- Bitcoin’s Realized Cap rises while Market Cap stagnates, signaling bearish momentum and reducing the likelihood of a short-term rally.
- High sell pressure prevents price surges despite new investments, mirroring past cycles where bearish trends lasted for months.
- Historical data show bull cycles end when Realized Cap outpaces Market Cap growth, suggesting Bitcoin may face prolonged corrections.
Bitcoin’s bull cycle appears to be over, with key on-chain metrics pointing toward bearish conditions according to Ki Young Ju analysis. The Realized Cap, which tracks actual capital entering the market, is rising while Market Cap remains stagnant. This divergence suggests large capital inflows are failing to drive prices higher. Historically, this pattern signals bearish momentum, making a short-term rally unlikely. Besides, sell pressure remains high, preventing Bitcoin from surging despite new investments.
Understanding the Realized Cap and Market Cap Relationship
Realized Cap measures Bitcoin’s total value based on actual transactions. When BTC enters a wallet, it is counted as a buy. When it exists, it is seen as a sell. This method helps determine the total capital invested in Bitcoin. In contrast, Market Cap is based on the last traded price on exchanges. Small buy orders can push Market Cap significantly higher if sell pressure is low. However, when sell pressure is high, even large purchases fail to move the price.
MicroStrategy leveraged this principle by issuing convertible bonds to buy Bitcoin. This strategy inflated their holdings’ paper value beyond the actual capital deployed. However, in a bearish phase, even massive capital inflows cannot sustain price gains. Bitcoin’s inability to break new highs despite growing Realized Cap indicates a strong bearish trend.
Historical Cycles Indicate Prolonged Bearish Period
Historical data show that there are distinct bull and bear cycles in the movement of Bitcoin. The market capitalization of Bitcoin saw a bull period between 2012 and 2014, rising from millions to over $10 billion. But in 2015, a severe bear market ensued. Before seeing another decline in 2018, the pattern was repeated in 2016–2017, sending Bitcoin past $100 billion.
Between 2020 and 2021, as the market capitalization of Bitcoin approached $1 trillion, it had its most rapid expansion. However, there was a notable negative divergence between Market Cap and Realized Cap during the bad market of 2022. By 2023, Bitcoin began recovering, showing renewed positive growth. Yet, current data for 2024-2025 indicates stabilization above $1 trillion rather than sustained upward momentum.
Moreover, Realized Cap continues rising while Market Cap stagnates, reinforcing the bearish outlook. Historically, reversals take at least six months, making a short-term bull run unlikely. Consequently, investors should anticipate prolonged market corrections before any meaningful price recovery occurs.
