Introduction
On-chain capital inflows into Bitcoin have stalled after 2.5 years of growth, signaling weakening investor sentiment. CryptoQuant’s CEO reveals that the Realized Cap—a measure of total capital invested—has flatlined over the past month. This slowdown suggests the market may need several months to regain bullish momentum, even as the BTC price recovers to $89,800.
Key Points
- Bitcoin's Realized Cap—calculated from the last transaction price of each coin—has stalled after 2.5 years of growth, indicating reduced capital inflows.
- CryptoQuant's PnL Index 365-day MA peaked earlier in 2025, signaling potential overvaluation, and has since reversed downward though remains in positive territory.
- Historical patterns suggest such drawdowns often precede bear markets, though exceptions occurred after the COVID crash and early 2025 decline.
The Stalling of Bitcoin's Realized Cap
Ki Young Ju, the founder and CEO of on-chain analytics firm CryptoQuant, has revealed a significant shift in Bitcoin’s market dynamics. According to his analysis, the Bitcoin Realized Cap, a key on-chain metric, has stalled over the past month. This follows approximately 2.5 years of consistent growth. The Realized Cap is a sophisticated capitalization model that calculates Bitcoin’s total value by assuming each coin is worth the price at which it was last transacted on the blockchain. This price effectively represents the coin’s current cost basis for its holder. Therefore, the Realized Cap aggregates the total capital investors have used to purchase their Bitcoin tokens. Its recent stagnation directly indicates a sharp drop-off in new capital inflows into the Bitcoin network.
The significance of this stall cannot be overstated. For over two years, the Realized Cap climbed steadily, reflecting continuous investment and accumulation. Its current plateau suggests that the influx of new money has weakened considerably. As Ki Young Ju noted, this development points to a clear decline in investor sentiment around Bitcoin. When capital stops flowing in at previous rates, it often signals that buyers are becoming more cautious or that demand is waning, creating a potential headwind for price appreciation.
PnL Index Signals a Reversal from Overvaluation
The turnaround in market sentiment is further corroborated by CryptoQuant’s proprietary PnL Index. This index incorporates several crucial on-chain indicators—namely the MVRV Ratio, NUPL (Net Unrealized Profit/Loss), and the Short-Term Holder/Long-Term Holder Spent Output Profit Ratio (STH/LTH SOPR). These metrics collectively measure the scale of unrealized profit or loss across the investor base and track profit-taking behavior. By combining them, the PnL Index creates a single valuation metric for BTC.
A chart shared by Ki Young Ju shows the trend in the 365-day moving average (MA) of this Bitcoin PnL Index. The graph reveals that the index’s 365-day MA reached a high earlier in the year, a peak that historically implies the asset had become potentially overvalued. Since that peak, the metric has undergone a clear reversal to the downside. While its value remains notably positive—a territory historically associated with bullish phases—the downward trend is a cautionary signal. Historically, such drawdowns in the PnL Index’s long-term average have often preceded broader bear markets, though there have been notable exceptions.
Historical Context and the Path to Recovery
Examining historical patterns provides context for the current on-chain data. Drawdowns in the 365-day MA of the PnL Index have typically led to bearish periods. However, Ki Young Ju’s analysis highlights two key instances where this pattern did not hold: the market recovery following the COVID-19 crash in 2020 and a decline observed in the early months of 2025. These exceptions show that while the indicator is powerful, it is not infallible.
As of now, the PnL Index has not shown signs of turning back upward. It is critical to remember that as a 365-day moving average, the indicator inherently carries a lag, smoothing out short-term volatility to reveal longer-term trends. Based on the confluence of a stalled Realized Cap and a declining PnL Index trend, Ki Young Ju’s assessment is measured: “Sentiment recovery might take a few months.” This suggests that even if price action shows temporary strength, the underlying on-chain fundamentals may need a more extended period to rebuild momentum.
This analysis arrives as Bitcoin’s price shows resilience, recovering from last week’s plunge to trade back at approximately $89,800. This price recovery, however, stands in contrast to the cooling on-chain capital flows and valuation metrics. The divergence highlights a critical narrative for investors: short-term price bounces can occur, but sustained bullish momentum requires a resurgence in new capital investment, as tracked by metrics like the Realized Cap. Until these on-chain fundamentals show a definitive turnaround, the market may face extended consolidation or bearish pressure as sentiment gradually repairs itself.
📎 Related coverage from: newsbtc.com
