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Bitcoin may already be two months into a bear market, according to on-chain and technical indicators tracked by CryptoQuant. Despite expectations that 2026 would mark a renewed growth phase for Bitcoin, new data suggests the market may be entering a prolonged cooling period instead.
CryptoQuant’s head of research, Julio Moreno, says multiple indicators used in the firm’s Bull Score Index turned bearish in early November and have yet to recover. This shift raises questions about Bitcoin’s long-term cycle and whether investors should prepare for deeper downside in the year ahead.
Key Metric Turns Bearish
One of the strongest signals pointing to a bear market is Bitcoin’s move below its one-year moving average, a technical indicator widely used to identify long-term trends.
“For me, the last confirmation is the price going below its one-year moving average,” Moreno said during an episode of the Milk Road show. “That’s the technical indicator that confirms this.”
The one-year moving average represents Bitcoin’s average price over the past 12 months and often acts as a dividing line between bull and bear phases. When Bitcoin trades below this level for an extended period, it historically signals sustained weakness rather than short-term volatility.
Bull Score Index Breakdown
CryptoQuant’s Bull Score Index measures overall market conditions on a scale from 0 to 100, using metrics such as network activity, investor profitability, liquidity, and Bitcoin demand.
According to Moreno, most components of the index shifted into bearish territory late last year and have not meaningfully improved. This suggests that Bitcoin’s recent price action may not be a temporary pullback but part of a broader downtrend.
Bitcoin started 2025 at around $93,000 and surged to a cycle high of approximately $126,080 in October. However, it ended the year lower than where it began, marking a rare post-halving underperformance, based on data from CoinGecko.
Bitcoin Bottom Could Be Lower
If Bitcoin is indeed in a bear market, Moreno believes prices could fall significantly further before finding a bottom. Based on Bitcoin’s realized price and historical bear market behavior, he predicts a potential bottom between $56,000 and $60,000 in 2026.
Bitcoin is currently trading near $88,500, meaning a drop to $56,000 would represent a roughly 55% drawdown from the all-time high.
Historically, realized price — the average price at which all circulating Bitcoin was purchased — has acted as a reliable support level during prolonged bear markets.
“In previous bear markets, the price comes down toward the realized price,” Moreno explained. “It deviates strongly during bull markets, but during bear markets, that level becomes a base expectation for a price bottom.”
Drawdown Less Severe Than Past
While a 55% decline may sound dramatic, Moreno argues it would actually be milder than previous Bitcoin bear markets. In earlier cycles, Bitcoin suffered drawdowns of 70% to 80% from peak to trough.
“If you want to see it positively, the drawdown this time is not as extreme as we’ve seen before,” he said. “This would be relatively moderate compared to historical bear markets.”
This suggests Bitcoin’s volatility may be decreasing over time as the asset matures and attracts a broader base of long-term investors.
No Major Crypto Collapses
Another factor supporting a more stable bear market is the absence of major crypto industry failures so far. During the 2022 downturn, the collapse of Terra, Celsius, and FTX severely damaged market confidence and accelerated selling pressure.
This time, no comparable high-profile collapses have occurred, helping to reduce panic-driven liquidations. The crypto ecosystem is also more regulated, with stronger infrastructure and improved risk management across exchanges and custodians.
Institutional Demand Changes Market
Moreno also highlighted the role of institutional investors and spot Bitcoin ETFs, which have changed market dynamics significantly compared to previous cycles.
“Structurally, we now have more institutional buyers and ETFs that don’t sell,” he said. “There’s also periodic buying that didn’t exist in earlier bear markets.”
Unlike retail traders, institutional investors often accumulate Bitcoin gradually and are less likely to sell during short-term downturns. This steady demand could help limit extreme downside and shorten recovery periods once sentiment improves.
What This Means for 2026
If Bitcoin continues trading below its one-year moving average, the bear market narrative may strengthen in the coming months. This would challenge widespread assumptions that 2026 is guaranteed to be a strong growth year following the 2024 halving.
However, Moreno’s analysis also suggests that Bitcoin’s long-term structure is becoming more resilient, with reduced volatility, stronger holders, and more consistent demand.
For investors, the key takeaway is that while downside risk remains, this bear market may be less chaotic and more orderly than previous cycles — potentially offering strategic accumulation opportunities for long-term holders.