Viewpoint: Bitcoin has achieved a rise in market capitalization but the real market capitalization is stagnant, making it difficult for capital inflows to boost asset prices.

On April 5, Ki Young Ju, CEO of CryptoQuant, posted that the end of the Bitcoin bull market cycle is judged based on the realized market value (Realized Cap), a key indicator of on-chain data, and its operating logic is that when BTC is transferred to a wallet, it is regarded as “buying”, and when it is transferred out, it is regarded as “selling”, and the realized market value of the whole network can be obtained by calculating the average cost basis of each wallet × holdings, which reflects the total amount of capital entering the Bitcoin market through real on-chain activities. The true market capitalization is different from the market capitalization based on the last traded price on the trading platform, when someone buys only $10 of BTC, the market capitalization increases by much more than $10, and the price is actually determined by the balance of buying and selling pressure in the order book. A small amount of buying can significantly push the price up in a low selling pressure environment, and it is difficult to pull up the price even if you buy a large amount in a high selling pressure environment, such as the volume-price divergence that occurs when Bitcoin approaches $100,000. For bull and bear cycles, based on the following judgment framework, the bear market signal is that the market value growth has been achieved but the market value has stagnated or fallen, which means that the inflow of funds cannot push the price up, which is the characteristic of the current market stage. A bull market signal is that the realized market value is stable but the market value has skyrocketed, and a small amount of new money can drive the price increase. While some flows are difficult to track, major capital flows are reflected on-chain, and the current data clearly points to a bearish signal, and while selling pressure may ease at any time, historical data shows that a true trend reversal will take at least 6 months, with a low probability of a short-term rally.