Bitcoin (BTC) Bull Cycle May Be Over: CryptoQuant CEO Warns
Bitcoin’s recent price trajectory has prompted a wave of investor anxiety, with current valuations sinking over 22% from an all-time high of approximately $109,000 recorded on January 20. This downturn has intensified discussions regarding the sustainability of the recent bullish momentum, particularly against the backdrop of declining liquidity inflows.
### Liquidity Slowdown, Whale Sell-Offs
Ki Young Ju, CEO of CryptoQuant, has echoed these concerns in a recent tweet, asserting that Bitcoin’s bull cycle has definitively reached its conclusion. He anticipates a climate of stagnant or bearish price action extending over the next 6 to 12 months as the market adjusts to previous gains. Central to his viewpoint is the trend of “new whales”—large institutional investors—who have begun liquidating their Bitcoin holdings at reduced prices, creating additional downward pressure on the asset. This shift in sentiment, alongside dwindling demand, has cultivated uncertainty throughout the market.
Ju utilized Principal Component Analysis (PCA) to scrutinize a range of on-chain metrics, including the Market Value to Realized Value (MVRV), Spent Output Profit Ratio (SOPR), and Net Unrealized Profit/Loss (NUPL). The analysis indicated significant turning points in Bitcoin’s long-term trend, particularly when examining a 365-day moving average. Observations reveal that Bitcoin’s one-year moving average has succumbed to a downward trajectory, a condition typically correlated with prolonged bear markets. Should historical precedents persist, it is plausible that Bitcoin will remain within a corrective phase for the upcoming months.
### Bitcoin Demand Weakening
Additionally, insights suggest a potential weakening of Bitcoin demand. In 2024, the cryptocurrency experienced two notable demand surges in March and December; however, after the initial peak in March, momentum for demand declined sharply. This pattern mirrors trends observed between August 2017 and December 2018, which often heralded periods of price instability followed by gradual downtrends.
Despite the evolving landscape of market size, trading volume, liquidity, and overall investor interest, indications point towards a sustained decrease in demand for Bitcoin. This scenario poses an intriguing dilemma for both seasoned and new investors as they navigate through fluctuating market conditions and reassess their positions in this volatile asset class.
