Given the present state of the crypto market, all on-chain metrics point out {that a} bear cycle is underway. Nevertheless, the incoming purple season might not be as extreme as earlier ones, based on an evaluation by CryptoQuant.
The most recent weekly report from the market analysis agency revealed that BTC might report a 55% drawdown from its all-time excessive throughout the bear season. Such a transfer may place the asset’s backside round $56,000, marking the smallest drawdown on report.
BTC May Backside at $56K
Traditionally, bitcoin bear market bottoms have aligned with the realized worth metric. The realized worth is at the moment close to $56,000 and is barely rising. This has led market consultants to consider the incoming bear cycle may very well be shallow. Notably, analysts anticipate BTC to seek out intermediate assist round $70,000.
These predictions come because the bitcoin bull cycle turns bearish amid unfavorable market situations. Demand development has slowed, and derivatives markets are experiencing a weakening threat urge for food. With demand waves driving Bitcoin’s four-year cycles, the present drawdown reinforces the assumption that Bitcoin’s behaviour is ruled by expansions and contractions in demand development.
The market has seen three main demand waves since 2023, pushed by the launch of america spot exchange-traded fund (ETF) market, the U.S. presidential election final result, and the rise of Bitcoin Treasury firms. Nevertheless, the demand development has reversed since early October 2025, suggesting that this cycle has realized the majority of its incremental demand wave.
Sadly, bear seasons have a tendency to start when demand development peaks and rolls over, no matter provide facet dynamics.
The Onset of the Bear Market
Moreover, U.S. spot Bitcoin ETFs have grow to be internet sellers in This fall 2025, sustaining a development that sharply contrasts the sturdy accumulation seen in This fall 2024. By this time final yr, ETF holdings had risen from 293,000 BTC to 496,000 BTC; nonetheless, they’ve declined by 24,000 BTC this yr. Addresses holding 100 to 1,000 BTC are actually echoing the lowered demand recorded on the finish of 2021, simply earlier than the 2022 bear market.
On the derivatives entrance, the 365-day transferring common of perpetual futures funding charges has fallen to its lowest stage in two years. Which means traders are much less keen to take care of lengthy publicity – this sample is usually noticed throughout bear phases.
The submit On-Chain Metrics Recommend Shallow Bitcoin Bear Market with $56K Backside appeared first on CryptoPotato.