Bitcoin’s apparent demand is shrinking sharply, prompting analysts to warn that the world’s largest cryptocurrency may be entering a new bear market as multiple on-chain, market, and macro indicators turn decisively negative. Persistent exchange-traded fund (ETF) outflows, falling network activity, and a breakdown below key technical support levels have combined to undermine investor confidence after months of relative stability.
ETF outflows add sustained selling pressure
One of the clearest signals cited by analysts is the reversal in spot Bitcoin ETF flows. After acting as a major source of demand earlier in the year, ETFs have recently recorded consistent net outflows, effectively turning a former tailwind into a structural headwind. These outflows translate directly into selling pressure in the underlying market, amplifying downside moves during periods of weak liquidity.
Market strategists note that ETF-driven demand had masked softer organic buying interest. As those flows fade, price action is increasingly reflecting underlying spot market weakness rather than institutional accumulation.
On-chain demand indicators contract
Beyond ETFs, on-chain data suggests that Bitcoin’s apparent demand has turned negative. Metrics tracking new capital entering the network show slower growth in active addresses, reduced transaction volumes, and declining realised demand. Long-term holders appear reluctant to add exposure at current levels, while short-term traders have reduced risk amid heightened volatility.
Analysts argue that this contraction is significant because previous bull phases were underpinned by sustained growth in on-chain activity. The absence of that support raises questions about the durability of any near-term rebounds.
Key technical levels fail to hold
From a technical perspective, Bitcoin’s price has slipped below several closely watched support zones, triggering automated selling and reinforcing bearish momentum. The loss of these levels has shifted market structure from consolidation to distribution, according to technical analysts.
Momentum indicators have also rolled over, with rallies being sold into rather than extended. This pattern is increasingly associated with early-stage bear markets rather than temporary corrections within a broader uptrend.
Macro environment weighs on risk appetite
The broader macroeconomic backdrop is adding to pressure on digital assets. Higher-for-longer interest rate expectations, resilient bond yields, and a stronger US dollar have reduced appetite for speculative assets. Bitcoin, which has increasingly traded as a high-beta risk asset, has struggled to decouple from this environment.
While some investors continue to frame Bitcoin as a long-term hedge, near-term flows suggest that capital is prioritising liquidity and yield over volatility.
Sentiment shifts from optimism to caution
Market sentiment has deteriorated alongside price and demand indicators. Funding rates have normalised or turned negative, signalling reduced leverage and growing downside protection. Options markets also reflect increased demand for downside hedges, pointing to expectations of further weakness.
Analysts caution that bear markets are defined not by single events, but by prolonged periods of declining demand and failed recoveries — conditions that are increasingly visible across Bitcoin markets.
Outlook remains fragile
While sharp countertrend rallies remain possible, analysts broadly agree that Bitcoin faces a challenging period ahead unless demand indicators stabilise and key technical levels are reclaimed. Until then, the balance of evidence suggests the market is transitioning into a bearish phase rather than experiencing a short-lived pullback.
For investors, the focus is shifting from momentum to capital preservation, as Bitcoin’s next major directional move appears more likely to be shaped by demand recovery — or the lack of it — than by narrative alone.
Newshub Editorial in Global Markets – 21 December 2025
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