CryptoQuant research head **Julio Moreno** stated that Bitcoin (BTC) is in a clear bearish phase, with major demand and liquidity indicators suggesting weakness, and that the process of forming a bottom could take months rather than weeks.

What happened: Bear market score '0'

Moreno presented his views based on the CryptoQuant bear score index, which consists of 10 indicators encompassing on-chain valuation, liquidity conditions, market data, and technical trends.

This index fluctuates between 0 and 100, with 0 indicating the weakest condition. It has remained in the 0-10 range for about the past six weeks.

Moreno explained, "This is a signal that bearishness is too strong on either the data side or the market side, or both."

He pointed to the U.S. spot Bitcoin ETF as a major burden factor, stating that they have switched to net selling from the fourth quarter and will continue the selling trend until early 2026. In January, unlike a net purchase of 46,000 BTC in the same period last year, more than 10,000 BTC were disposed of. The Coinbase premium, an indicator of U.S. demand, also turned negative in November and has remained mostly negative since then.

The liquidity of stablecoins has stagnated since mid-October, resulting in the funds that Moreno referred to as traders' "dry powder" being blocked.

Read more: What $10B Iran Crypto Probe Means For Stablecoins

Why it matters: The recovery timing is uncertain.

Moreno analyzed that based on on-chain realized prices for traders, there is upper resistance around $89,000 and $79,000, with $70,000 as an intermediate target and $56,000 as a deeper correction level, which is related to cost-based data.

He emphasized that Bitcoin has not recovered since it broke below the one-year moving average at the beginning of November, noting that this pattern is similar to early 2022.

Moreno said, "First, we need to accept this fact. We are in a bear market. We must plan accordingly," adding that "there will be price rebounds in between, but we must not confuse this with the beginning of a new bull market."

He predicted that the first reliable bottom formation period could appear around the third quarter of 2026, depending on when demand, U.S. capital flows, and liquidity indicators no longer increase steadily.

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