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Bitcoin is ending the fourth quarter of 2025 on a weak note, reinforcing fears that the market's correction phase is much from over. After peaking at around $126,200 in early October, the flagship cryptocurrency entered a sustained downturn, losing 30% of its market value at press time.
Since that peak, Bitcoin has struggled to finally reclaim $92,000, with repeated rejections at higher prices highlighting waning demand and growing investor caution. Notably, crypto analyst GugaOnChain warns that the poor quarterly close could increase bearish pressure into early 2026, as each on-chain data and sentiment indicators point to a continuation of bearish conditions.
Capitulation indicators signal that market stress will proceed into 2026
According to GugaOnChain in Friday's QuickTake post, the BTC: Quarterly Price Performance indicator reports a negative Q4 performance of -19.15%, which serves as the premise for this bearish outlook. Additionally, several key capitulation indicators suggest that the market is just not prepared for any upside.
For example, the Spent Output Profit Ratio (SOPR) is currently below 1 at 0.99, suggesting that investors are selling Bitcoin at a loss, a standard feature of bear market periods. Likewise, Short-Term Holder MVRV (MVRV-STH) stays below 1 at 0.87, suggesting that Short-Term Holders are deep underwater and are currently more inclined to capitulate.
GugaOnChain further supports this narrative by pointing to the increased loss share of Bitcoin supply, currently at 35.66%, pushing more BTC holders into significant losing positions, thereby reducing confidence and creating market stress. In addition to those metrics, the Fear & Greed Index has fallen into the “extreme fear” range at 20, suggesting widespread pessimism and risk aversion amongst participants.
Source: CryptoQuant
Bear market confirmation indicators
Beyond the capitulation metrics, GugaOnChain highlights other confirmatory indicators that suggest downside risks will proceed to prevail within the near term. One of those indicators, the market capitalization growth rate, as measured by the gap ratio of the 30-day versus 365-day moving average, is significantly negative at -11.65%, indicating declining market growth reasonably than expansion.
Institutional inflows also reflect dwindling confidence. U.S. Bitcoin spot ETFs recorded net outflows of $825.7 million between December 18 and December 24, 2025, indicating lower institutional appetite as price wars proceed within the fourth quarter. Meanwhile, the Coinbase Premium Gap remained negative at -66.11, indicating weaker demand from US-based investors in comparison with offshore markets.
Evaluating these various metrics together, GugaOnChain concludes that the crypto market is more likely to remain in a bear phase over the subsequent two to a few months. Therefore, investors should expect further corrections in the primary quarter of 2026 until capitulation signals subside and demand stabilizes.
At press time, Bitcoin is trading at $87,436, reflecting a slight market lack of 0.42% over the past day.
BTC is trading at $87,660 on the each day chart | Source: BTCUSDT chart on Tradingview.com
Featured image from Shutterstock, chart from Tradingview
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