Bitcoin’s Bull Market Cycle Ends: Insights from CryptoQuant’s Ki Young Ju

In a recent post on X, CryptoQuant’s Ki Young Ju has raised concerns about the future of Bitcoin, predicting a bearish or sideways price action for the next 6-12 months. This forecast comes as the BTC bull run appears to be losing steam, primarily due to declining liquidity in the market. Ju emphasized the need for new liquidity, stating, “New liquidity is needed. The on-chain realized cap has stalled, signaling no fresh capital inflows.” This observation is critical as it indicates a potential stagnation in Bitcoin’s price movement.

Market Liquidity and Its Impact on Bitcoin

Ju’s analysis points to significant market trends that could affect Bitcoin’s price trajectory. He noted that BlackRock’s IBIT has experienced three consecutive weeks of outflows, which is a concerning sign for investors. Despite Bitcoin reaching record trading volumes near the $100K mark, its price has shown minimal movement. Ju remarked, “Even with record volume near $100K, Bitcoin’s price barely moved. Without new liquidity to offset heavy selling, this is a bearish signal.” This highlights the importance of liquidity in maintaining price stability and growth in the cryptocurrency market.

Key Valuation Metrics Indicating Bearish Trends

One of the critical metrics Ju discussed is the MVRV Ratio Z-score, which compares Bitcoin’s market value (MV) to its realized value (RV). This metric is instrumental in identifying overbought or oversold conditions in the market. Ju pointed out that the MVRV Z-score has dropped below its 365-day moving average, signaling a weakening price momentum for Bitcoin. Historically, such a trend has aligned with deeper corrections or the onset of bear markets.

Support Levels and Market Dynamics

According to CryptoQuant analysts, the $75K-$78K support level is crucial for Bitcoin’s price stability. As demand for BTC weakens, characterized by slowing whale accumulation and net selling by U.S.-based spot ETFs, the risk of a deeper price correction increases. This trend reflects broader market dynamics that could further exacerbate bearish sentiments.

Broader Economic Context and Its Effects on Crypto

Ju’s insights resonate with warnings from other market experts, including LMAX Group’s Joel Kruger and Coinbase Institutional’s David Duong. Both analysts have cautioned that sustained weakness in U.S. equities, coupled with ongoing economic uncertainty and global tensions, could intensify bearish pressure on cryptocurrency markets. The interconnectedness of traditional financial markets and cryptocurrencies means that developments in one can significantly impact the other.

Conclusion: Preparing for Market Volatility

As Bitcoin navigates this challenging landscape, investors must remain vigilant and informed. The potential for a prolonged bearish phase necessitates a reassessment of investment strategies and risk management practices. Understanding the underlying market dynamics, including liquidity trends and key valuation metrics, will be essential for making informed decisions in the coming months.

For more detailed insights and analysis, you can read the original article on CoinDesk here.