CryptoQuant CEO Ki Young Ju recently expressed his view that the bullish phase for Bitcoin has come to an end, pointing to a transition into a bear market.
His conclusion is based on a detailed analysis of on-chain data, which he believes highlights a shift in market dynamics.
One of the key metrics Ju examined is the “Realized Cap.” This concept calculates the actual capital flowing into the Bitcoin market by considering when BTC enters a wallet as a purchase and exits as a sale. By multiplying the amount of BTC held in wallets, the Realized Cap provides an estimate of the real investment moving into the market. Unlike Market Cap, which simply reflects the most recent trading price on exchanges, Realized Cap offers a more accurate measure of capital involvement.
Ju noted that Market Cap can be misleading, especially during periods of low selling pressure, when even minor purchases can drive prices higher. Conversely, when selling pressure is intense, significant buying activity might fail to make an impact. He illustrated this with a past instance when Bitcoin was trading near $100,000, where large transaction volumes did not significantly affect the stable price.
To assess whether the market is in an upward or downward trend, Ju compared Realized Cap and Market Cap. If the Realized Cap grows while the Market Cap remains flat or declines, it indicates that even though more capital is entering, it is not lifting the price, a clear bear market signal. In contrast, a rise in prices with minimal capital inflow suggests a bullish trend.
Currently, Ju observes the first scenario unfolding: substantial inflows are not pushing Bitcoin’s price upward, pointing to a bearish outlook. He added that while selling pressure might ease eventually, historical patterns suggest that market recovery from such phases generally takes at least six months, making a short-term rally unlikely.
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