Bitcoin is holding above $88,000–$90,000 as of December 22, however the market construction beneath the worth seems to be more and more fragile. Latest volatility, thinning liquidity, and fading demand have raised issues that crypto could also be transitioning from a late bull part into an early bear market heading into January 2026.
A number of on-chain and market-structure indicators now level in the identical route. None of those alerts confirms a full bear market on their very own. Collectively, nonetheless, they recommend rising draw back danger and weakening assist.
Bitcoin’s Obvious Demand Progress Is Rolling Over
Bitcoin’s apparent demand growth tracks how a lot new shopping for strain exists relative to accessible provide.
The most recent knowledge exhibits demand progress slowing after a number of waves earlier within the cycle. Whereas Bitcoin worth remained elevated by means of a lot of 2025, demand did not make new highs.
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This divergence signifies that worth energy relied extra on momentum and leverage than on recent spot shopping for.
Traditionally, when demand progress flattens or declines whereas worth stays excessive, markets shift from accumulation into distribution. This typically marks the early levels of a bear market or lengthy consolidation.
US Spot Bitcoin ETF Inflows Are Dropping Momentum
US spot Bitcoin ETFs have been the strongest supply of structural demand on this cycle.
In 2024, ETF inflows accelerated steadily into the year-end. In distinction, This autumn 2025 exhibits inflows flattening and, in some durations, declining.
This shift is vital as a result of ETFs symbolize long-term capital quite than short-term buying and selling.
When ETF demand slows whereas worth stays excessive, it suggests giant patrons are stepping again. With out sustained institutional inflows, Bitcoin turns into extra susceptible to volatility pushed by derivatives and speculative positioning.
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Dolphin Wallets Are Decreasing Publicity
Wallets holding 100 to 1,000 BTC, also known as “dolphins,” are usually related to subtle buyers and funds.
The most recent knowledge exhibits a sharp decline in dolphin holdings on a one-year basis. Comparable habits appeared in late 2021 and early 2022, forward of deeper market drawdowns.
This doesn’t sign panic promoting.
As an alternative, it factors to danger discount by skilled holders. Traditionally, when this cohort distributes whereas worth stays elevated, it displays expectations of decrease returns or extended consolidation forward.
Funding Charges Are Trending Decrease Throughout Exchanges
Funding charges measure the associated fee merchants pay to carry leveraged positions.
Throughout main exchanges, Bitcoin funding charges have entered a transparent downward development. This means waning demand for leverage, whilst worth stays comparatively excessive.
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In bull markets, robust rallies are supported by rising funding and protracted lengthy demand.
In distinction, falling funding charges recommend merchants are much less assured and fewer keen to pay to remain lengthy. This surroundings typically precedes uneven worth motion or broader development reversals.
Bitcoin Broke Under the 365-Day Shifting Common
The 365-day transferring common is a long-term development indicator that historically separates bull markets from bear markets.
Bitcoin has now crossed beneath this stage for the primary sustained interval since early 2022. Earlier macro-driven sell-offs in 2024 and early 2025 examined this stage however failed to shut beneath it.
A sustained break beneath the 365-day common doesn’t assure a crash. Nonetheless, it alerts a shift in long-term momentum and will increase the chance that rallies will face stronger resistance.
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How Low May Bitcoin Go If a Bear Market Develops?
If these alerts proceed to align, historic knowledge affords a reference level quite than a prediction.
Bitcoin’s realized worth, at the moment close to $56,000, represents the typical price foundation of all holders. In prior bear markets, Bitcoin typically bottomed close to or barely beneath this stage.
That doesn’t imply Bitcoin should fall to $56,000. It does recommend that, in a full bear scenario, long-term patrons traditionally step in nearer to that zone.
Between present ranges and realized worth lies a variety of potential outcomes, together with extended sideways motion quite than a pointy decline.
What This Means for the Market Proper Now
As of December 22, Bitcoin stays range-bound with skinny liquidity and excessive sensitivity to leverage-driven strikes. Retail participation seems cautious, whereas institutional flows have slowed.
Altcoins stay extra uncovered than Bitcoin. They rely extra closely on retail demand and endure extra shortly when liquidity thins.
Taken collectively, these 5 charts recommend crypto could also be coming into a late-cycle distribution part, with rising danger of a bear market rising in early 2026 if demand doesn’t get well.
The development is weakening, not damaged past restore. However the margin for error is shrinking.
