Viewpoint: Bitcoin's 'Realized Cap' Sees Growth But Price Faces Consolidation, Inflows Fail to Boost Asset Price

BlockBeats News, April 5th, CryptoQuant CEO Ki Young Ju stated in a post that he believes the Bitcoin bull market cycle has ended. His judgment is based on a key on-chain metric called "Realized Cap," which operates on the logic that when BTC is transferred into a wallet, it is considered a "buy-in," and when it is transferred out, it is considered a "sell-off." By calculating the average cost basis × holding amount for each wallet, the network's overall "Realized Cap" can be obtained. This indicator reflects the total capital entering the Bitcoin market through real on-chain activities.

The realized cap differs from the market cap based on the last transaction price on trading platforms. When someone buys only $10 worth of BTC, the market cap increase is much more than $10. The price is actually determined by the balance of buy and sell pressure in the order book. In a low sell pressure environment, a small amount of buying pressure can significantly drive up the price. In a high sell pressure environment, even large buy orders struggle to push the price up, as seen in the volume-price deviation when Bitcoin approached $100,000.

To assess the bull and bear cycles, the following framework is used: a bear market signal is when the "Realized Cap" grows but the market cap stagnates or declines, indicating that funds are flowing in but are unable to boost the price, a characteristic of the current market stage. A bull market signal is when the "Realized Cap" remains stable but the market cap surges, indicating that a small amount of new funds can drive the price up. Although there are cases where fund flows are hard to track, the primary capital movement will be reflected on-chain. The current data clearly points to a bear market signal. While the selling pressure may ease at any time, historical data shows that a true trend reversal typically takes at least 6 months, with a low probability of a short-term rebound.