Good evening, friends.
The summer of 2025 is about to pass, and there is a hint of autumn's chill in the air. But for us in the crypto space, this 'chill' seems to have arrived earlier and more intensely.
If you, like me, have been staring at the candlestick charts every day lately, but still feel an inexplicable anxiety lingering in your heart—an environment where rises are sluggish and falls are shallow—then congratulations, your feelings are not wrong. We may be stepping into a phase defined by top on-chain data company CryptoQuant as the 'bull market cooling period.'
This is not alarmist talk. When the market's frenzy gradually recedes, and the once mindless 'Buy the Dip' mantra becomes hesitant, the real test has just begun. Today, we will deeply analyze this concept to see what storm is actually hidden behind the data, and what our survival rules as ordinary investors are in this storm.
1. Alarm sounded: What is the 'bull market cooling period'?
First, we need to understand what this 'bull market cooling period' defined by CryptoQuant actually is.
It does not directly pronounce the death sentence of the bull market, but rather serves as a 'battle status alert' from the front lines. You can imagine it as an intermission in a grand fireworks show. In the first half, the fireworks are dazzling, drawing crowds and cheers; but now, the smoke begins to spread, the next round of grand performances has not yet begun, and the audience's enthusiasm gradually wanes as they wait, with some even beginning to doubt whether it has already ended.
According to CryptoQuant's analytical framework, this phase has several typical characteristics:
The upward momentum has significantly weakened: The most intuitive manifestation is that price rises have become exceptionally difficult. What may have been a breakthrough of key resistance levels with a single large candlestick has now become a difficult hurdle to overcome. CryptoQuant's 'Bullish Index' has dropped from a high of 80 to 60. This is undoubtedly a dangerous signal, indicating that bullish power is waning.
Divergence and dulling of on-chain indicators: During the bull market's rapid advance, various on-chain indicators (such as MVRV, SOPR, NUPL, etc.) typically point toward 'bullish'. However, during the cooling period, these indicators begin to 'fight'. Some show that the market is still healthy, while others have already lit up red lights, such as the MVRV ratio possibly reaching the historical cycle's peak region, indicating heightened risk. CryptoQuant's CEO Ki Young Ju even believes that the trend of the 365-day moving average of composite indicators has already hinted at a potential end to the bull market cycle.
Market sentiment has shifted from frenzy to caution: New capital entering the market is beginning to hesitate, while old players tend to take profits or wait and see. The market narrative has also changed from 'starry seas' to 'finding support' and 'avoiding risks.' If negative signals from the cooling period continue to ferment, such as key indicators falling below their 30-day moving averages, the market may officially slide from 'cooling' into 'freezing,' marking the onset of a bear market.
In summary, the 'bull market cooling period' is a crossroads. It may be a healthy consolidation before the next main surge, or it could be a prelude to the bull market's peak sliding into the depths of a bear market. The key to distinguishing between the two lies in the core data we are about to discuss—demand.
2. Demand cliff: From 174,000 to 59,000, how was the foundation removed?
If the 'bull market cooling period' serves as a diagnosis, then 'plummeting demand' is the most critical and fatal laboratory indicator.
According to the 'surface demand' data tracked by CryptoQuant (a comprehensive indicator measuring new purchasing power and active wallet growth), we have seen a startling change:
In July this year, the monthly surface demand for Bitcoin was as high as 174,000; however, entering August, this number plummeted to just 59,000!
The drop exceeded 66%!
What does this mean? It means that the active buying force in the market has evaporated two-thirds within a month. The most important fuel supporting Bitcoin's price surge—new funds and purchasing desire—are being rapidly drained.
We must think deeply about what has happened behind the disappearance of 115,000 Bitcoins in demand.
The institutional buyers have pulled back: In the first half of 2025, the narrative of institutions rushing in was a major driver of the bull market. However, data shows that the pace of institutions has significantly slowed. For example, there is data showing that institutional holdings on exchanges decreased from 36,400 in early July to 18,600 by mid-August. While this reduced holding may have shifted to cold wallets, it also indirectly confirms that after a large-scale accumulation by institutions, they have entered a phase of observation and digestion, and will no longer provide strong incremental buying power in the short term.
Retail investors' FOMO sentiment has exhausted: After months of rising, early retail investors have accumulated a large amount of floating profits and are more willing to take profits. For those latecomers, facing prices of over $100,000, the fear of chasing highs has now surpassed the anxiety of missing out. When prices cannot continuously create new highs to stimulate sentiment, retail purchasing power will naturally shrink significantly.
Uncertainty in the macro environment: Although we are in the crypto space, we cannot escape the backdrop of the global macro economy. Inflation data, interest rate hike expectations, geopolitical risks, etc., from major global economies are quietly influencing the flow of funds into risk assets. Any slight disturbance may cause funds originally planned to flow into the crypto market to temporarily dock in safer havens.
A sharp drop in demand is a more terrifying signal than a price drop. A price drop may simply be the payout of short-term profits, but a systematic contraction of demand undermines the entire market's foundation. It explains why recent price rebounds have been so weak, because the faucet is nearly turned off, making it difficult for the water level in the pool to rise.
Faced with this dire situation, the market's focus is all on the last defense line.
3. Life-and-death defense line: Why is $110,000 the 'Maginot Line' of the bull market?
At this delicate moment, a number is repeatedly mentioned, becoming the focal point of contention between bulls and bears—$110,000.
Why this price? What makes it the key support level that determines the life or death of the bull market?
This is by no means baseless; its importance is reflected in three aspects:
The key pivot of technical patterns: From the candlestick chart perspective, $110,000 is the densely traded area formed by multiple fluctuations in the past. It was once a difficult resistance level, and after being broken, it theoretically transformed into strong support. In technical analysis, such 'resistance-support conversion points' are often significant dividing lines for market trends.
The cost line of important holders: This is the core logic. According to CryptoQuant's on-chain cost analysis model (similar to its 'realized market cap' calculation), around $110,000 is the average entry cost for a large number of long-term holders and some institutions who entered during the mid to late phase of this bull market (especially in the second quarter of 2025).
What does this mean? It means that once the price effectively falls below $110,000, this group of market participants regarded as 'smart money' and 'steadfast holders' will shift from floating profits to underwater losses. This will greatly shake their confidence in holding positions and may trigger some 'faint-hearted' individuals to liquidate their positions, forming a 'stampede' effect. Holding $110,000 is about holding onto this core purchasing power’s psychological defense line.
The watershed of market confidence: In the crypto world, consensus and confidence are more precious than gold. When everyone is fixated on $110,000, that price itself becomes the 'totem' of confidence.
Hold firm: If the price can quickly rebound after multiple tests of $110,000, it will greatly enhance market confidence. This will be interpreted as: although short-term demand has decreased, the market's core support remains strong, and the bottom is solid. This will attract bottom-fishing capital to enter and create conditions for 're-acceleration' of demand, potentially ending the cooling period and transitioning into a new round of increases.
Breakthrough: If $110,000 is effectively broken (for example, if the daily closing is below it), the market's psychological defense line will be completely shattered. Panic will spread, leading to increased selling pressure and forming a negative cycle. At that time, the risk of transitioning from the 'cooling period' to a bear market as warned by CryptoQuant will sharply increase, and the next effective support may need to be sought far below. Historically, the loss of key support levels is often accompanied by long bear market cycles.
Thus, $110,000 is not just a price; it is a psychological defense line, a cost defense line, and a confidence defense line. It is the ultimate test of whether this round of the 'bull market cooling period' is merely a 'half-time break' or the 'end of the show.'
4. Our survival rule: How to survive and find opportunities during the 'cooling period'?
Faced with such a complex situation, we as ordinary investors cannot be blindly optimistic nor should we surrender. The following 'survival rules' may help us navigate through the fog:
Rule One: Let go of illusions and face risks.
Please immediately abandon the frenzied mindset of 'bull markets never peak' and 'mindless betting.' Clearly recognize that we are in a 'cooling period' of high risk and high uncertainty. Controlling positions and reducing leverage is what you should do right now. Remember, surviving is the only way to output.
Rule Two: Become a believer in data, not a slave to price.
Do not let short-term price fluctuations pull you around. You should focus more on observing on-chain data that determines trends. Use professional tools like CryptoQuant more, and pay special attention to:
Demand indicators: When will surface demand stop declining and rebound?
Exchange flow: Is it net inflow or net outflow? Are whales selling off or accumulating?
Holder behavior: Are long-term holders selling or continuing to accumulate? Does the SOPR indicator show that the overall market is in a profitable state?
Only when these core data show a trend improvement will it be a signal for us to become optimistic again.
Rule Three: Cash (stablecoins) is king, maintain flexibility.
In times of unclear trends, holding a certain proportion of stablecoins is not about missing out, but rather about giving you valuable initiative. If the market confirms a stabilization and rebound, you have the bullets to increase your position; if the market unfortunately breaks through key support, you also have capital to lay out calmly at lower positions. With food in hand, there is no panic in the heart.
Rule Four: Patience is the highest virtue.
The 'bull market cooling period' tests patience the most. It may last for weeks or even months. During this time, frequent trading is a big taboo. The best strategy is to formulate your trading plan based on the key levels (such as the $110,000 support) and key data (such as demand changes) we analyzed earlier, and then patiently wait for the market to provide clear signals.
Conclusion
Friends, in the world of Bitcoin, there is no eternal summer, nor is there eternal winter.
Currently, we stand at the threshold of summer and autumn, feeling the waves of cold from the market. The alarm for plummeting demand has sounded, and the $110,000 defense line is precarious. This is indeed a disquieting moment, but history has repeatedly told us that crises also breed opportunities.
As the market's frenzy fades, what will be revealed is true value and clearer opportunities. For those who can maintain clarity, respect data, and adhere to discipline, this so-called 'bull market cooling period' is precisely the best time to shed impatience, think deeply, and establish deeper connections with the market.
In the cold, it is the best time for the clear-sighted and visionary to widen the gap.
Wishing everyone good luck.