Selling pressure overwhelms new capital inflows; institutional unwinding and the absence of buying interest define the current cycle.

CryptoQuant CEO Ki Young Ju has declared the current bitcoin market a definitive bear cycle, warning that a genuine recovery could take months and may require prices to fall further before a sustainable rebound materializes.

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Capital Inflows Failing to Move the Needle

In an interview with a South Korean crypto outlet, Ju laid out a data-driven case for extended weakness. He pointed to a fundamental imbalance between capital inflows and selling pressure.

“Hundreds of billions of dollars have entered the market, yet the overall market capitalization has either stagnated or declined,” Ju said. “That means selling pressure is overwhelming new capital.”

He noted that past deep corrections have typically required at least three months of consolidation before investment sentiment recovered. Ju emphasized that any short-term bounces should not be mistaken for the start of a new bull cycle.

Two Paths to Recovery

Ju outlined two scenarios for Bitcoin’s eventual recovery. The first involves prices dropping toward the realized price of approximately $55,000. The price is the average cost basis of all bitcoin holders, calculated from on-chain transaction data, before rebounding. Historically, bitcoin has needed to revisit this level to generate fresh upward momentum.

The second scenario envisions a prolonged sideways consolidation in the $60,000 to $70,000 range. The prices would grind through months of range-bound trading before the next leg up.

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In either case, Ki stressed that the preconditions for a sustained rally are not currently in place. ETF inflows have stalled, over-the-counter demand has dried up, and both realized and standard market capitalizations are either flat or declining.

Institutional Exodus Behind the Decline

Ju attributed much of the recent selling to institutional players unwinding positions. As bitcoin’s volatility contracted over the past year, institutions that had entered the market to capture volatility through beta-delta-neutral strategies found better opportunities in assets such as the Nasdaq and gold.

“When bitcoin stopped moving, there was no reason for institutions to keep those positions,” Ju explained. Data from the CME show that institutions have significantly reduced their short positions—not a bullish signal, but evidence of capital withdrawal.

Ju also flagged aggressive selling patterns where large volumes of bitcoin were dumped at market price within very short timeframes. He believes this suggests either forced liquidations or deliberate institutional selling to manipulate derivative positions.

Altcoin Outlook Even Bleaker

The picture for altcoins is grimmer still. Ju noted that while altcoin trading volume appeared robust throughout 2024, actual fresh capital inflows were limited to a handful of tokens with ETF listing prospects. The broader altcoin market cap never significantly surpassed its previous all-time high, indicating that funds were merely rotating among existing participants rather than expanding the market.

“The era of a single narrative lifting the entire altcoin market is over,” Ki said. He acknowledged that structural innovations such as AI agent economies could eventually create new value-driven models for altcoins, but dismissed the likelihood of simple narrative-driven rallies returning.

“Short-term altcoin upside is limited. The damage to investor sentiment from this downturn will take considerable time to heal,” he concluded.

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