Bitcoin’s year 2025 was heralded as the year of the “supercycle,” made possible by record institutional access and a friendlier policy backdrop from Washington.
However, it ends very differently.
Until December, the world’s largest digital asset isn’t so much touting a new paradigm as grappling with a performance problem. The rally is gone, spot prices are tipping 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 points to what analysts describe as a “bear season,” driven by a structural shortage of demand for Bitcoin at current levels.
The bear market
The 2025 bull story began to unravel not with a crash, but with the recognition that this year’s highs were weaker than they seemed.
Bitwise CEO Hunter Horsley has done just that told investors, he sees this year as a bear market in disguise, arguing that Bitcoin has been in a “bear season” since the early months of 2025, even as prices soared to record levels.
According to him:
“We will look back at 2025 and realize that it has been a bear market since February – masked by the ruthless 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 total holdings falling by approximately 24,000 BTC.
Major marginal buyers, such as Bitcoin Treasury companies, have also slowed or paused their purchases.
So as that flow diminishes, the market trades more on the underlying demand profile, and the price adjusts to a world where the easy, mechanical bid is no longer there to catch every dip.
The thesis fits perfectly with the data from CryptoQuant. The company noted that while Bitcoin’s price remained stable for most of the year, peaking at nearly $125,000 in October, demand growth fell below the trend line from early October.
Taking this into account, it indicated that the break was evidence that the market was pulling most of this cycle’s purchasing power into a compressed phase, driven by the US spot ETF launch and post-election positioning, rather than a broad, sustained expansion in demand.
This is confirmed by Alphractal’s statistics, which indicate that the attention side of the market has already turned around.
According to Alphractal, search interest in Bitcoin has dropped, page views on Wikipedia are down, and social media activity has fallen to levels typically associated with bear markets.
That background fits a familiar pattern: Retail investors tend to chase rising prices and pull back when an asset starts to feel like a rut.
At the same time, Alphractal has marked the strongest selling pressure since 2022, indicating an environment defined not only by a lack of incremental buyers, but also by active distribution by existing holders.
Such episodes can precede a bottoming process, but the experience of 2022 has also shown that they can give way to long periods of sideways trading before a clear trend resumes.
Is Bitcoin’s Halving Thesis Dead?
The persistence of this selling pressure, which occurred deep into the time frame in which the 2024 halving should generate “up-only” momentum, has forced a fundamental rethink of the engine of the market.
CryptoQuant noted:
“The current downturn reinforces that Bitcoin’s cyclical behavior is driven primarily by expansions and contractions of demand growth, rather than the halving itself or past price performance. When demand growth peaks and reverses, bear markets tend to follow, regardless of supply-side dynamics.”
Considering this, two conflicting roadmaps for 2026 have emerged, dividing the market’s top strategists into opposing camps: those who watch liquidity, and those who watch the time.
Julien Bittel, head of Macro Research at Global Macro Investor, argued that the four-year cycle was never about halving.
In a letter to customers, Bittel dismantled the crypto-native view, stating that Bitcoin’s rhythm has always been a derivative of the “sovereign debt refinancing cycle.”
According to him, the current “bear season” is not an asset bust, but a slowdown in the macro cycle. He argues that the cycle only seems to have been broken because the wall of debt was pushed down after the COVID-19 crisis.
Bittel wrote:
“In our view, the four-year cycle has now officially been broken because the weighted average duration of the debt term structure has increased.”
If he’s right, the current sideways rut is a temporary lull before the Federal Reserve and Treasury are forced to inject liquidity to pay down debt, potentially extending the cycle well into 2026.
However, Jurrien Timmer, Director of Global Macro at Fidelity, sees a darker timeline defined by the exhaustion of time.
He declared:
“My concern is that Bitcoin may have ended another four-year cycle halving phase, both in terms of price and time.”
Timmer looks visually at past bull markets and notes that the October high fits the historical profile of a blow-off top.
Unlike Bittel, which sees a liquidity slowdown, Timmer sees a structural end. He believes that 2026 could be a “free year” for Bitcoin, with support levels between $65,000 and $75,000, a range that aligns uncomfortably well with the demand vacuum currently visible on the chain.
What Needs to Change to End the Bear Market?
From the foregoing, one can deduce that Bitcoin is effectively in bear season, and whether the market waits for Bittel’s liquidity or suffers from Timmer’s time capitulation, the immediate reality is that the marginal bid has failed.
To end this regime, Bitcoin does not need a new story; it needs structural repair. Analysts point to four specific shifts that could signal a credible exit from bear territory:
- ETF flows need to stabilize: Spot ETFs that switch from net selling back to stable net buying are non-negotiable to capture the distribution highlighted by Alphractal.
- Demand growth should restore the trend: CryptoQuant’s demand indicators should signal new incremental purchases rather than the redistribution currently visible in the chain.
- Financing rates should recover: A sustained recovery in perpetual funding rates would demonstrate that traders are once again willing to pay for holding long exposure – a hallmark of bull regimes that is currently lacking.
- Price must regain structure: Bitcoin regaining and holding above its 365-day moving average would be the market’s most legible confirmation that the regime is returning to accumulation.
Until these signals flash green, Bitcoin will remain caught in the crossfire of a maturing market.