Bitcoin’s recent price drop below $80,000 has many wondering about the future. Ki Young Ju, CEO of CryptoQuant, believes the bull market is officially over.
The Bear Market Argument
Ju, in a recent post, declared that Bitcoin’s upward trend has ended, predicting bearish conditions for at least the next six months. His analysis centers around two key metrics: Market Capitalization and Realized Capitalization.
Understanding Market Cap vs. Realized Cap
Market Capitalization is simply the current price multiplied by the total number of Bitcoins. It doesn’t reflect the actual amount of money flowing into the market. Realized Capitalization, on the other hand, tracks the actual amount of money entering the Bitcoin market through on-chain activity. It estimates the average cost basis for each Bitcoin by monitoring when coins move between wallets.
Ju explains that during bull markets, small amounts of money coming in cause big price increases – Market Cap skyrockets while Realized Cap stays relatively flat. Currently, even large inflows aren’t moving the price, a key indicator of a bear market.
Charting the Course
A chart from CryptoQuant visually supports Ju’s claim. It shows the growth rate difference between Market Cap and Realized Cap. Red areas represent bearish periods where Realized Cap grows faster than Market Cap. Green areas show bullish periods. Bitcoin is firmly in the red, suggesting a prolonged correction or consolidation phase.
The Bottom Line
Based on this analysis, Ju predicts that Bitcoin’s bear market could last at least six months. The lack of positive price response to significant capital inflows strongly suggests a shift in market sentiment.
