CryptoQuant Warns of a Bear Market Formation and Risk of Bitcoin Falling to $56,000
Date: 2025-12-22 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Analytics firm CryptoQuant stated that the cryptocurrency market has entered a bear market, and Bitcoin could face a significant price decline. This conclusion is based on a sharp slowdown in demand, which, according to experts, indicates the depletion of key sources of capital inflow. This is stated in a new report cited by The Block.
CryptoQuant noted that between 2023 and 2025, Bitcoin demand growth was supported by several factors. These included the launch of spot ETFs in the US, increased attention from institutional investors, and political events that fueled interest in crypto assets. However, starting in October 2025, the dynamics changed: demand indicators fell below the medium-term trend, which became a worrying signal for the market.
According to analysts, this slowdown indicates that the main flow of new capital that previously supported growth has virtually dried up. The market is increasingly attracting fewer new participants, and existing investors are showing caution. The decline in activity from spot ETFs and companies using Bitcoin as a reserve asset has been particularly noticeable.
According to CryptoQuant's calculations, the Bitcoin price could decline to approximately $70,000 in the medium term. This scenario is considered the most likely in the next few months. However, analysts do not rule out a deeper correction—as low as $56,000. This is the current level of Bitcoin's realized price, which in past cycles often coincided with the end of bearish phases. The company emphasized that even such a decline would be less severe than previous cycles and would amount to approximately 55% of the most recent all-time high.
CryptoQuant's Head of Research, Julio Moreno, noted that a decline to $70,000 could occur within three to six months. A more pessimistic scenario of a decline to $56,000 is considered longer-term and, according to him, may not materialize until the second half of 2026.
Moreno also noted that the onset of the bear market could be dated to mid-November, shortly after the massive wave of liquidations recorded on October 10. Since then, demand for Bitcoin has been consistently declining. In the fourth quarter of 2025, according to the report, US spot ETFs reduced their holdings by 24,000 BTC, a sharp contrast to the active accumulation a year earlier.
Analysts saw additional signs of market weakness in on-chain data. Activity among addresses with balances between 100 and 1,000 BTC, typically funds and companies, remains below historical levels and resembles the situation in late 2021, which preceded the market decline in 2022.
Negative signals are also coming from the derivatives market. Perpetual futures funding rates have fallen to their lowest levels since December 2023, indicating a decline in interest in long positions—a characteristic feature of bearish periods, CryptoQuant emphasized.
