Jakarta, Pintu News – As of December 22, Bitcoin (BTC) has maintained its position in the $88,000-$90,000 range. However, the market dynamics suggest that this stability may be more fragile than it appears. Factors such as increased volatility, dwindling liquidity, and declining demand raise alarms that the crypto market may be transitioning from the late phase of a bull market to the early phases of a bear market, especially as we prepare for January 2026.
Several on-chain and market structure indicators are beginning to reflect this potential shift. Although no single metric definitively indicates the start of a bear market, the convergence of multiple signals often points toward increased downside risks and weakening price support levels.
Bitcoin’s Demand Growth Appears to Be Slowing Down
The demand for Bitcoin is a crucial factor that reflects the new buying pressure relative to its available supply. Recent analyses indicate that after several waves of demand growth earlier in 2025, the momentum appears to be waning.
Read also: The Crypto Market Turns Green — Analyst Ali Martinez Highlights 3 Altcoins Poised to Shine
Despite Bitcoin prices remaining high throughout most of 2025, demand trends have not been able to achieve new highs. This discrepancy suggests that the price strength might be increasingly driven by momentum and the influence of leverage, rather than authentic buying activity in the spot market.
Historically, a plateau or decline in demand growth while prices stay elevated typically indicates a shift from an accumulation phase to a distribution phase, often marking the onset of a bear market or an extended period of consolidation.
US Spot Bitcoin ETF Inflows Begin to Lose Momentum
Spot Bitcoin ETFs in the United States have been a significant driver of structural demand in the current market cycle. The inflows into these ETFs saw consistent growth through 2024 but began to stagnate or decline in the last quarter of 2025.
This decline in ETF inflows is particularly noteworthy because such funds typically reflect long-term capital movements rather than short-term trading behaviors.
When demand from ETFs slows while prices hold steady, it suggests that large institutional buyers may be pulling back. The decreased institutional appetite makes Bitcoin more susceptible to volatility driven by the derivatives market and speculative trading.
“Dolphin” Wallets Start to Reduce Exposure
Wallets containing between 100 to 1,000 BTC, often referred to as “dolphins”, are generally seen as indicators of experienced investors or financial institutions. Recent data has shown a sharp decline in the ownership of Bitcoin by this group over the past year. A similar trend was observed before earlier market downturns in late 2021 and early 2022.
This pattern does not imply panic selling; rather, it indicates a calculated risk reduction by seasoned holders. Historically speaking, when this demographic begins distributing their assets at high prices, it reflects expectations of diminishing returns or prolonged consolidation ahead.
Funding Rate at Exchanges Starts to Decline
The funding rate is a crucial metric, dictating the fees traders incur to maintain leveraged positions. Recent trends indicate a noticeable decrease in Bitcoin funding rates on major exchanges, signaling dwindling demand for leveraged positions despite relatively high prices.
Read also: “Altcoin Season Isn’t Over” – Why is 2026 Worth the Spotlight?
In bullish markets, significant price rallies are backed by rising funding rates and strong demand for long positions. Conversely, a decline in the funding rate often signals weakening trader confidence, leading to reduced willingness to hold onto long positions. Such conditions can precipitate volatile price movements or significant trend reversals.
Bitcoin Breaks Below 365-Day Moving Average
The 365-day moving average serves as a long-term trend indicator, historically distinguishing between bull and bear markets. At present, Bitcoin is trading below this critical threshold for the first time since early 2022.
While previous macro-driven declines in 2024 and early 2025 tested this average, they failed to establish a sustained break below it. Current patterns indicate that the sustained trading below the 365-day average points to a shift in long-term momentum, heightening the likelihood that any future rallies may face stronger resistance.
How Low Can Bitcoin Go If a Bear Market Occurs?
If the current signals persist, it may be helpful to look at historical data—not as a definitive forecast, but as a guideline for potential price trajectories. Bitcoin’s realized price, estimated at around $56,000, represents the average buying price of all BTC holders. Historically, bear markets typically see Bitcoin bottom out around or slightly below this level.
While this does not ensure that Bitcoin will inevitably drop to $56,000, it does indicate that this range has historically been a zone where long-term buyers tend to re-enter the market.
Read also: Signs of Recovery Appear, 3 Altcoins Ready to End Distribution Phase and Rise?
The potential outcomes range widely between the current price and the realized price, including the possibility of prolonged stable movement rather than an abrupt decline.
What This Means for Current Market Conditions
As of December 22, Bitcoin continues to trade within a narrow range characterized by low liquidity and high sensitivity to leveraged movements. Retail participation appears cautious, and institutional fund flows are slowing. Altcoins are particularly vulnerable, being heavily reliant on retail demand and quickly affected by liquidity fluctuations.
These five indicators collectively suggest that the crypto market may be entering a late-cycle distribution phase, with an increased risk of a bear market potentially emerging as early as 2026 if demand fails to rebound. The trend is weakening rather than breaking, but the margin for error is becoming increasingly tight.
Follow us on Google News for the latest crypto news, covering various projects and blockchain technology. Dive deeper into the fundamentals by engaging with Pintu Academy and staying updated on market activities, including Bitcoin prices, XRP prices, Dogecoin, and other crypto assets through Pintu Market.
Experience seamless and secure crypto trading by downloading the Pintu crypto app via Google Play Store or App Store. Explore advanced trading solutions on the web, including sophisticated charting tools, diverse order types, and comprehensive portfolio tracking—all available on Pintu Pro.
*Disclaimer
This content aims to enrich readers’ information. Pintu collects information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Engaging in crypto trading activities involves high risk and volatility; always conduct your own research and use capital you can afford to lose. The responsibility for all activities related to buying and selling Bitcoin and other crypto assets rests with the reader.
Reference:
