Bitcoin's recent price rebound is being characterized by analysts as a classic bear market rally, with multiple technical, on-chain, and historical indicators suggesting the downturn is far from over. Despite a roughly 20% surge since November 21, 2025, bringing BTC near its crucial 365-day moving average (MA) of $101,000, underlying demand remains weak and key bearish signals are emerging.
Market research firm CryptoQuant notes that while Bitcoin demand conditions have improved slightly, they are still fundamentally weak. Spot demand is still contracting, with apparent demand metrics showing a net decrease of 67,000 BTC over the last 30 days, remaining negative since November 28, 2025. U.S. institutional activity provides little comfort; spot Bitcoin ETFs have purchased only 3,800 BTC year-to-date, a level comparable to the same period last year and below thresholds associated with bull-market recoveries. These ETFs merely halted net selling during the rally, after offloading as much as 54,000 BTC over a 30-day period in November.
Technical analysis reveals several alarming patterns. A bearish "Kumo twist" has appeared on Bitcoin's weekly Ichimoku Cloud chart, a formation that historically preceded corrective phases with drawdowns of 67% to 70%. Furthermore, BTC continues to trade below its 365-day MA, a key resistance level that acted as a regime boundary during the 2022 bear market. Analysis of the Gaussian Channel on a five-day chart shows Bitcoin has lost the channel's median level, an event that has historically marked the start of more aggressive bear market phases.
Historical context adds to the concern. Compared to previous cycle peaks—which saw drawdowns of 75.9% (2013), 81.2% (2017), and ~74% (2021)—the current pullback of just over 30% is modest, suggesting the downturn may still be in its early stages. The Bull-Bear Market Cycle Indicator, which signaled the start of bearish conditions in October 2025, has not yet moved into an extreme bear phase, implying lower prices are likely.
On-chain data compounds the bearish outlook. Exchange inflows have spiked, with a seven-day average reaching 39,000 BTC. This activity is dominated by mid- to large-sized holders (10–1,000 BTC bands), indicating strategic distribution rather than accumulation. Increased flows to exchanges are historically associated with escalating selling pressure.
Analysts caution that the rally should be viewed as a "dead cat bounce" within a broader bear market structure, with Bitcoin potentially heading toward the $103,000 zone for a retest or liquidity hunt before facing renewed downward movement.
