Blockchain analytics firm CryptoQuant has issued a report warning that Bitcoin may be transitioning into a prolonged bear market. The report, released on Friday, points to a decisive slowdown in Bitcoin demand growth as the primary signal. Researchers argue that Bitcoin's cyclical behavior is governed more by expansions and contractions in demand growth than by the halving event itself.
The report notes that buyer exhaustion could potentially push Bitcoin's price as low as $56,000, which would represent the sharpest drawdown in a bear market on record. However, it reassures investors that such a severe drop is unlikely. Bitcoin recently traded at just over $87,000, approximately 30% below its all-time high of $126,080 set in October 2024.
CryptoQuant attributes Bitcoin's 2025 price rise to three major spot demand waves: inflows from spot Bitcoin ETFs approved in January 2024, enthusiasm from investors bullish on a pro-crypto U.S. presidency, and purchases by hundreds of public companies establishing digital asset treasuries. The firm concludes that "the bulk of this cycle's incremental demand has already been realized, removing a key pillar of price support."
In contrast, prominent bearish analyst il Capo of Crypto presents a more optimistic near-term outlook. He identifies $90,000 as the crucial level Bitcoin needs to reclaim. If Bitcoin breaks through $90,000, il Capo expects a move to $95,000, followed by a potential surge to $100,000 if it maintains momentum above that level. He notes that Bitcoin has been fluctuating between $84,000 and $90,000 for over a month since hitting a local low of $80,500 on November 21.
The broader cryptocurrency market reflects this cautious equilibrium, with total market capitalization hovering around $2.97 trillion. Market sentiment remains wary despite modest gains, suggesting a consolidation phase rather than a loss of momentum.
