The narrative surrounding Bitcoin“s anticipated supercycle for 2025 has lost its momentum as the year draws to a close. Initially seen as a transformative year bolstered by increased institutional access and favorable policies from Washington, the reality has proven starkly different. As December approaches, Bitcoin is not reflecting a new market paradigm but rather grappling with significant performance issues. The once-promising rally has faded, spot prices are in decline, and retail investor participation has dwindled. This shift has led analysts to identify what they define as a “bear season,” driven by a noticeable decline in demand for Bitcoin at its current price levels.
The bullish narrative for 2025 began to crumble not due to a sudden crash, but through the realization that this year”s peaks were less robust than they appeared. Hunter Horsley, CEO of Bitwise, has indicated that this year should be viewed as a bear market hiding in plain sight, suggesting that Bitcoin has effectively been in a “bear season” since early 2025, despite reaching record highs. He remarked that future evaluations of 2025 will likely reveal it as a bear market starting from February, obscured by consistent buying from Digital Asset Trusts and Bitcoin treasury companies.
During the fourth quarter of 2025, U.S. spot Bitcoin ETFs transitioned from a phase of net accumulation to net redemptions, resulting in a decrease of approximately 24,000 BTC in total holdings. Key buyers, such as treasury companies, have significantly slowed their purchases, leading the market to rely more on its fundamental demand characteristics. With the previous easy liquidity no longer available to cushion price dips, Bitcoin“s price is adjusting accordingly.
Supporting this analysis, CryptoQuant pointed out that although Bitcoin maintained a relatively stable price earlier in the year, peaking at around $125,000 in October, growth in demand has dropped below its expected trend line since early October. This indicates that much of the buying power for this cycle was concentrated in a short timeframe, influenced by the launch of U.S. spot ETFs and post-election positioning rather than a sustainable increase in demand.
Metrics from Alphractal further reinforce this narrative, showing a decline in search interest for Bitcoin, reduced Wikipedia page views, and a decrease in social media engagement. Such trends are typically associated with bear markets, as retail investors tend to flock to assets that are on the rise and withdraw when the market appears stagnant. Moreover, Alphractal has noted a significant surge in selling pressure not seen since 2022, indicating not only a lack of new buyers but also active distribution from current holders. Historical precedents suggest that while such selling pressure can lead to a bottoming process, it can also result in prolonged periods of sideways trading before a clear trend re-emerges.
As the market grapples with persistent selling pressure, particularly during a critical phase where the 2024 halving was expected to invoke upward momentum, a fundamental reassessment of Bitcoin“s market dynamics is necessary. Two contrasting outlooks for 2026 have emerged, dividing market strategists. Julien Bittel, Head of Macro Research at Global Macro Investor, argues that the four-year cycle is not inherently tied to the halving. He suggests that Bitcoin“s behavior reflects the broader “public debt refinancing cycle,” positing that the current market conditions are more a delay in macroeconomic factors than a failure of the asset itself.
Conversely, Jurrien Timmer, Director of Global Macro at Fidelity, foresees a more troubling scenario. He draws parallels with previous bull markets, suggesting that the October peak is reminiscent of a blow-off top. Unlike Bittel”s liquidity delay perspective, Timmer believes that the current market may face a structural downturn, predicting that 2026 could be a “year off” for Bitcoin, with potential support levels around $65,000 to $75,000, closely aligning with current on-chain demand indications.
To exit the current bear market phase, it is clear that Bitcoin requires more than just a new narrative; it demands structural changes. Analysts have identified four key indicators that would signal a credible transition away from bear territory. Until these indicators are met, Bitcoin is likely to remain in the tumultuous landscape of a maturing market.
