CryptoQuant detects bear market signals: Bitcoin may drop to the $56,000 bottom

According to the latest research by on-chain data analysis firm CryptoQuant, Bitcoin entered a bear market state in early November 2025. The predicted bottom target for this downward cycle is in the range of $56,000 to $60,000. The firm’s research director Julio Moreno pointed out that the “bullishness score indicator,” which combines technical analysis and on-chain data, has remained negative since November, reflecting a continued decline in bullish momentum. As of the latest market data, Bitcoin’s price hovers around $90,000, about 28% below its all-time high of $126,000, and has fallen a total of 15.26% over the past year.

Observing recent trends, multiple warning signs have emerged, including Bitcoin breaking below its one-year moving average, declining on-chain activity, and shrinking trading volume. The large-scale liquidation event in October further drained market buying power, making rebounds weak. The predicted bottom range of $56,000 aligns closely with the average cost basis (realized price) of holders, which typically indicates the low point in historical bear markets. Once it reaches this area, it would constitute approximately a 55% correction from the October peak. Compared to the 70-80% decline during the 2022 bear market, this adjustment is significantly milder.

Demand-side Turnaround, Not Supply Factors Driving the Downtrend

Moreno emphasized that the primary cause of this decline stems from demand exhaustion rather than traditional supply-side influences (such as halving events). He noted that there were three major demand waves in 2025: the launch of US spot ETFs, the presidential election, and the rise of Bitcoin savings strategy products. However, since early October, demand growth has fallen below historical trend levels, with institutional positions beginning to realize profits and holdings indicators stagnating.

The attitude shift of US spot ETFs is particularly noteworthy. Throughout 2025, ETFs were net buyers, but by the fourth quarter, they turned into net sellers, offloading approximately 24,000 Bitcoins. The weakening purchasing power of Bitcoin savings strategy companies further undermines the foundation for a bull market. These companies have built reserves worth $1.44 billion, preparing for a potential prolonged sideways or downward market.

Precise Timeline: $70,000 Imminent, $56,000 in the Rearview

According to CryptoQuant’s analytical framework, the future downtrend will be divided into two phases. The first phase targets $70,000, which is seen as the most critical support zone. If the market cannot rally in this area to re-energize the bulls, there is a risk of further decline. Moreno revealed that the window for a correction back to the $70,000 region is expected within the next 3 to 6 months.

The second phase involves the predicted bottom range of $56,000. If this extreme scenario materializes, the timing is expected in the second half of 2026. From an overall perspective, this cycle is milder than previous bear markets, but holders should still prepare for potential volatility.

Moreno believes that unless there is a new macro liquidity injection (such as a Federal Reserve rate cut), the market will struggle to quickly reverse the current weakness. The “Bear Market Score Index” has fallen to zero for the first time since 2022, further reinforcing the bearish signal. Additionally, Bitcoin will record its first annual loss since 2022 in 2025, posing a challenge to the rebound prospects in 2026.

Looking ahead, the rebound may depend on the recovery of institutional buying power or improvements in the global liquidity environment. However, CryptoQuant emphasizes that the current market structure resembles the situation before the 2022 major bear market. Investors should prepare for continued volatility and closely monitor the key support levels at $70,000 and $56,000, as well as the potential bottom opportunity forecasted for the second half of 2026.