CryptoQuant: The BTC market has entered a structural adjustment phase, with a persistently high risk of further decline

On December 5, blockchain data analysis firm CryptoQuant released an analytical report stating that the Bitcoin market has entered a deep and potentially prolonged “structural adjustment phase.”

According to the profit and loss ratio chart provided, the current market status is similar to the early bear market stage of the previous cycle (2022-2023), when a similar adjustment lasted nearly a year.

The report reveals the market's grim situation through several key on-chain indicators. Among them, the “profit and loss score” indicator, which reflects the overall profitability level of the market, shows that the market has now entered a historical bear market zone.

Meanwhile, the drawdown of Bitcoin’s price from its all-time high has at one point reached -32%, a decline that exceeds the typical range of cyclical corrections, indicating that the current market is in an intermediate area between a “deep correction” and the “final bottom.”

All these signals collectively indicate that the market is undergoing a fundamental structural reshuffle, rather than a short-term fluctuation.

The analysis suggests that unless there are clear signs of improvement in the macroeconomic environment (such as Federal Reserve policies, inflation trends) and on-chain fundamentals (such as new addresses, long-term holder behavior), the risk of continued market decline remains high.

Analysts further emphasize that the market’s eventual recovery will require not only the passage of time, but also a deep reshuffling of the profit and loss structure and a complete shift in institutional investor sentiment.

The report concludes that unless there is a clear turnaround in relevant signals, investors should remain alert to the possibility of the market seeking further lows.

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