The updated data further reinforces this assertion. In Q4/2025, Bitcoin spot ETFs in the U.S. shifted to net selling, reducing total holdings by approximately 24,000 BTC - a notable reversal compared to the same period last year, when these funds acted as a key demand driver. This trend also reflects the increasingly evident caution of institutional capital amid rising volatility.
Not only ETFs, but the group of wallets holding between 100 and 1,000 BTC - including funds and Bitcoin treasury businesses - has also seen slower growth than the long-term trend. This pattern recalls the late 2021 period, when demand began to weaken before the market entered a bear season in 2022.
In the derivatives market, risk appetite is also contracting. The funding rate on perpetual contracts, calculated using a 365-day moving average, has fallen to its lowest level since the end of 2023. According to CryptoQuant, the declining funding rate indicates that investors are becoming increasingly cautious about maintaining long-term buy positions.
Technically, Bitcoin has lost the 365-day moving average - a long-term benchmark often viewed as the boundary between bull and bear markets. Sliding below this threshold makes the short-term outlook less positive, especially as recovery signals remain faint.
CryptoQuant emphasizes that Bitcoin's 4-year cycle does not revolve around the halving event, but is determined by the demand cycle. When demand growth peaks and reverses, bear markets typically follow, regardless of supply-side factors. The current downturn, according to this company, is clear evidence of that rule.