Metrics Ventures Market Watch: Benign consolidation is coming as expected

Metrics Ventures, a secondary fund in the crypto market, reported on its January market observations:

1/ The climax of the market came to an abrupt end as expected, and the money-making effect in CEX within the month returned to silence again. Most of the undisputed rising targets we mentioned have returned to the starting point of the rise. At present, there is no substantial improvement in the liquidity of the US dollar, and large-scale copycats are still out of reach.

2/ The adjustments of MSTR and BTC within the month are very benign. The low volatility characteristics of Bitcoin in the new cycle mentioned in our previous special report are undoubtedly evident. Even though there is negative news about Silk Road today, the supply of Bitcoin is still not large-scale. The duration of this cycle may exceed the pessimistic expectations of some current market analysts.

3/ The hot sentiment on the chain continues the overflow of CEX funds as always, but there is nothing new under the sun. The lack of money-making effect in CEX will still inevitably affect the duration of this round of DEX market. As of the date of publication of this article, we believe that the overall hype of DEX targets has entered a potential exit period.

Inventory and comments on the overall market situation and market trends:

After we pointed out the short-term risks last month, the market quickly ushered in a short-term correction and risk release. During this period, the maximum retracements of MSTR and BTC were 47% and 15% respectively. Both in terms of proportion and the release of emotions during the decline, they were very healthy and did not affect the flywheel model and upward trend of the two. The undisputed rising targets mentioned above also quickly ushered in a general maximum correction of 40%-60% within 48 hours in mid-December, which was in line with our expectations.

As the main sector to receive funds after the silence of MEME, the on-chain AI sector also welcomed a large amount of active trading funds fleeing CEX. We clearly saw the seesaw effect between the on-site copycat and the on-chain market. However, we did not see significant innovation in gameplay and technology. The industry is still continuing the traditional funding path of theme speculation. Under the condition that the liquidity environment remains unchanged, it is expected that the on-chain market value ceiling will fluctuate like last year's Q2-Q3. Therefore, we believe that a large number of targets have entered the potential exit period.

At the same time, we can make some basic common-sense judgments about 2025 today:

① The existing low volatility rise of the US dollar asset system is unsustainable, and the volatility of US dollar assets will increase significantly in 2025;

② The US dollar system still has no substantial risk of collapse, but the marginal performance pressure of AI supporting the Nasdaq will increase exponentially;

③2025 will still be a very friendly year for crypto assets. What we need to pay close attention to is no longer the macro situation, but the political orientation, and we should pay attention to what Trump says rather than transaction rumors.

Finally, I would like to wish everyone a happy Lunar New Year in advance, and thank you for your continued company. I hope to continue our journey in 2025, and I welcome more exchanges with colleagues and investor friends.