Bitcoin on-chain data just confirmed a “demand vacuum” that threatens to drag prices down to this uncomfortable range

Bitcoin’s 2025 was billed as the year of the “supercycle,” powered by record institutional access and a friendlier policy backdrop out of Washington.

However, it is ending very differently.

Into December, the world’s largest digital asset is not pricing in a new paradigm so much as grinding through a performance problem. The rally has faded, spot prices are rolling over, and retail participation has thinned out just as the narrative support has given way to the arithmetic of a correction.

As a result, on-chain data now point to what analysts describe as a “bear season,” driven by a structural shortfall in demand for Bitcoin at current levels.

The bear market

The 2025 bull narrative started to unravel not with a crash, but with the recognition that this year’s highs were flimsier than they looked.

Bitwise CEO Hunter Horsley has told investors he sees this year as a bear market in disguise, arguing that Bitcoin has been in “bear season” since the early months of 2025, even as prices pushed to records.

According to him:

“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.”

Notably, in the fourth quarter of 2025, US spot Bitcoin ETFs shifted from net accumulation to net redemptions, with aggregate holdings falling by roughly 24,000 BTC.

Key marginal buyers, such as Bitcoin treasury companies, have also slowed or paused purchases.

So, with that flow receding, the market is trading more on its underlying demand profile, and price is adjusting to a world where the easy, mechanical bid is no longer there to absorb every dip.

The thesis aligns perfectly with CryptoQuant’s data. The firm noted that while Bitcoin’s price stayed firm through much of the year and peaked near $125,000 in October, demand growth slipped below its trend line from early October.

Considering this, it pointed out that the break was evidence that the market pulled forward most of this cycle’s buying power into a compressed phase driven by the US spot ETF launch and post-election positioning rather than a broad, durable expansion in demand.

This is corroborated by Alphractal’s metrics, which suggest the attention side of the market has already rolled over.

According to Alphractal, search interest for Bitcoin has fallen, Wikipedia page views are lower, and social media activity has dropped back to levels typically associated with bear markets.

That backdrop fits a familiar pattern: retail investors tend to chase rising prices and retreat when an asset starts to feel like a grind.

At the same time, Alphractal has flagged the strongest bout of selling pressure since 2022, pointing to an environment defined not just by a lack of incremental buyers but by active distribution from existing holders.

Episodes like that can precede a bottoming process, but the 2022 experience also showed they can give way to long periods of sideways trading before any clear trend resumes.

Is the Bitcoin halving thesis dead?

The persistence of this selling pressure, occurring deep in the window where the 2024 halving was supposed to deliver “up-only” momentum, has forced a fundamental rethink of the market’s engine.

CryptoQuant noted:

“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.”

Considering this, two conflicting roadmaps for 2026 have emerged, splitting the market’s top strategists into opposing camps: those watching liquidity, and those watching time.

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

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

According to him, the current “bear season” isn’t a failure of the asset, but a delay in the macro cycle. He argues the cycle appears broken only because the debt maturity wall was pushed out post-COVID.

Bittel wrote:

“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 correct, the current sideways grind is a temporary pause before the Federal Reserve and Treasury are forced to inject liquidity to service debt, potentially extending the cycle well into 2026.

However, Jurrien Timmer, Director of Global Macro at Fidelity, sees a darker timeline governed by the exhaustion of time.

He stated:

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

Visually lining up past bull markets, Timmer notes that the October high fits the historical profile of a blow-off top.

Unlike Bittel, who sees a liquidity delay, Timmer sees a structural end. He senses 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 visible on-chain.

What has to change to end the bear market?

From the foregoing, one can deduce that Bitcoin is effectively in a bear season, and whether the market is waiting for Bittel’s liquidity or suffering through Timmer’s time-capitulation, the immediate reality is that the marginal bid has failed.

So, for this regime to end, Bitcoin does not need a new narrative; it needs structural repair. Analysts point to four specific shifts that would signal a credible exit from bear territory:

• ETF Flows Must Stabilize: Spot ETFs shifting from net selling back to steady net buying is non-negotiable to absorb the distribution flagged by Alphractal.
• Demand Growth Must Reclaim Trend: CryptoQuant’s demand indicators need to signal fresh incremental buying rather than the redistribution currently visible on-chain.
• Funding Rates Need to Recover: A sustained recovery in perpetual funding rates would show that traders are again willing to pay to hold long exposure—a hallmark of bull regimes currently absent.
• Price Must Reclaim Structure: Bitcoin reclaiming and holding above its 365-day moving average would be the market’s most legible confirmation that the regime is shifting back toward accumulation.

Until those signals flash green, Bitcoin will remain caught in the crossfire of a maturing market.

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