CryptoQuant On-Chain Data Alert: Bitcoin Price Faces Correction, USD Valuation May Bottom Out at 56,000

Data analysis firm CryptoQuant’s latest research indicates that Bitcoin is experiencing a significant market correction cycle. According to the company’s comprehensive technical and on-chain indicator, the “Bull Market Score” indicator, Bitcoin has undergone a structural shift since November 2025. Under the dual pressures of slowing demand and declining on-chain activity, it is forecasted that the price in USD could potentially dip into the $56,000 to $60,000 range in the future. Research Director Julio Moreno stated that this would mark a relatively mild correction, but market signals should not be ignored.

Bull Market Score Turns Negative, Multiple On-Chain Signals Show Weakness

CryptoQuant’s analysis shows that since November, the company’s flagship “Bull Market Score” indicator has turned fully negative and has failed to recover, marking the first such occurrence since 2022. Moreno pointed out that several key triggers are eroding market momentum: Bitcoin falling below its one-year moving average, a noticeable decline in on-chain network activity, and shrinking trading volume. Particularly, the significant liquidation event in October 2025 directly drained market buying power, serving as a major driver behind subsequent price weakness.

Currently, Bitcoin’s price hovers around $89,640, down approximately 29% from the October 2025 all-time high of $126,080. In comparison, this correction is relatively moderate—the maximum decline from the high is estimated at about 55%, significantly lower than the 70% to 80% sharp crashes seen in past cycles.

Demand Clearly Shrinking, Supply Factors Beyond Halving

Moreno attributes this correction primarily to “demand exhaustion” rather than traditional supply-side changes like halving. He pointed out that 2025 was expected to be a year of strong demand, supported by three pillars: the listing of US spot ETFs, the US presidential election, and the rise of Bitcoin savings strategy companies. However, since early October, these demand drivers have all shown signs of weakness.

The most direct evidence lies in the shift in institutional behavior. US Bitcoin ETF holdings turned into net sellers in Q4 2025, with a total of about 24,000 BTC sold, contrasting sharply with the active accumulation stance of the previous year. Meanwhile, related savings strategy companies have significantly reduced their purchases, even establishing reserves of $1.44 billion to prepare for prolonged sideways or downward markets, reflecting market participants’ cautious outlook on the future.

The forecasted downside target aligns closely with Bitcoin’s “Realized Price”—an indicator reflecting the average cost basis of current holders, which is currently around $56,000. Historically, such price levels often mark the lows of bear cycles and are psychological levels where long-term holders may start to consider adding positions.

Key Support Levels and Gradually Clarifying Timeframes

CryptoQuant defines $70,000 as the first critical support zone. If the market cannot regain bullish momentum here, further declines are likely. Moreno provided a quantitative time expectation: a retracement to $70,000 could occur within the next 3 to 6 months; if the price eventually drops to the deep support of $56,000, it is expected to happen in the second half of 2026.

It is noteworthy that Bitcoin recorded a yearly loss in 2025, the first since 2022. This fact adds additional pressure on market confidence and challenges the rebound prospects in 2026. Analysts emphasize that unless momentum recovers in time or new macro liquidity injections occur (such as a Federal Reserve rate cut), downward pressure will persist.

Liquidity as a Key to Rebound, Volatility Risks Require Early Preparation

Looking ahead, the key to Bitcoin’s USD price trend will depend on the recovery of institutional buying power and improvements in the global liquidity environment. CryptoQuant emphasizes that the current market structure shows similar characteristics to the setup before the 2022 crash, and investors should prepare for subsequent volatility.

Despite short-term pressures, Moreno still characterizes this as a “relatively mild correction” and advises long-term holders to avoid panic selling. However, market participants need to clearly recognize that $70,000 is a major near-term downside target, with deeper support around $56,000 waiting below. Unless positive liquidity catalysts emerge, investors should expect Bitcoin’s USD price to continue its correction trend.