Bitcoin is set to end the fourth quarter of 2025 on a weak note, raising concerns that the market correction phase is not over yet. The flagship cryptocurrency peaked at around $126,200 in early October and has since fallen into a sustained slump, losing 30% of its market value at the time of writing.
Since that peak, Bitcoin has struggled to decisively regain the $92,000 level, with repeated rejections at the highs highlighting waning demand and increasing caution among investors. In particular, cryptocurrency analyst GugaOnChain has warned that the downside pressure could extend into early 2026 due to poor quarterly results, as both on-chain data and sentiment indicators point to continued bearish conditions.
Capacity indicators suggest market stress will continue into 2026
According to GugaOnChain in a Friday QuickTake post, BTC:Quarterly Price Performance Indicator reported a negative 4th quarter performance of -19.15%, which is the basis for this bearish outlook. Additionally, several key capitulation indicators suggest that the market is not ready for any form of bullish resurgence.
For example, the output expenditure return (SOPR) is currently below 1 at 0.99, indicating that investors are selling Bitcoin at a loss, which is a common feature of bear market phases. Similarly, the MVRV for short-term holders (MVRV-STH) remains below 1 at 0.87, indicating that short-term holders are currently in deep water and are more likely to capitulate.
Further reinforcing this narrative, GugaOnChain points out that the percentage of Bitcoin supply losses is rising and is currently at 35.66%, forcing more BTC holders into significant loss positions, thereby reducing confidence and increasing market stress. In addition to these indicators, the Fear and Greed Index falls into the “extreme fear” zone at 20, suggesting widespread pessimism and risk aversion among participants.
Bear market confirmation indicator
Besides the capitulation indicators, GugaOnChain highlights additional confirming indicators that suggest downside risks remain dominant in the short term. One of these indicators, market capitalization growth, as measured by the gap ratio between the 30-day moving average and the 365-day moving average, is firmly negative at -11.65%, indicating that the market's growth is contracting rather than expanding.
Institutional trends also reflect the erosion of trust. The US Bitcoin Spot ETF recorded net outflows of $825.7 million from December 18, 2025 to December 24, 2025, highlighting waning institutional investor appetite as the fourth-quarter price war continues. Meanwhile, Coinbase's premium gap remained at -66.11, indicating weaker demand from US-based investors compared to offshore markets.
After comprehensively evaluating these several indicators, GugaOnChain concludes that the crypto market is likely to remain in a bearish phase for the next two to three months. Therefore, investors should expect further correction in the first quarter of 2026 until capitulation signals subside and demand stabilizes.
At the time of writing, Bitcoin is trading at $87,436, reflecting a slight market loss of 0.42% from the previous day.
Featured images from Shutterstock, charts from Tradingview
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