Analysis of Bitcoin Inflow Slowdown: CryptoQuant CEO Predicts Long Road to Sentiment Recovery

The CEO and founder of the on-chain analytics company CryptoQuant has pointed out a slowdown in Bitcoin's capital inflows over the past couple of months.

Key Takeaways

Bitcoin's capital inflows have recently slowed, indicating a possible decline in market sentiment.
The "Realized Cap" is an important metric that helps assess Bitcoin's valuation based on its last transaction prices.
The PnL Index suggests that while Bitcoin is currently still in a positive phase, historical patterns indicate that sentiment recovery could take months.
Bitcoin's price has rebounded to approximately $89,800 after last week's decline.

This information provides valuable insights for both seasoned investors and newcomers interested in understanding the current state of Bitcoin and its market dynamics.

Bitcoin

Recent Trends in Bitcoin's Realized Capital

In a recent post on X, Ki Young Ju, the CEO of CryptoQuant, discussed how the inflow of capital into Bitcoin has weakened as of late. He mentioned, "After about 2.5 years of growth, realized cap has stalled over the past month." The term “Realized Cap” refers to a model for assessing Bitcoin’s on-chain capitalization. It calculates the total value of Bitcoin by assuming that each coin's worth is equal to the price at which it was last traded on the blockchain.

Since the last transaction of any Bitcoin is likely to reflect its most recent value, this price serves as its current cost basis. As such, Realized Cap represents the total of all cost bases across the entire BTC supply, effectively tracking the capital that investors used to buy their tokens.

Though Realized Cap had been increasing consistently over the last few years, it has recently taken a downturn, indicating a drop in sentiment towards Bitcoin.

This change in sentiment is also evident through CryptoQuant’s Profit and Loss (PnL) Index, which combines important on-chain indicators to create an overall valuation metric for BTC. The key indicators include the MVRV Ratio, Net Unrealized Profit/Loss (NUPL), and Short-Term Holder/Long-Term Holder Spent Output Profit Ratio (STH/LTH SOPR). While the first two indicators focus on unrealized profits or losses held by investors collectively, the latter offers insights into when investors are taking profits.

Below is a chart shared by Young Ju that illustrates the trend of the Bitcoin PnL Index’s 365-day moving average.

Bitcoin PnL Index

The data indicates that the PnL Index’s 365-day moving average peaked earlier this year, suggesting that Bitcoin may have reached an overvalued state. Since that peak, the index has experienced a downward reversal. Although the current value remains positive, indicating a potentially bullish phase for the cryptocurrency, historical patterns show that such downturns often lead to bear markets.

There were some exceptions, notably after the COVID market crash and during the price decline in early 2025. While the PnL Index has not yet indicated a resurgence, it's crucial to understand that this metric represents an average over the past year and, therefore, may have some lag time.

From the observations made on-chain, Young Ju commented, “Sentiment recovery might take a few months.”

Bitcoin's Current Price Status

After experiencing a downturn last week, Bitcoin's price has rebounded and is currently trading at $89,800.

Bitcoin Price Chart

The chart above shows the price trend of Bitcoin over the last five days.