Ki Young Ju, the CEO of blockchain analytics platform CryptoQuant, has declared that the Bitcoin bull cycle is over. Notably, the premier cryptocurrency has struggled to establish a sustained uptrend since hitting a new all-time high of around $109,000 in January, causing doubts about the viability of the current bull run.
Bitcoin’s Unresponsive Price Points To Bear Market Onset
In an X post on April 5, Ki Young Ju shared an interesting theory on why Bitcoin may have concluded its current bull run. The prominent crypto figure has based this postulation on on-chain data concepts around the Realized Cap and the Market Cap.
Young Ju describes the Realized Cap as the total capital that flows into the BTC market as revealed by actual on-chain activity. The Realized cap reveals a more accurate measurement of the BTC network by summing the price at which each coin last moved.
On the other hand, the Market Cap provides a BTC network valuation based on the latest exchange trading prices. The CryptoQuant CEO explains that market cap/prices do not increase or decrease in proportion to transaction sizes based on common misconceptions but in response to the balance between buying and selling pressure.
Young Ju states that amidst low sell pressure, a small buy can cause a rise in price and market cap. On the other hand, large Bitcoin purchases during high sell pressure can fail to effect a positive price reaction as the market consists of a high number of sellers.
Looking at both concepts, it is understood that Realized Cap measures the capital inflows into the BTC market while Market Cap indicates price reaction to these inflows. Therefore, the CryptoQuant boss explains that a rise in Realized Cap, while Market Cap declines or remains unchanged, presents a classic bearish signal as prices are failing to respond positively despite new investments.
Alternatively, a stagnant Realized Cap accompanied by an increased Market Cap is a bullish signal that reflects the low level of sellers; thus any small amount of new capital can induce substantial price gains.
Ki Young Ju states the former situation is currently playing out in the Bitcoin market with prices failing to rise inflow as indicated by on-chain data in exchange transactions, ETF markets, and custodial wallets activity. This development suggests the presence of a bear market. While Young Ju states that the current sell pressure could wane at any time, historical data supports a reversal period of at least six months.
Bitcoin Price Overview
At press time, Bitcoin was trading at $83,700 reflecting a decline of 0.94% in the past day.
