In a recent statement, Ki Young Ju, CEO of CryptoQuant, proclaimed that the Bitcoin bull market cycle appears to have concluded, as reported by COINOTAG on April 5th. This assessment is grounded in the analysis of a crucial on-chain metric, known as Realized Cap. This sophisticated indicator interprets wallet transactions, marking transfers into wallets as ‘buy-ins’ and those exiting as ‘sell-offs’. By determining the average cost basis relative to the total amount held, stakeholders can derive the network’s realized capitalization, which is distinct from conventional market capitalization calculated by the latest trading price.
The significance of the realized cap lies in its reflection of genuine market activity, contrasting sharply with how minor purchases can inflate market cap without impacting the true valuation influenced by supply and demand. Currently, signs of a bearish trend are evident, characterized by a stagnation or decline in the realized cap despite the influx of funds—a clear indication that market pressures are not conducive for price increases. Historical trends suggest that any potential reversal may require over six months for confirmation, thereby signaling a tenuous environment for investors.