A lot of crypto traders are now wondering – is bull market really over? Why is the crypto market so sluggish lately? When you look at how far away are some altcoins from their respective all-time highs, you will notice those are bear market numbers. For example, PEPE meme coin is down 75% from ATH while Solana is down around 60%.
During the bear market, altcoins are usually down 80 to 90% from their ATH, so we are not quite there yet, but we are getting there if this market performance continues.
Crypto Quant’s CEO Ki Young Ju weighed in on the situation.
What you'll learn 👉
Realized Cap vs. Market Cap
Ki Young Ju believes the Bitcoin bull cycle has ended, and he bases this analysis on a key on-chain metric called Realized Cap. This concept treats Bitcoin entering a blockchain wallet as a “buy” and Bitcoin leaving as a “sell.” This allows analysts to estimate an average cost basis for each wallet.
When you multiply this cost basis by the amount of BTC held, you get the total Realized Cap. Many experts consider this figure to represent the actual capital that has entered the Bitcoin market through verifiable on-chain activity.
This differs significantly from Market Cap, which is calculated based on the last traded price on exchanges. A common misconception is that when someone buys $10 worth of Bitcoin, the market cap only increases by that amount. In reality, prices are determined by the balance between buy and sell pressure in order books.
During periods of low selling pressure, even small purchases can drive the price—and consequently the market cap—significantly higher. Companies like MicroStrategy have leveraged this dynamic by issuing convertible bonds to purchase Bitcoin, resulting in paper gains far exceeding their actual investment.
The Bear Market Signals
The relationship between Realized Cap and Market Cap provides crucial insight into market conditions. When Realized Cap is growing but Market Cap remains stagnant or declines, it signals that money is flowing into the market without corresponding price increases—a classic bear market indicator.
Conversely, when Bitcoin’s Realized Cap stays flat while Market Cap surges, it suggests that minimal new capital is driving prices higher—a bullish sign.
Currently, we’re witnessing the former scenario. Capital continues to enter the market, but prices aren’t responding proportionally. This pattern typically characterizes bear markets.
While some critics argue that on-chain data has limitations in capturing all capital flows, most big movements are reflected on-chain, including exchange activities, custodial wallet transactions, and ETF-related operations.
In essence, when small amounts of capital can drive prices upward, we’re in a bull market. When substantial capital fails to move prices higher, we’re in bear territory. Current data points clearly to the latter situation.
Although selling pressure could ease at any moment, historical patterns suggest that meaningful market reversals typically require at least six months to develop, making a short-term rally unlikely according to Ki Young Ju’s analysis.
Read also: While Bitcoin Sleeps, Kaspa Prepares for the Ultimate Comeback
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