Source: Talking about Li and other things
In the previous article (March 12), we briefly talked about some issues regarding the future direction of the crypto market. Different people may have different ideas or opinions, and no one can really predict the future of the market, but one thing is certain, that is, although there is a certain regularity in the market cycle, the market is also constantly evolving.
In fact, looking back at some of our previous articles (such as articles published in 2022 and 2023), some of the views that we thought were more reasonable or correct at the time may not seem to be completely applicable when we look at them today.
In this cycle, we have witnessed too many changes or new wonders, such as:
1) MemeCoin Season seems to have replaced the previous Altcoin Season.
2) While Bitcoin has reached the milestone of $100,000 and has broken its historical highs many times, the king of altcoins, ETH, has not even exceeded its historical high in this bull market, and the current price of ETH is actually the same as it was 4 years ago.
3) The number of projects (tokens) increases exponentially.
For example, there are 350,000 tokens in the crypto market in March 2021, 4 million tokens in March 2022, and more than 40 million tokens in March 2025. If the current growth rate continues, it is estimated that the number of tokens in the market may exceed 100 million by 2026. As shown in the figure below.
4) In 2024, BTC ETF was finally officially approved, ETH ETF was also approved, and more ETFs such as DOGE, XRP, LTC, SOL, ADA, etc. are currently applying for review (however, the SEC has now postponed the approval of these altcoin ETFs. Combined with the overall performance of the current market, the probability of approval in the second half of this year may be greater).
5) The United States will add Bitcoin to its strategic reserve program in 2025 (executive order).
6) Institutions are actively accumulating Bitcoin and some altcoins.
Although in the last cycle, there were already large institutions such as Grayscale in the market, and we have also experienced the entry of institutions such as Tesla, and Musk has continued to milk orders, but starting from this cycle, the participation of major institutions has been relatively deeper and broader, such as the well-known MicroStrategy, BlackRock and other large institutions.
Of course, in addition to Bitcoin, some other altcoins have also begun to be favored and deployed by some institutions. For example, WLFI (World Liberty Financial, a DeFi project supported by the Trump family), which has attracted much attention since this year, has been buying (it is not ruled out that some tokens are sponsored) ETH, ONDO, MOVE, ENA, LINK, AAVE and other tokens since this year. As shown in the figure below.
In short, we seem to have been following the existing historical cycles while constantly witnessing some new differences or new history.
From an investment perspective, some old investors who stick to their inherent investment thinking seem to have suffered losses in this cycle, especially those who insist on focusing all their investment on the value investment strategy of altcoins. A few days ago, I saw a more representative report saying that a whale built a position in PENDLE eight months ago, but it seemed that it could not hold on until this month, and may have sold out at a loss. As shown in the figure below.
Of course, compared to the straightforwardness of the old man above, many old investors may still insist on holding on to their altcoins that have fallen by more than 80%, which puts them in a dilemma. For example, they are unwilling to sell at a loss, and they feel that they cannot make back their investment if they switch to Bitcoin... In fact, it is difficult for anyone to make a choice or give up when facing such an outcome. As for what to do, we have already given some of our own thoughts and suggestions from long-term and short-term perspectives in the article on March 11. Interested partners can directly go back to the corresponding article, and I will not go into details here.
Let’s put aside the macro factors here. As for the crypto market itself, judging from the current overall market environment, it seems that people’s (including institutions’) attention to Bitcoin (people who have been hurt or not hurt in this cycle seem to have basically changed their plans to pay long-term attention to Bitcoin) will hardly lead to another sharp “rise” in Bitcoin, because sometimes excessive attention will form a certain pressure, and the accumulation of this “pressure” may make it difficult for Bitcoin’s dominance to decline (it may even continue to rise), prompting more people to turn to Bitcoin (now more and more people have begun to believe that investing in Bitcoin is better than investing in other altcoins), and when Bitcoin pulls back, more and more people will actively take over…
With the new changes and new market models as described above, it seems that we will hardly see the traditional altcoin season (that is, after Bitcoin reaches a certain historical high, its dominance will begin to decline, and then there will be a scene where thousands of altcoins are flying together). Starting from this cycle, the so-called altcoin season seems to have been replaced by the rapid rise and fall of the periodic MemeCoin Season, Trump Season, AI Season and other sector-specific altcoin seasons (or we can call them mini altcoin seasons).
So, can we still see the traditional alt season of "all the coins soaring"? I think this kind of comprehensive alt season is already difficult. You can't let 10 million tokens rise several times or even dozens of times at the same time!
Unless there is a fundamental change in liquidity, that is, a massive amount of liquidity (new money) flows back into the crypto market to support the logic that all altcoins can skyrocket together.
But the mini altcoin season will still appear, it is just a matter of time. If you are still interested in altcoins and don’t want to spend too much time and energy on project research or participating in PvP games, then just focus on exploring projects with strong fundamentals, such as projects that can generate continuous income, projects with good token economics, projects that can be continuously built and have development vision... The easiest way is to directly choose from the top 100 projects by market value.
It is foreseeable that in the next period of time, liquidity will still be mainly concentrated in BTC and a few altcoins. The liquidity of most altcoins may face the problem of insufficient or continuously decreasing. The massive amount of altcoins (plus there are many VC projects that are constantly unlocking tokens) will make liquidity more dispersed. For this fundamental problem, we can only continue to wait patiently for internal innovation (that is, innovation within the crypto market, but I can’t see it for the time being) and some changes in macro factors (such as the expectation of interest rate cuts in June this year, this year’s new US policies for the crypto industry, etc.), so as to alleviate the liquidity problem in the crypto market to a certain extent.
I remember someone often said this: History does not repeat itself, but it often rhymes.
We need to understand this sentence reasonably. The so-called rhyme does not mean that we can just follow the old ways. As we said at the beginning of this article, although there are certain regularities in the market cycles, the market is also constantly evolving. Some scenarios in previous cycles may no longer be fully applicable at present. We need to keep pace with the times and constantly adapt to and study new scenarios in the current cycle.
At this stage, people's opinions are quite divided. Some people think that the market has completely started to go bearish, some people think that it is just a technical correction (the biggest bull market is still to come), and some people think that the bull market has just begun. As for my personal opinion, I have actually shared it in the previous series of articles. I think there may be some new opportunities this year (but not large-scale opportunities), but I can't see things too far ahead. For now, let's look at the possible situation in May-June this year.
Moreover, everyone has a different definition of bull market and bear market. Some people think that as long as it falls below MA200, it is a bear market, and some people think that it is a bear market only when Bitcoin falls below 50,000... As we said in our previous article, it is better to simply forget about the bull market or the bear market. We only need to pay attention to and identify a few important stages (for example, accumulation - rise - fall - despair - rise - fall - despair - re-accumulation). It does not mean that you will lose money in a bear market and make money in a bull market. In fact, no matter it is the so-called bull market or bear market, as long as the market is still there, as long as the liquidity is still there, then the opportunity is there. We must both follow the trend and go against the trend.
That’s all for today. The sources of the images/data cited in the text have been added to Notion. The above content is only personal opinion and analysis, and is only for learning records and communication purposes, and does not constitute any investment advice.
