
CryptoQuant CEO Ki Young Ju believes that Bitcoin's bull cycle is already over.
Ju's analysis is based on the concept of "realized cap," which measures the total amount of capital entering the Bitcoin market.
When BTC enters a wallet, it is considered a buy (and vice versa). In such a way, it is possible to estimate the average Bitcoin price at which each wallet bought its coins.
The average cost basis gets multiplied by the number of coins in each wallet. This shows how much money is entering the market.
Ju has added that market cap is determined by the last traded price, which is based on the balance of supply and demand on exchanges. When selling pressure is too high, large purchases are incapable of moving the price.
When market cap remains stagnant despise growing realized cap, it is believed to be a typical bearish sign. This is exactly the scenario that is unfolding right now, according to Ju. "Right now, we’re seeing the former—capital is entering the market, but prices aren't responding," he said.
In such market conditions, even large purchases cannot make any difference since major buyers get overwhelmed by sellers. Strategy's massive Bitcoin strategy and GameStop's most recent pivot failed to move the needle.
Unfortunately for Bitcoin buyers, a short-term rally is unlikely to happen in the near future, according to Ju.
"Sell pressure could ease anytime, but historically, real reversals take at least six months—so a short-term rally seems unlikely," Ju added.
Bitcoin is currently trading at $83,006, according to CoinGecko data.