Bitcoin appears to be entering a new downtrend, as indicated by on-chain metrics from CryptoQuant. The analytics firm suggests that the current market weakness is attributed to a significant decrease in demand rather than supply factors such as halvings, which have historically influenced price movements.
According to analysts, the preceding demand-driven rally that propelled Bitcoin over the last two years has likely exhausted itself, leading to the loss of vital support that previously supported higher price levels.
Causes Behind the Demand Decline
Analysts have identified three primary catalysts that contributed to Bitcoin”s last growth phase: the introduction of US spot Bitcoin exchange-traded funds (ETFs), the results of the US presidential election, and the swift adoption of Bitcoin as a treasury reserve by corporations. Collectively, these factors absorbed a substantial portion of the available demand.
However, since early October 2025, on-chain demand growth has fallen below its long-term average. This trend indicates that the market may be moving from an expansion phase to a contraction phase, a pattern often seen at the onset of bearish market conditions.
Potential Price Support Levels
CryptoQuant identifies the $70,000 mark as a crucial support area in the coming months, where buying interest may emerge to stabilize Bitcoin”s price action. Should this level fail to hold, the risk of further declines increases. In more severe bearish scenarios, Bitcoin could approach its realized price around $56,000, a level that historically signifies bear market bottoms. Despite this, CryptoQuant notes that any decline would be relatively mild compared to past downturns.
Julio Moreno, head of research at CryptoQuant, estimates that Bitcoin might reach the $70,000 support within three to six months. A deeper decline towards $56,000 would require ongoing weakness into the latter half of 2026. Analyst Ali Charts also points out intermediate support levels below $83,000, with additional downside thresholds at $79,500, $70,600, and $63,100 in the event of increased selling pressure.
Market Sentiment and Future Outlook
Several indicators bolster the cautious outlook for Bitcoin. US spot Bitcoin ETFs have shifted from aggressive accumulation to net selling, with approximately 24,000 BTC exiting in late 2025. This trend suggests a cooling of institutional demand. Additionally, funding rates for long positions in perpetual futures have dropped to their lowest since late 2023, reflecting a diminished appetite for leveraged buying. Bitcoin has also dipped below its 365-day moving average, a technical indicator that has historically delineated bull and bear markets.
While the current sentiment remains bearish, CryptoQuant does not rule out a potential recovery in 2026. The firm emphasizes that Bitcoin”s market cycles are primarily driven by demand recovery rather than time-based events like halvings. If demand stabilizes and begins to increase once more, a rebound later in 2026 could still be feasible.
Market sentiment is divided; some Wall Street analysts predict that Bitcoin prices could reach six figures in 2026, while others consider $70,000 a realistic downside scenario. This divergence highlights the prevailing uncertainty in the market, yet it also indicates that Bitcoin”s long-term bullish narrative remains intact, despite the likelihood of increased volatility moving forward.
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