#Bitcoin bull cycle is over — here’s why. There’s a concept in on-chain data called Realized Cap. It works like this: when BTC enters a blockchain wallet, it's considered a "buy," and when it leaves, it's treated as a "sell." Using this idea, we can estimate an average cost basis for each wallet. Multiply that by the amount of BTC held, and you get the total Realized Cap. It’s often seen as the total capital that has entered the Bitcoin market through actual on-chain activity. Market Cap is based on the last traded price on exchanges. Many people misunderstand this concept. When someone buys just 10 worth of BTC, the market cap doesn’t increase by only 10. Instead, prices are determined by the balance between buy and sell pressure in the order book. When sell pressure is low, even a small buy can push the price—and therefore the market cap—significantly higher. MSTR took advantage of this. By issuing convertible bonds and using the proceeds to buy BTC, the paper value of their holdings grew far more than the actual capital they deployed. But when sell pressure is high, even large purchases fail to move the price. There are simply too many sellers. For example, when Bitcoin was trading near 100K, the market saw massive volumes, but the price barely moved. So how can we tell if market cap is likely to rise relative to the capital being invested? Realized Cap shows how much actual money is entering the market, while Market Cap reflects how the price is reacting. If Realized Cap is growing but Market Cap is stagnant or falling, it means capital is flowing in, but prices aren’t rising—a classic bearish signal. On the flip side, if Realized Cap is flat while Market Cap is surging, it suggests that even a small amount of new capital is driving prices higher—a bullish sign. Right now, we’re seeing the former—capital is entering the market, but prices aren't responding. That’s typical of a bear market. Some people argue that on-chain data has limitations in capturing all capital flows, but in reality, most major flows are reflected on-chain—whether it's exchange deposits and withdrawals, custodial wallet activity, or ETF-related transactions. In short: when small capital drives prices up, it's a bull market. When even large capital can't push prices upward, it's a bear. Current data clearly points to the latter. Sell pressure could ease anytime, but historically, real reversals take at least six months—so a short-term rally seems unlikely.