Beware of false breakouts: CryptoQuant reveals the current predicament of Bitcoin and its startling similarity to 2022

Bitcoin has risen 21% since November 21, 2025, appearing to be a decent rebound. However, according to the latest news, on-chain data analysis firm CryptoQuant offers a different perspective: this is merely a short-term bounce within a bear market, with market demand still weak, and the trend closely resembles that of 2022. This view warrants serious consideration.

Weak Demand Behind the Rebound

Julio Moreno, Head of Research at CryptoQuant, points out that although Bitcoin’s price has rebounded by 21%, market demand conditions have slightly improved but remain weak. This is a key distinction—rising prices do not equate to market recovery.

Based on on-chain data, the current market exhibits the following characteristics:

• Short-term holders are taking profits, indicating a lack of confidence in holding
• Selling volume of long-term holders has significantly decreased (the 90-day average dropped from 2300 BTC to 1000 BTC), which is somewhat a positive signal but also reflects declining market participation
• Open interest has decreased by 31% since the high point in October last year; while deleveraging is a positive sign, it also indicates waning market enthusiasm

All these data points lead to a conclusion: the current rally is unsupported by demand.

The 365-Day Moving Average: The Bear Market Boundary

CryptoQuant considers the 365-day moving average as a critical dividing line for determining bull and bear markets. Currently, this average is around $101,000, while Bitcoin’s current price is $95,279, still below that level.

More importantly, Bitcoin previously fell below this moving average by about 19%, then rebounded to the current level. This pattern closely resembles 2022—when Bitcoin also experienced a strong rebound after breaking below the 365-day MA but was ultimately halted near that line, leading to a resumption of the downtrend.

The lesson from history is clear: in a bear market, failure to effectively reclaim this long-term moving average often signals the arrival of a new decline.

Echoes of 2022

CryptoQuant specifically points out in its report that the current market sentiment is quite similar to the bottom phase of 2022. At that time, many market participants believed the bear market was over, the four-year cycle had failed, and a super cycle was imminent. But fundamentals and various technical indicators still showed the market was in a bear phase.

The current situation is:

• Market participants are full of expectations for a rebound
• But on-chain data and technical indicators still do not provide conclusive evidence of recovery
• The fundamental issue of weak demand remains unresolved

This optimistic sentiment contrasts sharply with cautious data.

Deleveraging Is a Good Sign, But Not Enough

It is worth noting that a 31% decrease in open interest is indeed a positive signal. Deleveraging means the market has cleared excessive speculative leverage, reducing the risk of chain liquidations, and creating a healthier foundation for potential subsequent rallies.

However, this alone is not enough to confirm a bottom. Deleveraging is merely cleaning up the market; genuine recovery requires new, real demand to enter. Currently, the situation is: although leverage is being reduced, demand signals remain weak.

Key Points to Watch

From now on, several key points deserve continuous observation:

1. Whether Bitcoin can effectively break above the 365-day moving average (around $101,000) and hold
2. Whether market demand truly improves or if the rebound is just a fleeting phenomenon
3. Whether short-term holder behavior changes, indicating genuine new demand entering
4. If the 365-day moving average cannot be broken, where is the next support level

Summary

CryptoQuant’s analysis reminds us not to be fooled by superficial price increases. The fact is, Bitcoin has risen 21%, but behind this are weak demand, optimistic market sentiment, and cautious data—creating a contradiction. The similarity to 2022 is a warning: history may repeat.

The current rebound might just be a breather within a bear market; real recovery requires fundamental improvement in market demand. Until the critical position at the 365-day moving average is broken, a cautious attitude remains necessary. The market’s next move will be determined by whether this line is held or lost.