Foreign media commentators believe that the greater pressure Bitcoin currently faces is not a rapid drop, but rather a prolonged period of sideways trading without clear direction. CryptoQuant CEO Ki Young Ju stated that while a sharp drop often allows for a rebound, sustained stagnation is more likely to erode investor confidence and attract new funds.
After ETFs, the old narrative weakened.
The article states that with the approval of spot ETFs in the US and the continued participation of mainstream financial institutions, Bitcoin's market positioning has changed. Ki Young Ju believes it is increasingly resembling a traditional financial asset, rather than the crisis hedging tool emphasized by its early proponents.
He also mentioned that the multiple narratives the market previously relied on are weakening. Some early participants have moved to other projects, and the new concepts are too complex to be quickly understood by a wider range of funds. In this situation, if Bitcoin lacks a clearer new story, it may be more difficult to maintain liquidity.
On-chain activity is disconnected from price performance.
The article also mentions that CryptoQuant observed a significant divergence: Bitcoin price fluctuations are limited, but on-chain activity is rising. Specifically, small transactions of less than 0.01 BTC now account for approximately 80%, compared to less than half in 2023.
However, this growth is considered to be more driven by technical factors than by new capital inflows. Ki Young Ju believes that increased on-chain noise has not directly translated into price increases, with a large amount of capital remaining on the sidelines, resulting in a disconnect between network activity and market pricing.
Institutional financing models under pressure
The article also extends this risk of sideways movement to the institutional level. Ki Young Ju mentions that the long-term reliance on financing to increase Bitcoin holdings makes it more sensitive to price stagnation. Taking Strategy as an example, its practice of continuously buying Bitcoin may see its market premium on related financing instruments squeezed when there is a lack of price support.
- Small transactions account for approximately 80%.
- In 2023, this proportion was less than half.
- The STRC is trading at $85.32, about 13% below face value.
The article states that Strategy's STRC preferred stock has fallen to $85.32, approximately 13% below par value. Ki Young Ju further warns that if no new catalysts emerge in the market, financing capabilities could be affected, and in extreme cases, it could even force some cryptocurrency holders to sell Bitcoin to cope with debt pressures.
