Bitcoin (BTC) is poised to end the fourth quarter of 2025 with nearly a 22% loss, marking its weakest Q4 performance since the downturn of 2018. The recent decline has rattled traders and market analysts as on-chain metrics, broader economic factors, and a decline in speculative activity suggest a phase of fragility for the leading cryptocurrency.

Bitcoin Registers Its Weakest Q4 in Seven Years

According to recent quarterly performance data from Coinglass, Bitcoin is down almost 22%. Historically, the cryptocurrency has usually gained during the fourth quarter after experiencing summer downturns or extending bullish trends. This trend has been particularly pronounced in recent years, with notable gains of about 57% in Q4 2023 and just under 48% in Q4 2024, spurred by optimism surrounding spot ETFs and institutional investments.

The last time Bitcoin faced such a severe Q4 was in 2018 when it suffered a loss exceeding 42% during an extended bearish market cycle. Although the current decline appears less severe, the underlying structure bears resemblance to the past. As per Coinglass statistics, 2025 initiated with an 11.8% drop in the first quarter, subsequently rebounding nearly 30% in the second before edging up by just over 6% in Q3. This sequence reflects previous patterns where mid-year recoveries fell short of sustaining momentum into the year-end, pointing towards waning demand rather than an immediate shock.

The concentration of losses in the final quarter is particularly concerning. Previous quarterly gains had indicated Bitcoin was holding steady throughout much of 2025. However, the late-year slump indicates a change in market sentiment. Typically, such Q4 declines have surfaced when speculative interest diminishes, and fresh capital fails to replace earlier inflows, a trend now mirrored in on-chain data.

As of now, Bitcoin is fluctuating around $89,000, showing a slight uptick of over 1% in the last 24 hours but reflecting a more than 2% decrease over the past two weeks. Market movements have remained volatile, trading within an $85,000 to $90,000 range for the past week. While it has seen a nearly 6% increase over the last month, the cryptocurrency is down about 7% annually and almost 29% below its all-time high of approximately $126,000 reached in early October.

On-Chain Data and Economic Signals Indicate Caution

Market analysts at CryptoQuant are largely interpreting the Q4 downturn as a continuation of a broader cooling trend rather than an abrupt collapse. Analyst GugaOnChain noted that Bitcoin remains in a bear market, referencing the Bull-Bear Cycle indicator and a negative spread between 30-day and 365-day moving averages.

On-chain activity has also seen a reduction, with daily transactions dipping from around 460,000 to 438,000 and the number of highly active addresses decreasing to about 41,500, suggesting less engagement from larger traders.

Insights from XWIN Research Japan indicate that Bitcoin is navigating through a “stop-and-go” phase in light of its earlier recovery. The firm attributes part of the recent weakness to global economic conditions, notably the Bank of Japan’s increase in rates to 0.75% on December 19.

Despite this move being largely anticipated, the prevailing uncertainty regarding future rate increases has dampened risk-taking behavior, particularly for yen-linked trades in crypto markets. Additionally, leverage indicators suggest much of the over-speculation has already been worked out, without a significant rebuild despite price fluctuations. Moreover, XWIN highlighted that the Coinbase Premium Index has bounced back from extremely negative levels but has not yet consistently remained positive, indicating a limited appetite for strong demand lead by the U.S.