Bitcoin's Bear Market Reality: What CryptoQuant's Analysis Reveals About 2026

Bitcoin’s recent price action has triggered a critical reassessment among major crypto research institutions. CryptoQuant’s head of research, Julio Moreno, has validated what many investors feared—Bitcoin transitioned into a bear market starting in November. The confirmation came as multiple metrics across CryptoQuant’s bull score index, which tracks network activity, investor profitability, asset demand, and liquidity conditions, all shifted negative during early November.

The numbers tell a stark story. Bitcoin peaked at $126.08K in October before retreating, currently trading around $96.88K according to latest data. This represents a divergence from the 2025 start price of approximately $93,000. More significantly, the asset has broken below its 365-day moving average—a technical threshold not consistently breached since early 2022. This breakdown of a key support level validates the bear market thesis that goes against many bullish forecasts that had positioned 2026 as a growth year.

The Severity Question: How Deep Will Bitcoin Fall?

Moreno’s analysis projects the bear market bottom could reach the $56,000 to $60,000 range, anchoring this forecast on Bitcoin’s realized price and historical cycle patterns. Such a decline would represent approximately 55% from the all-time high—a substantial pullback, yet notably less severe than previous bear cycles that witnessed 70% to 80% drawdowns.

This reduced severity might signal market maturation. Historical bear markets emerged from fundamental failures: the 2022 cycle followed Terra’s collapse, Celsius Network’s implosion, and FTX’s spectacular bankruptcy. The current environment lacks comparable high-profile sector failures, suggesting a more stable foundation for price support.

Institutional Demand Patterns Shifted Dramatically

The institutional narrative changed abruptly in late 2025. US spot Bitcoin ETFs recorded $3.4 billion in net outflows during November alone, with major funds like BlackRock’s IBIT experiencing $2.34 billion in redemptions. This capital flight contradicts the structural thesis that institutional accumulation creates demand floors.

Yet the broader institutional landscape presents nuance. Bank of America and Vanguard integrated Bitcoin ETFs into wealth management services during late 2025, suggesting institutional adoption transcends simple price cycles. These vehicles typically maintain positions rather than panic-selling, creating technical support layers that differ from retail-dominated cycles.

Market Structure Evolution vs. Technical Weakness

The cryptocurrency market architecture has fundamentally shifted from previous bear periods. Institutional players now accumulate consistently, and the ecosystem contains fewer systemic vulnerabilities. Perpetual futures funding rates hit their lowest point since December 2023, however, indicating weakened risk appetite in derivatives markets. On-chain analysis reveals overhead supply concentrated between $93,000 and $120,000, restricting recovery attempts.

These technical factors—combined with the confirmed break below long-term moving averages—support Moreno’s bear market classification despite improved market structure. Bitcoin faces the paradox of institutional support competing against technical weakness and capital outflows, creating an asymmetric risk environment that tests investor conviction throughout 2026.