Bitcoin Bull Market Cycle May Have Ended, Says CryptoQuant CEO

According to Odaily, Ki Young Ju, founder and CEO of CryptoQuant, shared insights on the X platform suggesting that the Bitcoin bull market cycle might have concluded. He explained this through the concept of realized market value in blockchain data. When Bitcoin enters a blockchain wallet, it is considered a 'buy,' and when it exits, it is seen as a 'sell.' This concept helps estimate the average cost basis for each wallet, which, when multiplied by the amount of BTC held, results in the total realized market value. This value is often viewed as the total capital entering the Bitcoin market through actual on-chain activity, while market value is based on the latest trading price on exchanges. Ju noted that when selling pressure is low, even small purchases can drive up prices, thus increasing market value. Strategy has capitalized on this by issuing convertible bonds and using the proceeds to buy Bitcoin, resulting in a book value growth of their Bitcoin holdings that far exceeds the actual capital invested. However, when selling pressure is high, even significant purchases fail to affect the price, as seen when Bitcoin's trading price neared $100,000, leading to substantial market volume but little price change. Realized market value indicates the amount of actual funds entering the market, while market value reflects how prices respond. If realized market value is increasing but market value is stagnant or declining, it suggests capital is flowing in without a corresponding price increase—a bearish signal. Conversely, if realized market value remains stable while market value surges, it indicates that even small amounts of new capital are driving prices up—a bullish signal. Currently, the data points to the former scenario, where capital is entering the market but prices are not reacting, characteristic of a bear market. In summary, a bull market is characterized by small capital driving price increases, whereas a bear market occurs when even large capital cannot push prices up. The current data clearly indicates the latter. While selling pressure might ease at any time, historical trends suggest that a true reversal requires at least six months, making a short-term rebound unlikely.