Bitcoin demand growth has slowed sharply since October 2025, raising concerns that the market has entered another bearish phase.
According to analysts at CryptoQuant, the slowdown reflects a broader shift in investor behavior following multiple demand surges earlier in the cycle.
CryptoQuant analysts said Bitcoin demand unfolded in three distinct waves during the current market cycle.
The first wave emerged in January 2024 following the launch of US-listed Bitcoin exchange-traded funds.
The second wave followed the outcome of the 2024 US presidential election.
The third wave was driven by what analysts described as a Bitcoin treasury company bubble.
Demand Growth Falls Below Trend
CryptoQuant warned that demand growth has now dropped below its long-term trend.
“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.”
The decline has been particularly visible in the final quarter of 2025.
Apparent Bitcoin demand fell during the period, signaling weaker accumulation across the market.
Institutional participation has also shown signs of contraction.
CryptoQuant noted that Bitcoin held in ETFs declined by approximately 24,000 BTC in the fourth quarter of 2025.
This behavior marked a sharp contrast to the aggressive accumulation seen during the same period in 2024.
Derivatives and Technical Signals Turn Bearish
Additional indicators from derivatives markets are reinforcing the bearish narrative.
Funding rates for perpetual futures have dropped to their lowest levels since December 2023.
Lower funding rates suggest reduced appetite for leveraged long positions among traders.
Technical analysis has also deteriorated.
Bitcoin has broken below its 365-day moving average, a level widely viewed as a critical long-term support.
The cryptocurrency continues to trade well under that threshold, which currently sits near $98,172.
CryptoQuant analysts said this breakdown further supports the view that Bitcoin has entered a bear market phase.
Hope for 2026 Amid Persistent Market Fear
Despite the bearish indicators, not all analysts share a pessimistic long-term outlook.
Some continue to forecast stronger Bitcoin prices in 2026, citing potential interest rate cuts and renewed demand.
Lower interest rates are typically seen as favorable for risk assets, including cryptocurrencies.
However, broader sentiment remains subdued.
According to the crypto Fear and Greed Index, overall market sentiment is firmly in fear territory.
Expectations for near-term monetary easing also remain limited.
Only 22.1% of investors expect the Federal Open Market Committee to cut rates at its January meeting.
Political pressure has added another layer of uncertainty.
US President Donald Trump attempted to pressure Federal Reserve Chair Jerome Powell to lower interest rates during 2025.
Powell’s term is set to expire in May 2026, and potential successors are reportedly being reviewed.
Market participants are watching closely for signs that policy shifts could alter Bitcoin’s trajectory in the years ahead.
