Odaily Planet Daily News: CryptoQuant founder and CEO Ki Young Ju stated in an article on X platform that the Bitcoin bull market cycle has ended for the following reasons:
There is a concept in on chain data called realized market value. The working principle is as follows: when BTC enters the blockchain wallet, it is considered a 'buy', and when it leaves, it is considered a 'sell'. Using this idea, the average cost base of each wallet can be estimated, multiplied by the amount of BTC held, to obtain the total realized market value, which is usually considered as the total capital entering the Bitcoin market through actual on chain activities, and the market value is based on the latest trading price of the exchange.
When the selling pressure is low, even small purchases can push up prices, thereby increasing market value. Strategy took advantage of this by issuing convertible bonds and using the proceeds to purchase Bitcoin, resulting in a significant increase in the book value of their Bitcoin holdings that far exceeded the actual capital invested. But when the selling pressure is high, even large purchases cannot change the price, for example, when the Bitcoin trading price approaches $100000, the market trading volume is huge, but the price remains almost unchanged.
The actual market value shows how much actual funds have entered the market, while the market value reflects how prices react. If the actual market value is increasing but stagnating or decreasing, it means that capital is flowing in but prices are not rising - this is a typical bearish signal. On the other hand, if the actual market value remains stable while the market value surges, it indicates that even a small amount of new capital is pushing up prices - this is a bullish signal. What we are currently seeing is the former, where capital is entering the market but prices are not responding, which is a typical characteristic of a bear market.
In short, when small capital drives prices up, it is a bull market. When even large capital cannot drive up prices, it is a bear market. The current data clearly points to the latter. Selling pressure may ease at any time, but historically, a true reversal takes at least six months - so a short-term rebound seems unlikely.
