CryptoQuant: Bear Market Is Coming, US Releases Epstein Case Files

Headlines

▌CryptoQuant: Bitcoin Demand Growth Has Significantly Slowed, Market Is Entering a Bear Phase

CryptoQuant stated that the growth in Bitcoin demand has markedly slowed, indicating an upcoming bear market. Since 2023, Bitcoin has experienced three major surges in spot demand—driven by the launch of US spot ETFs, the US presidential election results, and the Bitcoin treasury company bubble—but demand growth has fallen below trend levels. This suggests that most of the new demand in this cycle has already been realized, and the key support pillars for prices have disappeared.
Institutional and large holder demand is currently contracting rather than expanding: the US spot Bitcoin ETF turned net selling in Q4 2025, with holdings decreasing by 24,000 BTC, contrasting sharply with the strong accumulation in Q4 2024. Similarly, the growth of addresses holding 100 to 1,000 BTC (representing ETFs and treasury companies) is below trend levels, echoing the demand deterioration trend seen at the end of 2021 before the 2022 bear market.
The derivatives market confirms weakened risk appetite: the funding rate of perpetual futures (365-day moving average) has fallen to its lowest level since December 2023. Historically, this decline reflects a reduced willingness to maintain long positions, a pattern typically seen in bear markets rather than bull markets.
Price structure has worsened with demand weakening: Bitcoin has broken below its 365-day moving average, a critical long-term technical support level that historically marks the boundary between bull and bear markets. The four-year cycle of Bitcoin is driven by demand cycles rather than halving events: the current decline further indicates that Bitcoin’s cyclical behavior is mainly governed by the expansion and contraction of demand growth, not halving events or past price performance. When demand peaks and begins to decline, a bear market often follows regardless of supply-side dynamics.
Downside reference points suggest a relatively small bear market: historical data shows that Bitcoin’s bear market bottom is roughly aligned with realized prices, currently near $56,000, implying a potential retracement of up to 55% from recent highs— the smallest decline ever. Mid-term support is expected around $70,000.

▌U.S. Department of Justice Releases Epstein Investigation Files, Hiding Thousands of Victims and Families’ Information

The U.S. Department of Justice has begun releasing investigation files related to the Epstein case. The DOJ added a note on its webpage with the file link, stating that “all reasonable efforts” have been made to redact victims’ personal information, but some details may be unintentionally disclosed. It is reported that Deputy Attorney General Blancé told Congress that during a comprehensive review of the files, over 1,200 victims and their families were identified, and all relevant names and identities have been lawfully removed. Blancé earlier stated that tens of thousands of documents would be released on the 19th, but full disclosure may take “several weeks.” (CCTV News)

Market Data

As of press time, according to CoinGecko:

BTC price: $88,033.00, up approximately +3.2% in 24 hours;

ETH price: $2,974.78, up approximately +5.5% in 24 hours;

BNB price: $852.49, up approximately +3.3% in 24 hours;

SOL price: $125.77, up approximately +6.6% in 24 hours;

DOGE price: $0.130925, up approximately +8.1% in 24 hours;

XRP price: $1.90, up approximately +7.3% in 24 hours;

TRX price: $0.278386, down approximately -0.06% in 24 hours;

WLFI price: $0.13444, up approximately +7.2% in 24 hours;

HYPE price: approximately $24.65, up approximately +10.5% in 24 hours.

Policies

▌Coinbase: The ‘Big and Beautiful Act’ Could Accelerate Adoption of Prediction Markets

Coinbase states that the ‘Big and Beautiful Act’ signed by Trump will restrict the ability to deduct losses from traditional betting activities, potentially causing some taxpayers to face taxes even if they incur overall losses. The company believes prediction markets, due to their contract nature, are more flexible in tax treatment and may attract users to shift toward these markets. Coinbase has partnered with Kalshi to promote prediction markets and has filed lawsuits against Michigan, Illinois, and Connecticut, advocating for federal CFTC regulation.

****▌Brooklyn Man Charged with Phishing Scam, Stealing $16 Million from Coinbase Users

Brooklyn District Attorney announced on Friday that 23-year-old Ronald Spekto is charged with stealing approximately $16 million worth of cryptocurrency from about 100 Coinbase users.
Using the online alias “lolimfeelingevil” (“I am feeling evil”), he is accused of orchestrating a phishing and social engineering scam. Prosecutors say Spekto impersonated Coinbase customer service, tricking users into transferring crypto to accounts under his control.
Prosecutors also state that Spekto falsely claimed victims’ digital assets were at risk of hacking, to deceive them into handing over their assets. He is then said to have used cryptocurrency mixers, token exchange services, and crypto gambling sites to launder the illegally obtained digital assets.

****▌US Senator Cynthia Lummis Plans to Push for Enactment of Crypto Market Structure Bill During Remaining Term

According to Cointelegraph, Wyoming Republican Senator Cynthia Lummis, a long-time advocate for crypto legislation, announced her plan to fully push for the signing into law of the Crypto Market Structure Bill during her remaining term.

Blockchain Applications

▌DraftKings Announces Launch of Independent Prediction App

DraftKings announced on Friday the official launch of its standalone prediction app “DraftKings Predictions,” entering the federally regulated prediction market overseen by the CFTC. The app allows qualified users to trade contracts related to sports events and financial markets, and will be gradually rolled out on major app stores.

Cryptocurrency

▌Victim Loses About $50 Million Due to Copying Addresses from Contaminated Transfer Records

According to Scam Sniffer, a victim lost approximately $50 million by copying addresses from contaminated transfer records to make a transfer.

****▌Galaxy Research Releases 2026 Crypto Market Annual Forecast: Stablecoin Trading Volume May Surpass US ACH System

Galaxy Research’s 2026 annual forecast states that Bitcoin’s market volatility in 2026 is too high to predict precisely, but the possibility of reaching a new all-time high in 2026 remains, with a potential price of $250,000 by the end of 2027. Other key predictions include:
· Stablecoin trading volume may surpass the US ACH system in 2026;
· The Solana ecosystem may continue to expand, with enterprise-level public chains moving from testing to real settlement;
· The US market may see increased inflows of crypto ETFs and institutional funds;
· On-chain payments combining DeFi, tokenized assets, and AI will further develop, viewed as a key driver for the next phase of crypto infrastructure evolution.

****▌World Liberty Financial Proposes WLFI Token Spending Plan, Sparks Controversy

On December 20, news broke that World Liberty Financial proposed a new WLFI token spending plan, intending to unlock up to 5% of its token reserves to promote its USD1 stablecoin partnership. The proposal has sparked disagreements within the community.
Some holders worry that token spending could depress prices and harm the interests of the approximately 80% of WLFI token holders with locked positions, while supporters believe the incentives will benefit long-term ecosystem value. World Liberty’s token sales have raised about $550 million, but WLFI’s price has fallen roughly 60% from its peak.

Major Economic Developments

▌Spot Silver Breaks $67/oz, Sets New Record

Spot silver surged past $67 per ounce, setting a new record, with a daily increase of 2.6%. COMEX silver futures rose over 3%, trading at $67.24 per ounce.

****▌Federal Reserve Board Member Milan: Inflation Is Moving in the Right Direction

Federal Reserve Board member Milan stated that inflation is heading in the right direction; given policy lags, monetary policy should be forward-looking; the Fed has not yet initiated a new round of quantitative easing.

****▌Federal Reserve Board Member Milan Reiterates Need to Cut Rates to Address Labor Market Risks

Federal Reserve Board member Stephen Milan reiterated on Friday that, since inflation has cooled and monetary policy needs to offset labor market risks, the Fed should cut rates. Milan said the labor market is slowing, “and if this trend continues without sufficient policy adjustment, we could face difficulties by 2027.” Milan is one of the most hawkish members supporting rate cuts within the Fed. At last week’s Fed meeting, he voted against a 50 basis point cut, favoring a smaller 25 basis point reduction. His term ends on January 31.

****▌US Stock Market Closes: Major Indices Rise, Nvidia Gains Nearly 4%

US stocks closed on Friday with the Dow up 0.38%, S&P 500 up 0.88%, Nasdaq Composite up 1.31%. Chip stocks surged: Nvidia (NVDA.O) rose nearly 4%, Broadcom (AVGO.O) up 3%, Intel (INTC.O) up 1.4%, Micron (MU.O) up nearly 7%. Nasdaq China Golden Dragon Index rose 0.86%, Alibaba (BABA.N) up 1.68%, Pinduoduo (PDD.O) up 3.5%. (Jin10)

****▌Hassett: US Inflation Is Actually Below Target, Fed Has “Ample Room” to Cut Rates

White House economic adviser Hassett said on Friday in an interview with Fox Business that President Trump’s statement that inflation is low is correct, despite data, public opinion, and most economists disagree. Hassett explained that evaluating inflation based on year-over-year data is flawed; it’s better to look at the three-month moving average of price pressures. This indicates that price pressures are not significantly above the Fed’s 2% target and are actually below it. Hassett said that, based on the three-month average, current inflation is about 1.6%. Core inflation in the US is “at or below target,” giving the Fed “ample room” to cut rates. (Jin10)