Bitcoin could decline to $56,000 during the current bear market, representing a 55% pullback from its all-time high, according to Julio Moreno, head of research at CryptoQuant. The analyst's forecast challenges widespread expectations of a 2026 bull market, citing weakening demand indicators and historical price patterns.
What Happened: Demand Contraction
Moreno confirmed the bear market began in early November when multiple metrics entered bearish territory and Bitcoin's price fell below its one-year moving average of $102,000. The realized price—the average purchase price across all Bitcoin holders—sits at $56,000, which has historically served as a reliable bottom indicator in previous cycles.
Bitcoin demand growth fell below trend levels for the first time since 2024, triggering a bear market confirmation through CryptoQuant's bull score index. The one-year moving average, currently at $102,000, now functions as resistance rather than support after Bitcoin broke below it in November.
Treasury companies that purchased Bitcoin in 2024 stopped acquisitions, removing a significant demand source from the market.
Most new corporate Bitcoin buyers made one or two purchases before halting activity, failing to provide sustained price support.
Year-over-year demand growth slowed dramatically from its 2023-2024 expansion phase. The metric now tracks below historical trend lines, indicating capital contraction rather than adoption waves that typically fuel bull markets.
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Why It Matters: Missing Catalysts
Bitcoin faces competition from traditional macro assets including gold, the Magnificent Seven tech stocks, and quantum computing equities, which outperformed cryptocurrencies since October.
The Federal Reserve's quantitative easing won't match 2020-2021 liquidity levels, eliminating a key growth driver from previous cycles.
"A lot of people are saying the four-year cycle is dead, but I don't see the cycles like that," Moreno said. "It's the demand waves. That tends to slow down and the demand growth becomes negative."
Institutional buyers like sovereign wealth funds and government entities purchase Bitcoin infrequently, providing one-time price impacts rather than consistent market support.
The analyst identified cash as the preferred asset for 2026, projecting Ethereum to trade between $2,000 and $3,500 throughout the year. Bitcoin's high is expected to reach $102,000, matching its current technical resistance level.
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