CryptoQuant founder: Bitcoin bull cycle is over, reversal will take at least six months

CoinRank News: Ki Young Ju, founder and CEO of CryptoQuant, wrote on the X platform that the Bitcoin bull cycle has ended for the following reasons: There is a concept in on-chain data called realized market capitalization. It works like this: when BTC enters a blockchain wallet, it is considered a buy, and when it leaves, it is considered a sell. Using this idea, the average cost basis of each wallet can be estimated, and multiplied by the number of BTC held to get the total realized market capitalization, which is usually regarded as the total capital entering the Bitcoin market through actual on-chain activities, while the market capitalization is based on the latest trading price on the exchange. When selling pressure is low, even small purchases can push up prices and thus market capitalization. Strategy took advantage of this, and by issuing convertible bonds and using the proceeds to buy Bitcoin, the book value of the Bitcoin they held grew far more than the actual capital invested. But when selling pressure is high, even large purchases cannot change the price, such as when Bitcoin traded near $100,000, the market volume was huge, but the price barely changed. Realized market capitalization shows how much actual money has entered the market, while market capitalization reflects how prices react. If realized market cap is growing but market cap is stagnant or falling, it means that capital is flowing in but prices are not rising - a classic bearish sign. On the other hand, if realized market cap is flat and market cap is surging, it suggests that even a small amount of new capital is pushing prices higher - a bullish sign. We are currently seeing the former, where capital is entering the market but prices are not responding, which is a classic feature of a bear market. In short: when small capital is driving prices higher, its a bull market. When large capital is also unable to drive prices higher, its a bear market. Current data clearly points to the latter. Selling pressure could ease at any time, but historically, a true reversal takes at least six months - so a short-term rebound seems unlikely.