The emotional roller coaster the crypto market has been on in recent years has often placed Bitcoin (BTC) at the center of all the ups and downs.
Following the most recent rally in the market, many observers were left wondering whether the bullish momentum was sustainable or whether a bearish trend was on the horizon. In a recent statement, Cryptoquant CEO Ki Young Ju offered some clarity on the issue, explaining why the Bitcoin bull cycle may be over. Ju’s analysis is centered on the concept of “Realized Cap,” which is an on-chain data metric that tracks the total capital that has entered the Bitcoin market.
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Realized Cap vs. Market Cap: A Key Indicator of Bitcoin’s Market Health
Ju’s argument against the continued bull cycle centers on the relationship between two essential market metrics: Realized Cap and Market Cap. Realized Cap is a measurement taken on the blockchain that reflects the actual capital flowing into the Bitcoin network. When Bitcoin enters a wallet, it’s considered a “buy,” and when it leaves, it’s a “sell.” By taking the average cost basis for each wallet and multiplying that by the number of BTC still held within it, we arrive at Realized Cap, which estimates the total capital that is actually on-chain and not just hypothetically circulating somewhere in cyberspace.
In contrast, what we have with Market Cap is just the value of Bitcoin as determined by the most recent price in the open market. This is a more traditional metric, commonly used by traders and investors to gauge the overall size of the asset. While many people tend to confuse the two, Ju notes an important distinction: Market Cap does not directly reflect the amount of capital entering the market but rather how the price reacts to buying and selling pressure in the order book. A small buy in a market with low sell pressure can lead to a significant price increase, while large purchases in a market with a lot of sell pressure behind it may struggle to move prices.
Market Cap and Realized Cap Diverging: A Bearish Signal
Ju writes that Bitcoin’s market is a bear market right now. He says that when Realized Cap is rising but Market Cap is stagnating or declining, it signals that actual capital is flowing into the market but is not being reflected in the price of Bitcoin. In other words, even though more money is entering the market, the sell pressure is so high that prices remain unmoved. This is a classic bear market.
It is especially troubling to note that, in the past, times when prices moved very little even as large amounts of investment money were coming in have often been followed by longer-term price declines. Making this observation even more pointed, Ju contrasts it with some previous trading and price situations. In earlier bull markets, when Bitcoin prices have been trading at what turned out to be the last upward price peak (like around the $100,000 mark, for instance), Bitcoin has seen huge trading volumes; however, prices hardly moved at all. When this happens, it’s usually a sign that there are simply too many sellers in the market for Bitcoin right then. In other words, despite larger and larger amounts of cash coming into the system, trading prices hardly show it because sellers are outweighing buyers.
Conversely, a situation where Realized Cap is flat but Market Cap is booming would mean that only a small amount of new capital is needed to drive prices ever higher, which would obviously be a strong bullish signal.
#Bitcoin bull cycle is over — here’s why.
There’s a concept in on-chain data called Realized Cap. It works like this: when BTC enters a blockchain wallet, it's considered a "buy," and when it leaves, it's treated as a "sell." Using this idea, we can estimate an average cost… pic.twitter.com/xDHRin8N1K
— Ki Young Ju (@ki_young_ju) April 5, 2025
But the current data shows the exact opposite: we have Rising Realized Cap and Stagnating or Declining Market Cap, which nerds call a “setup.” And that setup looks very much like a typical bearish market.
Short-Term Rally Unlikely Amid Sell Pressure
Ju’s analysis gains additional support from the outflow of capital from Bitcoin-focused exchange-traded funds (ETFs). On April 4, spot Bitcoin ETFs had a total net outflow of $64.88 million. Not one of the twelve Bitcoin ETFs could report a net inflow. That means institutional investors, who often represent the “smart money” in the market, are not adding to their Bitcoin positions. When large institutional players are not putting more capital to work, it can and often does signal a weakening bullish case for the Bitcoin market.
Even though the present state of affairs is painting a dismal picture for Bitcoin’s short-term outlook, Ju does not believe that this signifies the market’s eternal doom. He points out that historically sufficient time needs to elapse after such signals before a market reversal can be expected. Usually, at least six months must go by following such events before one can even consider the possibility of the kind of bullish momentum typical in past cycles—momentum that has not so far materialized in this instance.
The Takeaway: Bitcoin’s Bearish Conditions May Persist
To conclude, the current bull cycle for Bitcoin seems to have come to an end, according to an assessment by Cryptoquant CEO Ki Young Ju. The data from Ju’s firm supports the idea that while capital continues entering the Bitcoin market, there’s too much sell-side activity preventing price growth. This continuous pressure to sell is something that we’ve only seen recently in the bitcoin market. It isn’t in the long-term interest of Bitcoin holders, as it suggests that we could be in for a rise in bear market conditions.
Today’s trend shows Bitcoin’s health is more aligned with the bearish forecasts many analysts have been making and is far from the bullish forecasts many investors had been hoping for. This serves as a timely reminder of the importance of truly understanding not just how Bitcoin works, but also the fundamentals of on-chain data, and of using that to make approximations of Bitcoin’s probable path forward. No path is etched in stone, and a reversion to an on-chain health scenario for Bitcoin also is a distinct possibility.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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