On December 3, CryptoQuant CEO Ki Young Ju expressed concern that “most of Bitcoin’s on-chain indicators are bearish.”
“Without macro liquidity, we enter a bear cycle,” he added.
The CEO said it clearly. He tied his argument to his company’s composite on-chain dashboard and global liquidity framework, and framed the November drawdown as the start of a new long-term downtrend rather than a healthy correction.
The question is whether the on-chain data and liquidity background actually supports the bear cycle theory, or whether Ki is reading stress signals in the bull market as the start of crypto winter.
New Kumacycle case
CryptoQuant metrics such as Bull Score, MVRV, Miner Flow, and Stablecoin Liquidity are showing signs of a new bear market cycle. This figure compares to the first quarter of 2022, which Glassnode reported on December 3.
Furthermore, high realized losses, declining liquidity and a cracking short-term holder cost base are adding to the stressful scenario.
Start with MVRV (market value vs. realized value). This is a ratio that compares Bitcoin’s market capitalization to its realized cap, weighting each coin by the last price it moved on-chain.
When MVRV exceeds 3.5, the market enters historically euphoric territory. Below 1.0, the market is trading below its total cost basis, typically at the bottom of a bear market.
At the time of writing, MVRV is around 1.8 to 2.0. That’s a long way from the euphoric highs, but it’s also well above the sub-1.0 lows seen in 2018, 2020, and 2022.
Bear cycle campers view this as a sign that the market is cooling down but has not yet reached the deep value zone. As MVRV compresses toward 1.0, the classic bear trajectory is confirmed.
SOPR (expended production return) tells a similar story. SOPR measures whether an on-chain coin is selling at a profit or a loss.
If the SOPR is above 1.0, the average of the coins sold will be profitable. Below 1.0, the average coin is underwater.
November’s decline took SOPR below 1.0 for the first time since the summer, suggesting short-term holders are realizing losses.
Some analysts are comparing its depth and duration to early 2022, when SOPR remained subdued for months.
The RHODL (Realization Upper HODL) wave breaks down Bitcoin’s realization upper limit by age cohort. When long-term holders start spending at higher interest rates, that’s usually a sign of a ceiling.
Recent RHODL data shows that the supply of long-term holders has been declining since mid-year, a pattern consistent with force allocation.
The November correction accelerated that trend, with older cohorts moving coins on-chain at prices above $90,000.
Minor flows add another layer. Miners are structurally long on Bitcoin and tend to hold it even in bull markets. A sudden spike in miner outflows signals stress.
According to CryptoQuant’s miner reserve data, reserves have been declining since October, with miner wallet balances reaching their lowest level in years in late November.
Finally, there is the liquidity of stablecoins. Bear cycle campers point to the decline in stablecoin supply on exchanges as a sign that dry powder is leaving the system. The market capitalization of stablecoins has been flat to decreasing since mid-November.
Without new fiat-backed liquidity ready to buy the push, Bitcoin will lack the fuel to rise further.
Midpoint: Deep adjustment, not a long-term bear.
Others are feeling the same stress, but I wouldn’t call it the top of a completed cycle.
SOPR, realized price range, and MVRV are no longer euphoric zones. However, historically, classic bear market bottoms occur much closer to total realized prices than today’s levels.
Moreover, ETF outflows and reduced stablecoin liquidity led to the worst two-month drawdown since mid-2022. However, Glassnode’s MVRV Z-score has not entered oversold territory yet, and the whale’s accumulation of around $90,000 suggests that the market is at an inflection point rather than a clear new secular downtrend.
This camp acknowledges that the indicators have cooled, but argues that the market is still structurally different from previous bear cycles. Bitcoin has yet to break through the gross realized price of around $50,000 to $55,000.
Open interest in derivatives has been reset from $46 billion to $28 billion, clearing out over-leveraged longs and setting the stage for a cleaner rally once liquidity improves.
Bull market reset theory
A Glassnode-based summary labeled the fall to the low $80,000 range in late November as the “strongest BTC buying zone in 2025,” pointing to a dense realized price cluster where long-term holders re-added exposure after forced liquidations and derivatives open interest was washed away.
Trakx’s Nov. 28 monthly review said November’s decline “seems to be a reaction to a normal bull cycle rather than a new bear market,” arguing that the bullish trend in broad digital assets should hold as long as global liquidity continues to rise.
Additionally, open interest was reset and ETF inflows resumed, with December cumulative net inflows remaining at $50 million as of December 3.
Against this backdrop, if the Fed implements its policies, the supply of stablecoins could increase and break through the $93,000 to $96,000 resistance zone.
Global net liquidity: the missing variable
This is where Ki’s judgment becomes important. He asserts that “if there is no macro liquidity, we will enter a bearish cycle,” clearly linking on-chain stress and the background of deteriorating liquidity.
A Nov. 25 article in Therm Capital highlighted that, unlike previous cycles, global net liquidity has been declining for years under the weight of inflation, interest rate hikes, and quantitative tightening, which “has constrained money flows and upside potential throughout this cycle.”
I/O Fund’s Beth Kindig said this week that their model shows a global liquidity stall and “preparing for a reversal,” a pattern that is historically consistent with major Bitcoin tops and suggests we are in the final stages of a multi-year bull market, rather than the early stages.
Meanwhile, Bitwise’s early December outlook asserts that global liquidity growth “remains robust” and valuations have “no evidence of a blow-off stage,” which it explicitly uses to reject a full bear market transition.
Glassnode’s new institutional report for the fourth quarter with Fasanala adds a more neutral view. Bitcoin has rallied as global liquidity tightens, but this report focuses on changes in market structure rather than declaring a definitive macro top.
Verdict: Conditional bearish, not confirmed
On-chain data shows stress. MVRV has cooled, SOPR has fallen below 1.0, long-term holders have dispersed, miners have sold their reserves, and stablecoin liquidity has stagnated.
These all coincide with the beginning stages of a bear market.
But they are also consistent with severe corrections in bull markets, especially those with high leverage and volatile ETF flows.
The main difference is what happens next in terms of liquidity.
If global net liquidity continues to shrink and the Fed keeps interest rates high for an extended period of time, Ki’s bear cycle theory will become more important. Once liquidity stabilizes or recovers and ETF inflows resume, the bullish reset camp will win.
At the moment, the data suggests that Bitcoin is at an inflection point rather than a solid all-time high. On-chain indicator flashes yellow instead of red. And the background to liquidity is disputed, with credible voices on both sides.