Bitcoin has recently shown a key technical signal—its price has fallen below the 365-day moving average. This moving average has historically been a watershed: staying above it usually indicates a bull market, while breaking below it essentially signals the onset of a bear market.

According to analysis from a well-known on-chain data agency’s research director, Bitcoin is now actually entering a demand exhaustion phase. Looking back at the market trends since 2023, the major buying waves that have driven prices include: funds attracted by the approval of the US spot Bitcoin ETF, sentiment boosts from election speculation, and the bubble created by the "Bitcoin Treasury Company" concept.

The problem is—these driving forces are now waning. Since October 2025, new buy demand has fallen below the long-term trend line, meaning the available buying capacity has basically been exhausted, and no new money is willing to continue absorbing.

What is the most direct manifestation? In the fourth quarter, those once frenzied US spot Bitcoin ETFs have completely reversed course, shifting from big buyers to big sellers, with a net reduction of about 24,000 BTC holdings. Meanwhile, addresses holding between 100 and 1,000 BTC (mainly ETF and institutional funds) are also experiencing a slowdown in growth, well below the historical average.

This weakening demand situation is somewhat similar to the performance before the bear markets of late 2021 and 2022. From on-chain behavior, institutional holdings, to technical indicators, multiple dimensions are signaling the same message: the market is transitioning from a bull phase characterized by rising prices and fewer declines, to a bear phase with more declines and fewer rises.