Bitcoin Is Unlikely to Drop by 50%, But There's a Disconcerting Aspect, According to Leading Analyst

Recent insights from Ki Young Ju, CEO of CryptoQuant, indicate that while Bitcoin is not expected to crash by 50% this time, the situation presents its own challenges. The landscape of Bitcoin investment is shifting, primarily due to the influence of long-term institutional holders. This change is leading to a stable yet potentially dull market, rather than the volatility seen in previous cycles.

Key Takeaways

Leading analyst Ki Young Ju believes Bitcoin will not experience a 50% drop.
The current market is heavily influenced by long-term institutional investors, reducing volatility.
Traditional trading strategies based on market signals are becoming less effective.
Bitcoin may enter a prolonged period of stability rather than extreme fluctuations.
Shorting Bitcoin now poses high risks with limited potential rewards.

Understanding the Current Bitcoin Market Dynamics

Ki Young Ju, who heads CryptoQuant, reassures investors that a 50% crash in Bitcoin’s value is not on the horizon. However, this does not mean that the market conditions are favorable. According to Ju, traditional strategies that relied on monitoring inflow spikes or anticipating crashes driven by large holders are becoming obsolete.

Ju highlights that the current cycle of Bitcoin is dominated by long-term institutional investors, such as Michael Saylor's Strategy (formerly MicroStrategy), which possesses 673,000 BTC without any intention of selling. This scenario creates a lack of the chaotic volatility that characterized previous bear markets.

Market Dynamics Source: Ki Young Ju

This shift in a structural framework diminishes the predictive power of on-chain signals that traders previously relied on, including the four-year market cycle. The cryptocurrency market faces a new norm where Bitcoin may transition into a lengthy phase of dullness instead of experiencing the usual panic or euphoria. Ju anticipates that we won't see a 50% decline akin to what happened in 2018 or 2022.

Interestingly, Ju points out that liquidity hasn't evaporated; it has simply flowed into different sectors. Assets like equities and what Ju refers to as "shiny rocks"—a term he uses for gold and silver—are currently attracting investors' attention.

The data on realized cap shared by Ju supports this perspective. The green-marked upward trends since early 2024 have persisted, despite the relatively stable spot prices. This metric tracks the total cost basis of circulating coins and appears to have detached from speculative selling activities.

In conclusion, these dynamics suggest that Bitcoin prices are more likely to experience sideways movements instead of a significant collapse. For bearish investors, Ju conveys that betting against Bitcoin at this stage carries high risk with limited rewards. A big crash is unlikely, not due to an overheated market, but rather because the environment is too stable to spark a dramatic shift.