Bitcoin's extended downtrend below $75,000 has cryptocurrency market participants grappling with a critical question: how long will the bear market persist? According to Julio Moreno, Head of Research at CryptoQuant, the available data suggests a prolonged bottoming process, potentially stretching for months rather than weeks, as several key demand and liquidity indicators continue to signal weakness.
Market Weakness Underscored by Key Indicators
Moreno’s analysis hinges on CryptoQuant’s proprietary "Bull Score Index," a composite metric evaluating on-chain valuation, liquidity conditions, market data, and technical trends. Currently residing in the "extremely bearish" territory between zero and ten, the index indicates a significant lack of strength in either market data or broader conditions. This isn't a new development; the index rapidly shifted from a bullish 80 to a bearish 20-30 in early October following a liquidation event, which Moreno interprets as a "momentum failure" that prematurely ended a late-cycle rally. He emphasizes that this index acts as a crucial early-warning system for corrections, rather than a lagging confirmation tool. Further elaborating on the weak market conditions, Moreno highlights the behavior of US spot Bitcoin ETFs, which have transitioned into net sellers since Q4, a trend that continued into early 2026. In January alone, ETFs sold over 10,000 BTC, a stark contrast to the 46,000 BTC purchased during the same period a year prior. This net selling from ETFs, according to Moreno, is fundamentally unsupportive of price recovery. Additionally, the Coinbase Premium, a bellwether for US demand, has remained largely negative since November, historically a sign inconsistent with bull market expansions driven by robust US demand. Stablecoin liquidity, measured by the 60-day change in USDT market cap, also shows stagnation since mid-October, indicating a halt in fresh capital entering the trading ecosystem.
The Path to Recovery: What to Watch For
Looking beyond immediate indicators, Moreno points to CryptoQuant's longer-term Bitcoin demand growth model, which hovers near zero on a year-over-year basis, further explaining the persistent downside as the market struggles to establish a durable base. Leverage positioning, observed through perpetual futures funding rates, also signals a diminishing appetite for long exposure, with the one-year average funding rate trending downwards. Moreno identifies overhead resistance levels around $89,000 and $79,000, based on the "trader on-chain realized price," with intermediate and deeper price targets at $70,000 and $56,000, respectively. Moreno concludes with a pragmatic psychological warning: participants must accept that the market is currently in a bear phase and plan accordingly. He advises against mistaking temporary price rallies for the start of a bull market and warns against attempting to catch a "falling knife," suggesting the market's true bottoming process will likely take time. Based on historical patterns and the early onset of this downturn compared to previous cycles, Moreno projects the "first credible bottoming window" to emerge around Q3 2026. The actual end to this bear market, he stresses, will ultimately depend on a sustained turnaround in demand, positive US flows, and a reversal in the current trajectory of key liquidity indicators.
