Bitcoin’s steep price decline and weakening demand indicators are fueling debate over whether the world’s largest cryptocurrency has entered a Bitcoin bear market, with some analysts pointing to structural signals while others warn it could be a prolonged correction.
Bitcoin’s price has slid sharply from its record highs of over $126,000 in late 2025 to levels near $63,000 in early February 2026, a roughly 50 percent drop that some market participants interpret as more than a short pause in an advance cycle. Analysts at the digital-asset data platform CryptoQuant said that a sustained slump in demand growth suggests the cycle’s incremental demand may have already been realized, undermining a key pillar of support for prices. “Demand growth has fallen below trend since early October 2025, indicating that the bulk of this cycle’s incremental demand has already been realized,” CryptoQuant analysts said.
Markets Show Structural Weakness
Bitcoin’s fall amounts to more than the typical correction defined by a 10 percent to 20 percent drop. Historically a drop of 20 percent or more can mark the start of a bear market in broad markets. Data from crypto price history shows Bitcoin declined roughly 20 percent or more from the October 2025 high, a threshold often used to define potential bear conditions.
At the same time, dedicated digital-asset analysts noted that multiple on-chain metrics support the view that bearish conditions are developing. In a recent discussion with BeInCrypto, Julio Moreno, head of research at CryptoQuant, said a range of indicators point toward early bear market conditions that could extend into 2026. “Basically every on-chain metric or market metric confirms that we are in a bear market in the early stages,” Moreno said.
ETF Flows Weaken, Demand Declines
Institutional interest, long touted as a driver of Bitcoin’s rally, has shown signs of weakening. Bitcoin-linked exchange-traded funds experienced sharp recent declines, with major vehicles sinking more than 13 percent in a single session and significant outflows recorded early in February, according to MarketWatch data.
Observers noted that outflows and cooling interest in ETFs reflect broader investor caution. In the United States and abroad, spot Bitcoin ETF flows that had provided consistent capital inflows earlier in 2025 have cooled, and analysts have described these turns as stress points for longer-term demand patterns.
Institutional capital flows into ETFs are widely regarded as a proxy for large-scale investor interest. An academic analysis of ETF influence on Bitcoin’s integration with traditional markets found that approval of spot Bitcoin ETFs in 2024 significantly changed investor access and correlations with broader equities, highlighting the importance of institutional demand.
Contrasting Views Remain
Despite weakening price action and demand, some analysts see room for resilience outside a full bearish collapse. Morningstar noted that institutional holders remained relatively steady during earlier volatility, and that not all declines necessarily mark long-term retreats.
Bitcoin’s trading range could stabilize, with long-term support from ETF inflows and broader participation even amid slower momentum.
