Bitcoin’s 2025 was touted as a “supercycle” year, with record institutional access and a more friendly policy backdrop coming out of Washington.
However, the ending is very different.
In December, the world's largest digital assets are grappling with performance issues rather than weaving in new paradigms. The bull market has faded, spot prices have reversed, and retail participation has waned just as narrative support has given way to the arithmetic of corrections.
As a result, on-chain data currently points to what analysts are describing as a “bear season” due to a structural lack of demand for Bitcoin at current levels.
bear market
The bullish story of 2025 began to unravel not with the crash, but with the realization that this year's highs were weaker than they appeared.
Bitwise CEO Hunter Horsley told investors he sees this year as a feigned bear market, arguing that Bitcoin is in a “bear season” even though its price has climbed to record levels since early 2025.
According to him:
“If we look back to 2025, we will see that it has been a bear market since February, masked by persistent bidding by DAT and Bitcoin treasury companies.”
Notably, in the fourth quarter of 2025, the US Spot Bitcoin ETF went from net accumulation to net redemption, reducing its total holdings by approximately 24,000 BTC.
Major buyers of Bitcoin, including government bond companies, have also slowed or paused purchases.
So, as that trend recedes, markets increasingly trade based on their underlying demand profile, and prices are adapting to a world where there are no longer cheap, mechanical bids to absorb any declines.
This paper is fully consistent with CryptoQuant data. The company noted that Bitcoin prices have remained strong throughout the year, reaching nearly $125,000 in October, but demand growth has fallen below the trend line since early October.
Considering this, he pointed to the break as evidence that the market has taken most of its purchasing power this cycle into a compression phase driven by US spot ETF launches and post-election positioning, rather than broad-based sustained demand expansion.
This is corroborated by Alphactal's indicators, which suggest that the hot side of the market has already reversed.
According to Alpharactal, search interest in Bitcoin has declined, Wikipedia page views have declined, and social media activity has declined to levels typically associated with bear markets.
The background fits a familiar pattern. Individual investors tend to chase rising prices and exit when an asset starts to feel tough.
At the same time, Alpha Lactal is showing the strongest signs of selling pressure since 2022, pointing to an environment defined by a lack of additional buyers as well as active distributions from existing holders.
While such episodes can precede a bottoming process, the 2022 experience also showed that a clear trend can give way to an extended period of sideways trading before resuming.
Is the Bitcoin halving theory dead?
This persistence of selling pressure, occurring deep within the period when the 2024 halving was supposed to provide “upward-only” momentum, has forced a fundamental rethinking of the market engine.
CryptoQuant says:
“The current economic downturn confirms that Bitcoin's cyclical behavior is primarily driven by expansions and contractions in demand growth, rather than the halving itself or past price performance. When demand growth peaks and reverses, bear markets tend to persist, regardless of supply-side dynamics.”
Given this, two competing roadmaps to 2026 have emerged, with top market strategists divided into opposing camps: those focused on liquidity and those focused on time.
Julian Bittel, head of macro research at Global Macro Investor, argued that the four-year cycle is by no means a halving.
In a note to clients, Bittel dismantled the crypto-native view, arguing that Bitcoin’s rhythm has always been derived from “public debt refinancing cycles.”
He said the current “bear period” is not an asset failure, but a lag in the macro cycle. He argues that the cycle appears to be broken only because the debt maturity barrier has been pushed aside post-COVID-19.
Bittel writes:
“In our view, the four-year cycle has officially ended as the weighted average maturity of the debt term structure has increased.”
If he's right, the current plateau is a temporary respite before the Federal Reserve and Treasury are forced to inject liquidity to service debt, potentially extending the cycle into 2026.
But Julian Timmer, director of global macro at Fidelity, sees a bleak timeline dominated by time depletion.
He said:
“My concern is that Bitcoin may have passed another four-year halving cycle, both price-wise and time-wise.”
Visually lining up past bull markets, Timmer points out that October's high matches the historical profile of a soaring ceiling.
Unlike Bittel, who sees a liquidity lag, Timmer sees a structural end. He feels that 2026 could be a “rest year” for Bitcoin, targeting support levels between $65,000 and $75,000, a range that aligns uncomfortably well with the demand vacuum currently seen on-chain.
What must change to end the bear market?
From the above, we can deduce that Bitcoin is effectively entering a bearish phase, and whether the market is waiting for Bittel liquidity or suffering from Timmer time limits, the immediate reality is that the marginal bid has failed.
Therefore, Bitcoin does not need a new story to end this regime. Structural repairs are required. Analysts point to four specific changes that could signal a firm exit from bearish territory.
- ETF flows need to stabilize: The spot ETF's transition from net short to stable net long is non-negotiable in order to absorb the distributions flagged by Al-Ractal.
- Increase in demand should return to trend: CryptoQuant’s demand metrics should show new incremental purchases rather than the redistribution currently seen on-chain.
- Funding rates need to be restored: A sustained recovery in perpetual financing rates would indicate that traders are once again willing to pay to hold long-term exposure, a characteristic of a bullish regime that currently does not exist.
- Prices should reuse the structure: Bitcoin regaining and above its 365-day moving average would be the market’s clearest confirmation that the regime is moving back toward accumulation.
Until these lights flash green, Bitcoin will continue to be caught in the crossfire of mature markets.
