Bitcoin ended the fourth quarter of 2025 on a weak note, raising concerns that the market correction phase is not yet over. After peaking at around $126,200 in early October, the flagship cryptocurrency has been in a sustained slump, losing 30% of its market value at press time.
Since that peak, Bitcoin has struggled to decisively regain the $92,000 level, with repeated rejections from higher prices waning demand and growing caution among investors. In particular, cryptocurrency analyst GugaOnChain warned that a weak quarter finish could extend downward pressure into early 2026, as both on-chain data and sentiment indicators point to a continued bearish situation.
Capitulation indicators signal that market stress will persist in 2026.
According to GugaOnChain in a QuickTake post on Friday, BTC: Quarterly Price Performance Indicator reports a negative Q4 performance of -19.15%, which underlies this bearish outlook. Moreover, several key capitulation indicators suggest that the market is not ready for any form of bullish recovery.
For example, the Output Profit Ratio (SOPR) is currently 0.99, which is less than 1. This indicates that investors are selling Bitcoin at a loss, a common feature of bear market phases. Likewise, short holders’ MVRV (MVRV-STH) remains below 1 at 0.87, indicating that short holders are currently in deep water and more likely to capitulate.
Further reinforcing this story, GugaOnChain points out that the Bitcoin supply loss rate is now at 35.66%, which means more BTC holders will suffer significant losses, lowering confidence and adding to market stress. In addition to these indicators, the Fear and Greed Index dropped from 20 into “extreme fear” territory, suggesting widespread pessimism and risk aversion among participants.
Bear Market Confirmation Indicator
In addition to the capitulation indicators, GugaOnChain highlights additional confirmatory indicators that suggest that downside risks will still dominate in the near term. One of these indicators, market capitalization growth (measured as the ratio of the 30-day to 365-day moving average gap), is firmly negative at -11.65%, indicating that market growth is contracting rather than expanding.
Institutional trends also reflect waning confidence. The U.S. Bitcoin Spot ETF recorded net outflows of $825.7 million from Dec. 18 to Dec. 24, 2025, highlighting a decline in institutional appetite as the price battle continued in the fourth quarter. Meanwhile, Coinbase Premium Gap remains negative at -66.11, indicating weaker demand from US-based investors compared to offshore markets.
Evaluating these multiple indicators together, GugaOnChain concluded that the cryptocurrency market is likely to remain in a bearish phase for the next two to three months. Therefore, investors should expect further correction in the first quarter of 2026 until yield signals ease and demand stabilizes.
At press time, Bitcoin is trading at $87,436, reflecting a small market loss of 0.42% over the past day.
Featured image from Shutterstock, chart from Tradingview
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