Bitcoin in Bear Market: Analysts Warn of Price Drop to $70,000

CryptoQuant Diagnoses Bear Market

Onchain analytics firm CryptoQuant believes that Bitcoin has already entered a bear market ^[1]. In a report published on Friday, the company points to significantly declining demand that has been "below trend since early October 2025" ^[1]. After three strong demand waves since 2023, a "central pillar" for further price increases is now missing ^[1].

CryptoQuant sees the majority of additional demand from the current cycle as already absorbed and warns accordingly of further downside risk ^[1]. Analysts cite the $70,000 area as the first important support level, though a decline to $56,000 is also possible ^[1].

Timeline for Potential Price Losses

CryptoQuant analyst Julio Moreno specified the temporal expectations: A price drop to $70,000 could occur within the next three to six months ^[1]. He described a level of $56,000 as a longer-term scenario for the second half of 2026 ^[1]. According to Moreno's assessment, the current bear market began in mid-November, triggered by the largest liquidation wave in crypto market history on October 10 ^[1].

Weak Signals from ETFs and Institutional Investors

CryptoQuant sees further signs of weakness in US spot Bitcoin ETFs ^[1]. In the fourth quarter of 2025, outflows predominated there, with holdings declining by approximately 24,000 Bitcoin ^[1]. Wallet addresses holding between 100 and 1,000 Bitcoin are also currently growing below the long-term trend—a comparable pattern was already evident before the bear market in 2022 ^[1].

Additionally, risk appetite in the derivatives market is declining ^[1]. Average funding rates for perpetual futures have fallen to their lowest level since December 2023 ^[1]. Bitcoin is also trading below its 365-day moving average, which has historically often marked the boundary between bull and bear markets ^[1].

Current Market Situation Remains Tense

In early Sunday trading, the crypto market appeared stable but characterized by subdued risk appetite ^[2]. Bitcoin traded virtually unchanged from the previous day at around $88,000, representing a decline of ten percent year-to-date ^[2]. Total market capitalization stood just above three trillion dollars ^[2].

Currently at 20 points, the Fear and Greed Index remains in the "extreme fear" range ^[2]. Analysts point to ongoing leverage cleanup, declining demand, and the traditionally thin liquidity during the holiday season, leading to dampened price expectations ^[2].

Liquidity Risk at Year-End

Bitcoin is moving in a narrow range, liquidity is low, and even moderate orders can cause disproportionate price swings ^[2]. The combination of the holiday period and tight chart structure could increase the risk of abrupt movements ^[2]. In parallel, deleveraging in derivatives trading continues: Negative funding rates, declining open interest, and increasing loss realization indicate that the market continues to unwind positions ^[2].

A potential bright spot comes from recent US inflation data for November, which at around 2.7 to 2.8 percent came in significantly below expectations ^[2]. This increases the medium-term probability of further interest rate cuts in 2026—which could provide tailwinds for risk assets like Bitcoin ^[2]. Despite the potentially more favorable macroeconomic environment, however, the short-term market situation remains subdued ^[2].