Bitcoin has entered its most severe bearish period since the current bull market began in January 2023. CryptoQuant, a leading on-chain analytics firm, delivered this stark assessment in its latest weekly report.
Bitcoin now faces a fundamentally different situation compared to earlier corrections in this cycle. Multiple indicators, spanning both technical analysis and demand metrics, have turned sharply negative.
Critical Technical Breakdown Signals Shift
CryptoQuant’s Bull Score Index dropped to 20 out of 100 last week. This reading marks extremely bearish territory. The decline stems from weakening spot demand, negative price momentum, and slowing growth in stablecoin liquidity.
Bitcoin broke below its 365-day moving average, a crucial trend indicator. This breakdown carries special significance. The same level held firm during the 2022 bear market confirmation. Throughout every correction in the current cycle, Bitcoin has maintained support above this moving average to date.
A CryptoQuant analyst emphasized the weight of this development. Bitcoin’s failure to hold this technical level represents a major shift in market structure. The 365-day moving average now sits near $102,600, creating a substantial resistance zone overhead.
Source: X
The cryptocurrency has suffered a 28% drawdown from recent highs. However, support remains intact around the $90,000 to $92,000 range. This support level continues to attract buyers despite mounting bearish pressure.
Treasury Company Demand Collapses
The demand landscape has transformed dramatically. Bitcoin Treasury companies served as major buyers earlier this year. These firms accumulated substantial Bitcoin holdings as core business strategies. That buying power has evaporated.
Many Treasury companies saw their market capitalizations decline by between 70% and 90%. Their stock values now trade below the worth of their Bitcoin reserves. This pricing dynamic eliminates their ability to issue new shares for capital raises. Without fresh capital, these companies cannot purchase additional Bitcoin.
Strategy, formerly the market’s largest consistent buyer, sharply reduced its accumulation rate. The company faced similar pressures as its stock market valuation approached the value of its Bitcoin holdings.
The CryptoQuant analyst noted that Strategy cannot support the entire market alone. Treasury companies have effectively vanished as a demand source. This removal of significant buying pressure leaves Bitcoin vulnerable.
Historical Bitcoin cycles have followed four-year patterns. The 2014 to 2017 cycle and the 2018 to 2021 cycle both adhered to this timeframe. Many analysts credit Bitcoin’s halving events for creating these rhythmic supply shocks.
The current cycle began in 2022 and is expected to conclude in 2025. Some market observers suggest the cycle might extend into 2026. They point to institutional participation and the involvement of exchange-traded funds as factors that could alter traditional patterns.
CryptoQuant challenges this assumption. The firm argues that institutional demand can disappear just as quickly as retail interest. The Treasury company’s collapse provides recent evidence of this vulnerability.
At the time of writing, Bitcoin trades at around $89,376, suggesting a 4.17% decline in the last 24 hours.
