Dried-Up Spot Demand Contributing to Bitcoin Struggles as Price Enters 5th Month of Downturn

While the Oct. 10, 2025, market crash kick-started the ongoing Bitcoin downturn, dried-up spot demand has contributed to the current struggles.

Bitcoin has remained under pressure since the market crash on Oct. 10, 2025, extending a prolonged downturn that has now reached its fifth month. Despite a brief rebound attempt in January 2026, the market has continued to see weak demand.

Notably, market data confirms that factors such as declining spot demand, falling trading volumes, stablecoin outflows, and lingering futures market damage have all contributed to Bitcoin’s struggles.

Key Points

• Bitcoin has fallen 31% since October 2025, shedding $710 billion in market cap as it currently trades for $78,000.
• The October 10, 2025, crash kick-started the ongoing downturn, erasing over $8 billion from futures markets in one day.
• Stablecoin liquidity declined by roughly $10 billion, indicating tightening market conditions and lower trading activity.
• Bitcoin spot trading volumes have dropped by nearly 50% since October 2025, returning to levels last seen in 2024 and contributing to the downturn.
• Binance’s spot volume fell from nearly $200 billion in October 2025 to about $106 billion, with further declines across Gate.io, Bybit, Kraken, and Coinbase.

Liquidity Shock Still Weighs on the Market

CryptoQuant analyst Darkfost recently discussed this, highlighting weakening demand as a major reason behind Bitcoin’s ongoing struggles. He explained that the 10/10 crash triggered a severe liquidity shock, especially in the futures market, and that impact continues to weigh on prices.

Darkfost noted that open interest dropped by more than 70,000 BTC in a single day, wiping out over $8 billion in futures positions almost instantly. While this event kick-started the downturn, he stressed that several other factors have contributed to the current struggles.

Stablecoin Outflows Add to Bitcoin Demand Pressure

First, Darkfost highlighted growing stress in overall market liquidity, spotlighting steady stablecoin outflows from exchanges. These outflows suggest that traders have reduced activity and lowered their appetite for risk. Over the same period, the stablecoin market lost approximately $10 billion in total cap.

The shrinking liquidity and cautious sentiment have created an environment that discourages aggressive buying. Darkfost emphasized that uncertainty continues to dominate market behavior, making it difficult for Bitcoin to attract fresh demand or sustain a meaningful recovery.

Bitcoin Spot Volumes Show Investor Disengagement

Spot market data also confirms that demand has weakened sharply. Since October 2025, Bitcoin spot trading volumes have fallen by nearly 50% across major exchanges. Binance remains the largest spot venue, but its current volume stands at around $104 billion, far below earlier levels.

In October 2025, Binance’s spot volume nearly reached $200 billion, while Gate.io recorded $53 billion and Bybit handled $47 billion. Since then, volumes across the market have continued to decline, returning to levels among the lowest seen since 2024.

Spot volume charts confirm this trend. After peaking at $198 billion in October, Binance’s volume has steadily dropped to about $106 billion at press time. Similar declines have appeared on Gate.io, Bybit, Kraken, and Coinbase.

Bitcoin Also Constrained by Macro Factors

Speaking on Bitcoin’s current struggles, market analyst Michaël van de Poppe called attention to the ISM Manufacturing PMI. According to him, it is now approaching its first reading above 50 in more than three years. This marks one of the longest manufacturing downturns in recent history.

Van de Poppe argued that Bitcoin’s earlier rally came primarily from the launch and liquidity impact of spot Bitcoin ETFs rather than organic demand. He highlighted a contrast between the current cycle and the end of 2021, when the U.S. Federal Reserve began quantitative tightening and aggressively raised interest rates. 

According to him, this time, quantitative easing has started as economic growth weakens and interest rates decline. He added that recent peaks in gold and silver show the end of this macro phase, projecting a strong final bull market for Bitcoin and crypto over the next 1 to 3 years.