On-chain Data Reveals: Why Bitcoin Is Trapped in a Demand Dilemma

CryptoQuant Research Director Julio Moreno recently issued a warning that Bitcoin is experiencing clear bear market characteristics, and the fundamental reason behind this is a severe lack of market demand.

From Past Demand Waves to Recession

Looking back at Bitcoin’s rally since 2023, it has gone through three major spot demand-driven phases, namely the approval of US spot ETFs, the US presidential election results, and corporate treasury buying surges. These demand waves once drove BTC prices to new highs, but since early October 2025, the overall incremental demand in the market has been significantly below the long-term historical average. This demand exhaustion indicates that the main drivers that once pushed prices higher are gradually fading away.

ETF Data Reversal, Holdings Under Pressure

The most direct evidence comes from US spot Bitcoin ETF data— in Q4 2025, these fund products shifted from net inflows to net outflows, with total holdings decreasing by approximately 24,000 BTC. This starkly contrasts with the strong accumulation seen in the same period last year, enough to show that institutional sentiment has shifted.

Deep analysis of on-chain addresses reveals that addresses holding 100-1000 BTC (mainly representing large funds and corporate treasuries) are also experiencing a noticeable slowdown in growth, even falling below long-term trends. This phenomenon is eerily similar to the deteriorating demand before the bear market at the end of 2021, and such historical similarities often signal a market turning point.

Technical Confirmation of Downward Signals

On the technical side, Bitcoin has broken below the 365-day moving average—a key long-term support level. Historically, this moving average often marks the boundary between bull and bear markets—breaking through it indicates a shift in the medium-term trend. Currently, BTC is oscillating around $93.18K, down 10.89% from last year, and the technical weakness is evident.

Market Implications

When demand waves recede, historical data begins to flash warning signals, and technical support levels are being broken one after another. All these signals point to a conclusion: the market is re-pricing, and investors should remain cautious about the medium-term outlook.