According to the latest analysis from on-chain data firm CryptoQuant, the Bitcoin market may have entered the early stages of a new bear cycle, as several key indicators simultaneously show a significant weakening of upward momentum. The report, published on December 20th, noted that demand for Bitcoin in the spot market is slowing down faster than expected, raising concerns that the main pillar supporting the price throughout the recent bull cycle is gradually disappearing.
Since 2023, Bitcoin has witnessed three major waves of spot demand, stemming from the launch of Bitcoin spot ETFs in the US, the results of the US presidential election, and the influx of businesses incorporating Bitcoin into their treasury strategies. Notably, following the election at the end of 2024, Donald Trump won and is now the US president, creating expectations of a more favorable policy environment for digital assets. However, CryptoQuant reports that since the beginning of October 2025, the growth rate of Bitcoin demand has fallen below the long-term trend, suggesting that much of the new demand from this cycle may have already been absorbed. Without sufficiently strong new capital inflows, maintaining high price levels becomes more difficult.
Not only the spot market, but signals from the Derivative market also reinforce the view that investor risk appetite is declining. The funding rate for perpetual Futures Contract , based on a 365-day moving Medium , has fallen to its lowest level since December 2023. Historically, a decline in funding rates often reflects caution in holding long positions, a common characteristic of bear markets rather than periods of strong growth.
Technically, Bitcoin's price structure is also sending negative signals as the cryptocurrency has broken below the 365-day moving Medium , which has been XEM a crucial boundary between bull and bear markets in many previous cycles. When the price is below this long-term Medium , the probability of a corrective trend continuing is usually higher.
