Bitcoin Bull Run in Balance: Analysis Suggests Need for New Demand for Price Rise

The on-chain situation of Bitcoin exhibits a rare combination of significant gains among various holders, rising realized capitalization, and record network hashrate. All this without the price-raising euphoria that typically marks the end of a bull market. This is the key message of Ki Young Ju, CEO of CryptoQuant, in his latest analysis, which examines holders' cost bases, cohort profitability, the impact of leverage, and the role of ETFs and corporate reserves in market dynamics.

The key figures are startling at first glance. “The average cost base of Bitcoin wallets is $55,9K, meaning holders are making an average profit of around 93%,” Ju writes. Realized capitalization rose by around $8 billion this week, clearly indicating that on-chain inflows remain strong. This realized capitalization, an alternative valuation metric that values ​​coins based on their last transaction price rather than the current market price, has historically served as a proxy for real capital in motion. The continued rise suggests that higher cost bases are being established even as the spot price stagnates.

So why didn't the price rise immediately? Ju argues that this is easily explained: "The price didn't rise due to selling pressure, not because demand was weak." This explanation aligns with a market that's absorbing profits, with liquidity providers and profitable holders selling in strong markets. This also helps explain why there's healthy inflows, while the price is hovering around its current value of $110.000.

Where marginal demand comes from and where it's dissipating is crucial. Ju points out that "new inflows are mainly coming from ETFs and Bitcoin holdings, while CEX traders and miners are making around 2x returns." He broke down the estimated cost bases and performance as follows: "ETFs/Custodial Wallets: $112K (-1%), Binance Traders: $56K (+96%), Miners: $56K (+96%), Long-term Whales: $43K (+155%). Current price: $110K."

If these estimates are correct, short-term institutional buyers are nearing breakeven, while long-term holders are realizing attractive profits. This distribution mitigates the risks of forced selling at the top, but also counteracts the kind of fresh momentum that normally occurs when new buyers actively capture profits. Ju points out that in clear bull phases, market cap often exceeds realized capitalization, generating a growing “valuation multiplier effect.” “About $1T of on-chain inflow has created a $2T market cap. The gap currently appears moderate.” A moderate gap is an ambivalent message: clearly not extreme, but also not the exuberant expansion that brings cycle closures. This aligns with Ju’s observation about the position of large holders: “The unrealized profits of whales are not extreme.” This scenario can be interpreted in two ways; Either “the hype isn't there yet—the euphoria is still a long way off,” or “this time it's different—the market is too big for extreme win ratios.”

The market's structural microstructure further contributes to the story. Ju highlights a "sharp" decline in BTC shifting from spot-oriented markets to futures exchanges—a sign that “whales are no longer opening new long positions with BTC collateral as before.” If the marginal long position no longer puts coins into the bid, the market loses a mechanical source of bidding intensity and convexity from tied positions. Yet, leverage itself hasn't reset: “Bitcoin perpetuals' leverage remains high despite recent wipeouts,” Ju writes, pointing to ratios such as the open position of BTC-USDT perpetuals relative to USDT balances on exchanges and the total USDT market cap.

Simply put, the conviction in long positions in BTC appears to be less eroded, but system-wide leverage, as projected by perpetuals, remains higher than two years ago. This combination could suppress clean trends: fewer leveraged long positions to chase upside, but sufficient leverage to trigger fluctuating liquidations.

The hashrate and industry supply trends further complicate the story. “The Bitcoin hashrate continues to reach new highs (~5,96M ASICs online). Public miners are expanding, not contracting, which is a clear long-term positive signal. The Bitcoin ‘money vat’ continues to grow.” A rising hashrate plus expanding public miners typically indicates forward investment and confidence in long-term revenue from fees and subsidies. However, this doesn't guarantee a near-term price increase; it can even increase the need for miners' treasury management, which creates price-neutral interactions with market liquidity in the absence of new demand.

New Question Needed for Impulse

According to Ju, demand is currently dominated by two channels: “Demand is now primarily driven by ETFs and strategies, both of which have recently reduced their purchases. If these two channels recover, market momentum would likely return.” This is a clear, falsifiable proposition: if the primary institutional channels accelerate again, the spot price should regain momentum; if they remain too sluggish, realized capitalization could continue to rise with constant inflows, while the price fluctuates as distribution absorbs them.

Moreover, cohort profitability provides an additional boundary for various scenarios. “Short-term whales (primarily ETFs) over the past six months are near breakeven. Long-term whales are on average ~53% in the green,” Ju explains. Historically, price peaks have often coincided with extreme unrealized profit ratios for dominant cohorts, creating structural selling pressure as each marginal increase releases significant profits.

Ju is saying that we're not there yet. At the same time, he warns that the market system may already be decoupled from the traditional four-year cycle: "In the past, the market moved in a clear four-year cycle of accumulation and distribution between retail investors and whales. Now it's harder to predict where and how much new liquidity will enter, making it unlikely that Bitcoin will follow the same cyclical pattern again."

In summary, the analysis paints a market with three key characteristics. First, the fundamentals of "money in" appear resilient: rising realized capitalization, holders are generally profitable, and network security is reaching new heights. Second, the microstructure is unspectacular and even somewhat cautionary: fewer whales are initiating BTC-collateralized long positions, while systemic leverage remains high enough to disrupt clean moves. Third, demand research is concentrated in ETF and corporate reserves that have recently weakened—the same players whose renewed acceleration could ignite momentum.

Frequently Asked Questions

Why hasn't Bitcoin's price risen despite increased realized capital?
The price hasn't risen due to selling pressure from holders taking profits, not because of a lack of demand. This indicates that the market is currently absorbing profits without the necessary new buyers that would initially support the price.

What are the main trading channels for Bitcoin and where does the demand come from?
Demand is primarily coming from ETFs and Bitcoin holdings. These channels have recently reduced their purchasing activity, contributing to the price stagnation. Renewed growth in these sectors could revitalize market momentum.

What does on-chain data say about Bitcoin holders' profitability?
On-chain data indicates that short-term holders, often ETFs, are trading around their breakeven point, while long-term holders are averaging a 53% gain. This reduces the likelihood of selling pressure, as long as selling prices don't reach extremes that could lead to position liquidation.