Bitwise Sees 2023-Style Setup as Bear Market Bottom in Q4 2025

Key insights

• Bitwise Chief Investment Officer Matt Hougan said Q4 2025 price weakness mirrored that of early 2023. At that time, the crypto rebounded sharply after deep losses.
• On-chain data showed rising realized capitalization and stablecoin supply above $300 billion. This pointed to accumulation despite muted prices.
• Macro pressure from high long-term yields capped upside, but analysts said Bitcoin’s structure looked resilient rather than breaking down.

Bitcoin news turned cautiously constructive after Bitwise flagged Q4 2025 as a possible cycle low. The firm said prices lagged badly despite strengthening fundamentals, a setup seen before major rebounds.

Bitwise Chief Investment Officer Matt Hougan said the market showed “mixed signals” during Q4. He argued weak price action masked improving structural data across Bitcoin, Ethereum, and stablecoins.

That disconnect mattered because similar conditions appeared in early 2023. At that time, crypto rebounded sharply after collapsing during the 2022 FTX crisis.

Hougan said crypto markets performed poorly during the final quarter of 2025. Bitcoin traded sideways while many investors turned defensive after a strong first half. Yet Bitwise’s report showed continued expansion in core network metrics.

Hougan said that divergence resembled early 2023 behavior, not late-cycle exhaustion. “At the time, data was topsy-turvy; some up, some down, some sideways,” Hougan said.

He noted that prices later surged as fundamentals reasserted control. Bitcoin climbed from roughly $16,000 in early 2023 to near $98,000 by 2025.

Hougan said the market now displayed a similar mismatch between sentiment and data.

Bitcoin’s price entered a consolidation following a sharp correction. Market bias remained neutral to slightly bearish, according to on-chain indicators. However, realized capitalization continued to rise during this phase.

Realized Cap measures the value of coins at their last on-chain movement. A rising Realized Cap during consolidation usually reflects accumulation. It suggests investors add exposure rather than distribute holdings at market prices.

The data implied limited structural selling pressure despite weak momentum. Exchange flows and long-term holder behavior supported that interpretation.

Analysts said Bitcoin tested durability under macro pressure rather than breaking down. A slowdown in Realized Cap growth would challenge that thesis, they warned.

The macro backdrop constrained risk appetite during the quarter. Long-term government bond yields rose across major economies.

Ten-year to twenty-year forward yields stayed elevated in the United States and Japan. Analysts linked that shift to debt expansion, inflation risk, and fiscal stress.

Higher discount rates typically compress valuations for risk assets.

Bitcoin faced those same valuation limits during Q4, analysts said. Despite that pressure, Bitcoin avoided sustained downside acceleration. Price stability during tightening conditions reinforced the accumulation narrative.

Hougan highlighted stablecoins as another bullish signal beneath weak prices. The total stablecoin market cap surpassed $300 billion during Q4. Assets under management and transaction volumes reached new highs.

Hougan said that growth reflected expanding on-chain settlement demand. Decentralized finance activity also strengthened during the period. Hougan noted that Uniswap processed more volume than Coinbase consistently.

That shift mattered because decentralized exchanges reflect organic network use. Hougan said those trends usually appear near bear market lows.

“That’s the kind of divergence you get at the bottom,” Hougan said. He added that fundamentals often recover before sentiment follows.

Not all analysts shared the same outlook for 2026. Fundstrat Head of Research Tom Lee expected volatility to persist. Lee said tariffs and political tensions could weigh on markets for months.

He projected strength only during the latter part of the year. VanEck offered a more optimistic near-term view. The firm said early 2026 could favor risk assets like crypto.

VanEck pointed to fiscal policy clarity and macro stabilization. Those factors, it said, could support renewed inflows into digital assets.

Bitwise identified several potential catalysts beyond price action. Progress on the CLARITY Act ranked among the most important. Hougan also cited a possible stablecoin supercycle.

Regulatory clarity could accelerate institutional participation in tokenized dollars. A new Federal Reserve chair appointment added further uncertainty. Three major U.S. wirehouses also prepared to expand crypto exchange-traded fund access.

Those developments could influence flows during 2026. Hougan said fundamentals already positioned the market for renewed interest For now, the crypto bear market bottom thesis rested on data, not momentum.

Bitcoin price action remained restrained, but underlying demand continued to build. Key levels near recent consolidation lows will guide near-term direction. If accumulation persists and macro pressure eases, prices may eventually respond.

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