Is the Crypto Bull Cycle Over or Is This Just a Deep Correction? CryptoQuant provides insights

Demand has dried up and BTC has fallen below the 365-day moving average. Could the market already be in bear season, or is this just a deep correction?

While the consensus remains that BTC and the broader crypto market have one more rally to go (possibly in 2026) before the bull cycle ends, technical and fundamental numbers suggest otherwise. The latest weekly magazine report from CryptoQuant has analyzed on-chain and off-chain metrics that indicate the bear market may have begun.

Is the bull cycle over?

According to CryptoQuant, BTC is experiencing a decline of over 35% year to date. The asset has fallen below the 365-day moving average (MA) of $102,000 and key support levels between $90,000 and $92,000. The 365-day MA has acted as the ultimate support level in this cycle, and BTC has never fallen below it during price corrections since the start of this bull phase.

Notably, the MA was one of the last signals confirming the start of the 2022 bear market. Market conditions are already the most bearish they’ve been since this bull cycle began in January 2023, and they could get worse. Also, CryptoQuant’s Bull Score Index has fallen to extremely bearish levels around 20 out of 100.

Need question for new rally

Past corrections in this bull cycle are mainly the result of continued demand from institutions. However, the same cannot be said this time. CryptoQuant analysts said this cycle has likely seen the bulk of the demand surge.

BTC shares of spot Bitcoin exchange-traded funds (ETFs) are down year-over-year, growing at one of the slowest rates since their launch. Bitcoin purchases by government bonds, which have been a major source of demand this year, have all but stopped. This is because their market capitalization has fallen by at least 70% in recent months.

Although the leading Treasury company, Strategy, is still acquiring BTC, purchases have fallen significantly, from 171,000 BTC a year ago to 9,600 BTC today. Bitcoin Treasury companies are no longer able to sell more shares to raise capital and buy more BTC, and this has significantly affected demand.

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Regardless of the state of the market, CryptoQuant believes a strong catalyst can stoke demand enough to rise again next year. But the question remains: which catalyst will be strong enough to accelerate BTC demand in the coming months?