Since October 2025, the demand for Bitcoin (BTC) has noticeably decreased, suggesting that Bitcoin has entered another bear market phase, as per analysts at the crypto market analysis platform CryptoQuant.
BTC investor demand surged in three distinct phases during the ongoing market cycle, with the initial phase occurring in January 2024, according to CryptoQuant analysts said.
The first phase was triggered by the introduction of Bitcoin exchange-traded funds (ETFs) in the US, the second phase was spurred by the 2024 US presidential election results, and the third phase emerged from a BTC treasury company bubble. As stated by CryptoQuant:
“Demand growth has fallen below trend since early October 2025. This shows that the majority of this cycle’s extra demand has been fulfilled, weakening a crucial price support element.”
Institutional demand has also tapered off, with Bitcoin holdings in ETFs decreasing by approximately 24,000 BTC in Q4 2025, a stark contrast to the accumulation trends observed in Q4 2024, CryptoQuant noted.
Funding rates, which are the fees charged to perpetual futures traders for maintaining their positions, have plummeted to their lowest levels since December 2023, indicating a further shift toward a bear market for BTC.
Another factor contributing to the pessimistic outlook is that Bitcoin’s price structure has dropped below the 365-day moving average, a vital and dynamic support benchmark for any asset.
Related: Bitcoin rallies thwarted by fading Fed rate cut odds, softening US macro
While some analysts remain optimistic for a better 2026, market fear prevails
Some analysts still predict higher BTC prices in 2026, fueled by rising demand and declining interest rates. Lower interest rates typically serve as beneficial catalysts for crypto values and other high-risk assets.
Nonetheless, the overall sentiment in the crypto market remains firmly within “fear” territory, as indicated by CoinMarketCap’s Crypto Fear and Greed Index.
Only 22.1% of investors anticipate the Federal Open Market Committee (FOMC) to reduce interest rates in its upcoming January meeting, according to the Chicago Mercantile Exchange (CME) Group’s FedWatch tool.
US President Donald Trump attempted to influence Federal Reserve Chairman Jerome Powell to reduce interest rates in 2025 by threatening to dismiss Powell.
Powell’s term is set to conclude in May 2026, and Trump is contemplating potential replacements who are expected to lower rates.
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