Bitcoin sees retail investors rush to sell after profit levels collapse, “Now is the most dangerous time”
Bitcoin sees retail investors rush to sell after profit levels collapse, “Now is the most dangerous time”
Concerns have emerged that Bitcoin (BTC) has entered the early stages of a full-fledged bear market as demand growth hits record lows and on-chain indicators continue to deteriorate.
According to cryptocurrency-focused media outlet CryptoPotato on February 8 (local time), on-chain data analytics firm CryptoQuant reported that Bitcoin’s demand growth rate has fallen below its trend line, signaling a shift into bearish market conditions. The slowdown has been attributed primarily to the fading impact of U.S. spot ETF launches, election-related tailwinds, and corporate Bitcoin accumulation trends that had driven the market since 2023. Demand growth has notably weakened since early October of last year.
CryptoQuant noted that current on-chain indicators are showing patterns similar to the early stages of past bear markets. Bitcoin holders have begun recording net unrealized losses for the first time since October 2023, while annual net realized profits have plunged to 2.5 million BTC. This level is comparable to conditions at the onset of the 2022 bear market, suggesting that upward price momentum has effectively reached its limits.
Analysts see the next major downside support for Bitcoin around $70,000, warning that prices could slide as low as $56,000 if the downturn persists. Julio Moreno, head of research at CryptoQuant, stated, “If Bitcoin fails to regain momentum, it could correct to around $70,000 within the next few months, and in the most pessimistic scenario, retreat to approximately $56,000 in the second half of 2026.” He added, however, that the current decline represents an adjustment of about 55% from the all-time high, signaling a relatively milder bear market compared with the severe crash of 2022.
Institutional capital flows are also showing troubling signs. U.S. spot Bitcoin ETFs turned to net selling starting in the fourth quarter of 2025, shedding approximately 24,000 BTC in holdings during that period alone. The withdrawal of ETF funds, once a powerful source of buying pressure, has become a key factor intensifying downside risks. Experts emphasize that Bitcoin’s four-year cycle is driven more by demand cycles than by halving events, warning that the current contraction in demand could mark the beginning of a prolonged adjustment.
As Bitcoin’s once-steep rally collides with a demand cliff, the market is shifting into a more defensive phase focused on capital preservation. CryptoQuant’s Bull Score Index falling to zero for the first time since January 2022 underscores the prevailing pessimism. Investors are closely watching whether the $70,000 support level breaks as they assess the potential depth and duration of the unfolding bear market.
Disclaimer: This article is provided for investment reference only, and no responsibility is assumed for investment losses incurred based on this information. The content should be interpreted solely for informational purposes.
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