Prominent analyst Anthony Pompliano and on-chain analytics firm CryptoQuant have both issued assessments pointing to Bitcoin entering a bear market phase, driven by a reversal in institutional demand and tightening liquidity conditions.
Anthony Pompliano, in a recent analysis, addressed Bitcoin's sharp 40% decline from its record high of $126,000 to around $75,000. He argued that while significant, this pullback may not be as severe as the 80% crashes of the past. Pompliano attributes this to Bitcoin's maturation as an asset, noting that its volatility has halved. He suggests that the presence of Wall Street, through ETFs and options markets, is helping to curb extreme price swings, leading to more "tamed" movements.
Pompliano offered a unique perspective on the catalyst for the decline, stating the market may now be fearing deflation rather than inflation. He posits that if investors believe high inflation is no longer a future threat, demand for Bitcoin as an "inflation hedge" could wane. He also downplayed concerns over a recent drop in Bitcoin's hash rate, explaining it was due to North American miners temporarily shutting down to sell power back to the grid during cold weather, an event with no lasting negative price impact.
Separately, CryptoQuant's latest weekly report presents a data-driven case for a bear market regime. The firm's Bull Score Index, which signaled a strong bullish environment at the October peak near $126,000, has since flipped bearish and fallen to zero. The report highlights a critical reversal in institutional demand, particularly through U.S. spot Bitcoin ETFs. While ETFs were net buyers of roughly 46,000 BTC at this point in 2025, they have become net sellers in 2026, offloading around 10,600 BTC—a demand gap of approximately 56,000 BTC contributing to persistent selling pressure.
CryptoQuant further notes that U.S. investor participation remains weak, with the Coinbase Premium staying negative since mid-October, indicating a lack of strong American buying typically seen in bull markets. Liquidity conditions are also tightening, with USDT's market cap growth turning negative by $133 million, marking the first contraction since October 2023. The report states that one-year apparent spot demand growth has collapsed by 93%, from 1.1 million BTC to just 77,000 BTC.
Technically, the situation appears precarious. Bitcoin has broken below its 365-day moving average for the first time since March 2022. In the 83 days since that breakdown, BTC has fallen 23%, a sharper decline than in the early stages of the 2022 bear market. CryptoQuant warns that with key on-chain support lost, Bitcoin could face further downside toward the $70,000–$60,000 range unless a new catalyst restores demand.
