strikingly corresponds with the current demand vacuum apparent on-chain.
What must change to conclude the bear market?
From the above, it can be inferred that Bitcoin is in a true bear season, and whether the market is awaiting Bittel’s liquidity boost or navigating Timmer’s time-based capitulation, the immediate reality is that the marginal demand has diminished.
For this current phase to conclude, Bitcoin does not require a new narrative; it needs fundamental healing. Analysts highlight four specific shifts that would indicate a credible exit from bear territory:
- ETF Flows Must Stabilize: Spot ETFs moving from net selling back to consistent net buying is essential to counter the distribution identified by Alphractal.
- Demand Growth Must Reclaim Trend: CryptoQuant’s demand metrics need to show fresh incremental buying as opposed to the existing redistribution visible on-chain.
- Funding Rates Need to Recover: A sustained rebound in perpetual funding rates would suggest that traders are once again prepared to invest in long positions, a sign of bull markets currently missing.
- Price Must Reclaim Structure: Bitcoin regaining and maintaining its position above the 365-day moving average would be the most clear confirmation that the market is shifting back towards accumulation.
Until these indicators signal a positive shift, Bitcoin will remain ensnared in the complexities of a maturing market.
