The Bitcoin market has been closely analyzed by a CryptoQuant analyst named Percival, who recently provided insights into Bitcoin’s realized market cap and net capital flows.
The realized cap is a metric that tracks each Bitcoin (UTXO) as it last moves through the network, representing the cost basis of all coins in circulation. This metric helps understand whether there is a net inflow or outflow of capital into the Bitcoin market.
Bitcoin’s ceiling stagnates
According to Percival in a recent post on the CryptoQuant QuickTake platform, at present, the realized market cap of BTC stands at $461 billion, reflecting a modest increase of $3 billion, or 0.66%, indicating little movement and a stagnant net inflow of capital.
To understand what this stagnation means for BTC, Percival identifies three key phases of Bitcoin market cycles. The analyst revealed that the realized ceiling stops increasing during market peaksindicating a shift from profit to loss.
Long-term holders (HODLers) determine the market floor during bear market rallies, leading to a steady flow of capital into BTC. Finally, during bull market ralliesHODLers who accumulated at lower prices often profit when the market approaches all-time highs.
Considering these points, Percival mentioned that the current realized cap suggests that BTC is in a recovery phase. Nevertheless, the net capital inflow, which remains stagnant, signals a cautious outlook for the near future.
The analyst reveals that the market capitalization achieved by Bitcoin is showing signs of a recovery phase, characterized by balanced capital flows between long-term holders (HODLers) and short-term investors (STH).
This phase generally indicates that the market is neither in a clear uptrend nor downtrend, but rather in a state of equilibrium. Percival mentioned that net capital inflows since August have been almost non-existent, suggesting that the market is in a state of liquidity neutrality.
Net Inflows and Inflection Point in Bitcoin’s Realized Cap!
Net investor inflows since August, now at $461 billion, are recovering but have barely increased. This shows that the inflow of new capital remains stagnant. – By @p_rcival
Link 👇… pic.twitter.com/QL1qSlVMkS
— CryptoQuant.com (@cryptoquant_com) September 17, 2024
This stagnation implies that the profit made by HODLers is roughly equivalent to the losses suffered by the best buyers.
What’s next?
The analyst stresses the need for a significant movement in Bitcoin price in the next 30 days to break this neutrality.
Without such a move, the market could continue to experience minimal capital flow, leading to a prolonged period of consolidation.
A key indicator to watch in this scenario is realized net profit, which if trending towards the value of 1 would indicate a balanced market, perhaps paving the way for the next significant market move.
Featured image created with DALL-E, graphic by TradngView
