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Bitcoin remains above $88,000 to $90,000 as of December 22, but the market structure below the price seems more fragile. Recent volatility, low liquidity, and declining demand have raised concerns that cryptocurrencies could move from a late bull phase to a bear market before January 2026 approaches.
Several indicators on the chain and the structure of the market are now pointing in the same direction. None of these signals confirm a full-fledged bear market by itself. However, together they indicate high downside risks and weak support.
The apparent growth in demand for Bitcoin is starting to pick up again
Apparent growth in demand for Bitcoin Track how much new buying pressure exists compared to the available supply.
The latest data show demand growth slowing down after several waves earlier in the cycle. While the price of Bitcoin has been high for most of 2025, the demand has not reached new highs.
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This divergence indicates that price strength was based more on momentum and gearing rather than fresh spot buying.
Historically, when demand growth stagnates or declines while price remains high, Markets are moving from accumulation to distribution. This often represents the early stages of a bear market or long consolidation.
US Bitcoin Spot Fund Flow Loses Momentum
US Bitcoin Express Funds have been the strongest source of structural demand this cycle.
In 2024, ETF flows will accelerate continuously until the end of the year. On the contrary, it seems Fourth quarter of 2025 The flows flattened, and in some periods, decreased.
This change is important because ETFs represent long-term capital, not short-term trading.
When demand for ETFs slows While the price remains high, this indicates that the big buyers are pulling back. Without sustained institutional flows, Bitcoin becomes more vulnerable to volatility caused by derivatives and speculative positions.
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Dolphin wallets reduce exposure
Portfolios containing 100 to 1000 bitcoins, often called “dolphins”, are typically associated with advanced investors and funds.
Show the latest data A sharp decline in the possessions of dolphins on a one-year basis. A similar behavior appeared at the end of 2021 and at the beginning of 2022, before a deeper decline in the market.
This does not mean panic selling.
Rather, it refers to Risk reduction From experienced recipients. Historically, when the payout is distributed while the price remains high, it reflects the expectation of lower yields or that the consolidation will last longer.
Financing rates are trending lower in the exchanges
Funding rates measure the cost traders pay to hold leveraged positions.
Across major exchanges, Bitcoin funding rates have entered a clear downward trend. This indicates a decrease in the demand for financial leverage, even when the price remains relatively high.
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In emerging markets, strong rallies support increased funding and sustained long-term demand.
In contrast, lower financing rates indicate that traders are less confident and less willing to pay to stay in the long run. This atmosphere is often preceded by choppy price action or trend reversals in general.
Bitcoin has fallen below its 365-day moving average
365 day moving average It is a long-term trend indicator It historically separates bull markets from bear markets.
Bitcoin has now crossed below this level for the first sustained period since the beginning of 2022. Previous macro-driven sell-offs in 2024 and early 2025 tested this level, but did not close below.
A sustained outage below the 365 day average does not guarantee a crash. However, this indicates a shift in long-term momentum and increases the likelihood that associations will face stronger resistance.
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How far could Bitcoin fall if a bear market develops?
If these signals continue to agree, the historical data provides a point of reference rather than a prediction.
It represents the realized price of Bitcoin, which currently stands at around $56,000the average cost base for all holders. In previous bear markets, Bitcoin has often traded near or slightly below that level.
This does not mean that Bitcoin must fall to $56,000. This indicates that In a scenario of complete declineLong-term buyers are historically close to that area.
Between the current levels and the price achieved there is a wide range of possible outcomes, including a prolonged sideways movement rather than a sharp decline.
What does this mean for the market now?
As of December 22nd, Bitcoin remains range bound with low liquidity and high sensitivity to leverage movements. Retail participation appears cautious, while institutional flows have slowed.
Altcoins are always more vulnerable than Bitcoin. They depend more on demand in the retail sector and suffer more quickly when liquidity weakens.
When taken together, these five charts indicate that cryptocurrencies can enter Distribution phase at the end of the cyclewith the growing risk of an emerging bear market in early 2026 if demand does not recover.
The trend is weakened, not irreparably broken. But the margin of error has decreased.
