Bitcoin on-chain metrics have revealed a “demand vacuum” that could potentially lower prices to this challenging range.

Bitcoin’s 2025 was anticipated as the year of the “supercycle,” fueled by unprecedented institutional engagement and a more favorable regulatory environment from Washington.

However, it is concluding in a markedly different manner.

As December approaches, the leading digital currency is not reflecting a new paradigm but rather grappling with a performance issue. The upward momentum has diminished, spot prices are declining, and retail involvement has decreased just as the narrative support has succumbed to the realities of a correction.

Consequently, on-chain data now indicate what analysts refer to as a “bear season,” driven by a fundamental shortfall in demand for Bitcoin at present levels.

The bear market

The bullish narrative for 2025 began to unravel not due to a crash, but through the realization that this year’s peaks were less robust than they appeared.

Bitwise CEO Hunter Horsley has informed investors that he perceives this year as a bear market in disguise, asserting that Bitcoin has been in “bear season” since the early months of 2025, even as prices reached new highs.

He stated:

“We will look back on 2025 and realize that it's been a bear market since February — masked by the relentless bid from DATs and Bitcoin Treasury Companies.”

Importantly, in the fourth quarter of 2025, US spot Bitcoin ETFs transitioned from net accumulation to net redemptions, with total holdings decreasing by approximately 24,000 BTC.

US Bitcoin ETFs Flows (Source: CryptoQuant)

Key marginal buyers, including Bitcoin treasury companies, have also reduced or halted their purchases.

With that flow diminishing, the market is now trading more in accordance with its underlying demand profile, and prices are adjusting to a scenario where the easy, mechanical bids are no longer present to absorb every decline.

This thesis aligns seamlessly with CryptoQuant’s data. The firm observed that while Bitcoin’s price remained stable for much of the year and peaked near $125,000 in October, demand growth fell below its trend line starting in early October.

Bitcoin Apparent Demand (Source: CryptoQuant)

In light of this, it highlighted that the break was indicative of the market having pulled forward most of this cycle’s purchasing power into a condensed phase driven by the US spot ETF launch and post-election positioning rather than a widespread, sustainable increase in demand.

This is supported by Alphractal’s metrics, which indicate that the attention aspect of the market has already declined.

According to Alphractal, search interest for Bitcoin has decreased, Wikipedia page views are down, and social media engagement has reverted to levels typically seen during bear markets.

Bitcoin Falling Search Interest (Source: Alphractal)

This context fits a familiar trend: retail investors often pursue rising prices and withdraw when an asset begins to feel stagnant.

Simultaneously, Alphractal has noted the most significant selling pressure since 2022, indicating an environment characterized not only by a lack of new buyers but also by active distribution from current holders.

Bitcoin Selling Pressure (Source: Alphractal)

Such episodes can precede a bottoming process, but the experience of 2022 also demonstrated that they can lead to extended periods of sideways trading before any clear trend resumes.

Is the Bitcoin halving thesis dead?

The ongoing selling pressure, occurring well into the timeframe where the 2024 halving was expected to generate “up-only” momentum, has necessitated a fundamental reassessment of the market’s dynamics.

CryptoQuant remarked:

“The current downturn reinforces that Bitcoin’s cyclical behavior is governed primarily by expansions and contractions in demand growth, not by the halving event itself or past price performance. When demand growth peaks and rolls over, bear markets tend to follow regardless of supply-side dynamics.”

In light of this, two opposing roadmaps for 2026 have emerged, dividing the market’s leading strategists into two camps: those focused on liquidity and those focused on time.

Julien Bittel, Head of Macro Research at Global Macro Investor, contended that the 4-year cycle was never centered on the halving.

In a communication to clients, Bittel dismantled the crypto-native perspective, suggesting that Bitcoin’s rhythm has always been a derivative of the “public debt refinancing cycle.”

He posits that the current “bear season” is not a failure of the asset, but rather a delay in the macro cycle. He argues that the cycle appears disrupted only because the debt maturity wall was extended post-COVID.

Bittel stated:

“In our view, the 4-year cycle is now officially broken because the weighted average maturity of the debt term structure has increased.”

If he is accurate, the current sideways movement is merely a temporary pause before the Federal Reserve and Treasury are compelled to inject liquidity to manage debt, potentially prolonging the cycle into 2026.

Conversely, Jurrien Timmer, Director of Global Macro at Fidelity, envisions a more pessimistic timeline governed by the exhaustion of time.

He expressed:

“My concern is that Bitcoin may well have ended another 4-year cycle halving phase, both in price and time.”

By visually aligning past bull markets, Timmer notes that the October peak corresponds with the historical profile of a blow-off top.

Bitcoin Analogs (Source: Fidelity)

Unlike Bittel, who perceives a liquidity delay, Timmer foresees a structural conclusion. He believes that 2026 could be a “year off” for Bitcoin, targeting support levels between $65,000 and $75,000, a range that aligns uncomfortably well with the demand vacuum currently evident on-chain.

What has to change to end the bear market?

From the above, it can be inferred that Bitcoin is effectively in a bear season, and whether the market is anticipating Bittel’s liquidity or enduring Timmer’s time-capitulation, the immediate reality is that the marginal bid has faltered.

Thus, for this phase to conclude, Bitcoin does not require a new narrative; it necessitates structural repair. Analysts identify four specific changes that would indicate a credible exit from bear territory:

• ETF Flows Must Stabilize: Spot ETFs transitioning from net selling back to consistent net buying is essential to absorb the distribution highlighted by Alphractal.
• Demand Growth Must Reclaim Trend: CryptoQuant’s demand indicators need to reflect fresh incremental buying rather than the redistribution currently observed on-chain.
• Funding Rates Need to Recover: A sustained recovery in perpetual funding rates would demonstrate that traders are once again willing to pay to maintain long exposure—a hallmark of bull regimes currently absent.
• Price Must Reclaim Structure: Bitcoin reclaiming and maintaining levels above its 365-day moving average would serve as the market’s clearest confirmation that the regime is shifting back toward accumulation.

Until those indicators turn positive, Bitcoin will remain ensnared in the complexities of a maturing market.

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