Source: Talking about Li and Talking about the Outside

In the previous article (March 12), we briefly discussed some future trends in the crypto market. Different people may have different thoughts or opinions, and no one can truly predict the future of the market. However, one thing is certain: while market cycles have certain regularities, the market is also constantly evolving.

Looking back at some of our previous articles (for example, those from 2022 and 2023), some viewpoints that we considered reasonable or correct at the time may not seem entirely applicable today.

In this cycle, we have witnessed too many changes or new incredibilities, such as:

1) The MemeCoin Season seems to have replaced the previous Altcoin Season.

2) Bitcoin reached the milestone of $100,000 and has repeatedly broken historical highs, yet the king of altcoins, ETH, has not even surpassed its historical high in this bull market, and the current price of ETH is surprisingly the same as it was four years ago.

3) The number of projects (tokens) has increased exponentially.

For instance, in March 2021, there were a total of 350,000 tokens in the crypto market, while by March 2022, there were 4 million tokens, and by March 2025, the total number of tokens had exceeded 40 million. If this pace continues, it is estimated that by 2026, the number of tokens in the market could exceed 100 million. As shown in the figure below.

4) In 2024, the BTC ETF was finally officially approved, the ETH ETF was also approved, and currently, more ETFs for tokens like DOGE, XRP, LTC, SOL, ADA are under application review (however, the SEC has delayed the approval of these altcoin ETFs, and considering the overall performance of the current market, the probability of approval in the second half of this year may be higher).

5) In 2025, the U.S. will include Bitcoin in its strategic reserve plan (executive order).

6) Institutions are actively accumulating Bitcoin and some altcoins.

Although in the previous cycle, large institutions like Grayscale already existed in the market, and we also experienced the entry of institutions like Tesla, with Musk continuously promoting it, from the start of this cycle, the participation of major institutions has been relatively deeper and broader, such as well-known institutions like MicroStrategy and BlackRock.

Of course, besides Bitcoin, some other altcoins have also begun to attract the favor and layout of certain institutions. For example, WLFI (World Liberty Financial, a DeFi project supported by the Trump family), which has gained attention this year, has been continuously buying ETH, ONDO, MOVE, ENA, LINK, AAVE, and other tokens (some tokens may also be accepted as sponsorship). As shown in the figure below.

In short, we seem to be following the existing historical cycle patterns while continuously witnessing some new differences or new histories.

From an investment perspective, in this cycle, some old investors who insisted on their inherent investment thinking seem to have suffered losses, especially those who focused all their investment strategies on the value of altcoins. A few days ago, I saw a representative report stating that a certain whale built a position in PENDLE eight months ago but seemed unable to hold on until this month and may have already cut losses and cleared their position. As shown in the figure below.

Of course, compared to this old investor's decisiveness, many old investors may still insist on holding onto their altcoins that have already dropped over 80%, putting themselves in a dilemma, such as being unwilling to cut losses directly or feeling unable to recover their investment by switching to Bitcoin… In fact, it is difficult for anyone to make a choice or let go when facing such an outcome. As for what to do, we have already provided some thoughts and suggestions from both long-term and short-term perspectives in our article on March 11. Interested parties can refer back to that article, and I won't elaborate further here.

Setting aside macro factors, in terms of the crypto market itself, from the current overall market environment, it seems that people's (including institutions) attention to Bitcoin (those who have been hurt or not in this cycle seem to have basically turned to long-term focus on Bitcoin) will make it difficult for Bitcoin to experience a dramatic "upward" trend again. Sometimes, excessive attention can create a certain pressure, and this accumulation of "pressure" may make it difficult for Bitcoin's dominance to decline (or even continue to rise), prompting more people to turn to Bitcoin (more and more people are beginning to believe that investing in Bitcoin is better than investing in other altcoins). When Bitcoin experiences a pullback, more and more people will actively step in to buy…

Under the new changes and new models described above, it seems that we can hardly see the traditional concept of an altcoin season (where Bitcoin reaches a certain historical high, its dominance begins to decline, and then altcoins soar together). Since the start of this cycle, what we call the altcoin season seems to have been replaced by the rapid rise and fall of phase-based MemeCoin Seasons, Trump Seasons, AI Seasons, etc. (or we can call it a mini altcoin season).

So, can we still see that traditional "all coins soaring" altcoin season? I believe that such a comprehensive altcoin season is already very difficult. You can't expect 10 million tokens to collectively rise several times or even dozens of times at the same time!

Unless there is a fundamental change in liquidity, that is, a massive influx of new liquidity into the crypto market to support the logic of all altcoins surging together.

However, the mini altcoin season will still appear; it's just a matter of time. If you are still interested in altcoins and do not want to spend too much time and effort on project research or participating in PvP games, then you should focus on digging out those projects with strong fundamentals, such as projects that can continuously generate revenue, have good token economics, and can continue to build and have a development vision… The simplest way is to directly select from the top 100 by market capitalization.

It is foreseeable that in the coming period, liquidity will still be mainly concentrated in BTC and a few altcoins, while most altcoins may face insufficient or continuously decreasing liquidity. The massive number of altcoins (along with numerous VC projects continuously unlocking tokens) will further disperse liquidity. This fundamental issue can only be addressed by patiently waiting for internal innovations (i.e., innovations within the crypto market, but I currently do not see any) and changes in macro factors (such as the expected interest rate cuts in June this year, new policies in the U.S. regarding the crypto industry, etc.) to alleviate the liquidity issues in the crypto market to some extent.

I often remember someone saying: "History does not repeat itself, but it often rhymes."

We need to understand this statement reasonably. The so-called rhyme does not mean that we can just carve a boat to seek a sword. As we mentioned at the beginning of this article, while market cycles have certain regularities, the market is also constantly evolving. Some scenarios from previous cycles may no longer be entirely applicable today. We need to keep up with the times and continuously adapt to and study the new scenarios of the current cycle.

At this stage, opinions are quite divided. Some believe the market has completely entered a bear phase, some think it is just a technical correction (with the biggest bull still ahead), and others believe the bull market has just begun. As for my personal view, I have already shared it in previous articles. I believe there may still be some new opportunities this year (but not widespread opportunities), but I cannot see anything too far in the future. For now, let's look at the possible situations in May and June this year.

Moreover, everyone has a different definition of bull and bear markets. Some believe that as long as it falls below MA200, it is a bear market, while others think that Bitcoin must drop below $50,000 to be considered a bear market… As we mentioned in previous articles, it might be better to simply forget about bull and bear markets. We should focus on and identify a few important stages (such as accumulation - rise - fall - despair - rise - fall - despair - re-accumulation). It is not that one will lose money in a bear market and make money in a bull market. In fact, whether it is a so-called bull or bear market, as long as the market is still there and liquidity remains, opportunities exist. We must both follow the trend and go against it.

That's all for today. The images/data referenced in the text have been added to the Talking about Li and Talking about the Outside Notion. The above content is just personal perspectives and analyses, intended for learning records and communication purposes, and does not constitute any investment advice.

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