Bitcoin’s three-year rally may be over, with signs pointing to the leading cryptocurrency entering a prolonged bear market.
That’s according to blockchain data firm CryptoQuant, whose researchers said in a Friday report that investors should be prepared for the end of Bitcoin’s four-year cycle.
Buyer exhaustion means the biggest digital coin could still drop as low as $56,000, the report noted. But it reassured investors that such a move was unlikely — if Bitcoin does drop that low, it would be the sharpest drawdown in a bear market on record.
“Bitcoin demand growth has decisively slowed, signaling a transition into a bear market,” the report said.
“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.”
Bitcoin cycles have typically been marked by how the coin behaves after its quadrennial halving event — when every four years rewards earned by miners are slashed, cutting the supply of new coins in half.
Bitcoin historically has shot up following its halving events. After its first halving, it rose by more than 7,700% in a year.
After its second halving event in 2016, it rose from $663 to $2,500 in the space of a year.
The coin rose over 90% from its most recent halving in April 2024 to its October record.
but experts have repeatedly said this year and last that the typical four-year cycle has changed due to new kinds of buyers entering the market.
CryptoQuant researchers said that Bitcoin’s 2025 price rise came from three spot demand waves: spot exchange-traded fund buyers, those excited by a pro-crypto president in the White House, and digital asset treasury funders.
The spot Bitcoin ETFs approved in January 2024 took in record flows from investors previously wary of entering the crypto space.
And money flooded into Bitcoin from those who thought President Donald Trump — who campaigned on a ticket to help the industry — was bullish for the digital asset sphere.
On top of that, hundreds of public companies this year became digital asset treasuries, buying cryptocurrencies with spare or borrowed cash to help sluggish stock prices.
But now, all these buyers have been exhausted, stunting Bitcoin’s growth in turn, the report said.
“This indicates that the bulk of this cycle’s incremental demand has already been realized, removing a key pillar of price support,” it noted.
Bitcoin broke a new record of $126,080 per coin in October. But it got battered by fears over a renewed US-China trade war later that month, which wiped out a record $19 billion in open interest on crypto exchanges.
The coin has struggled to regain ground since, and was recently priced at a little over $87,000 per coin — 30% below its all-time high.
