This article may hit hard those brothers who hold expectations for the altcoin season, but it does not sing the blues; I am merely stating facts, and there is basis for this! DYOR
In the days of significant increases, the market funding rate did not rise significantly, Ethereum's ecosystem activities remain sluggish, and gas fees are at a freezing point, with institutional funds for Ethereum ETFs even flowing out.
After several days of violent market increases, Ethereum surged from below $1400 to $2700, nearly doubling, and altcoins and meme coins experienced a long-awaited surge. However, discussions in major communities and media were unusually 'quiet', indicating less participation from retail investors or that recouping costs remains a distant goal.
This rise is similar to the end of last year, both being a compensatory rise after a series of increases in BTC. At the end of last year, driven by favorable news of Trump's campaign for U.S. president, BTC surged from around $70,000 to nearly $110,000. At that time, Ethereum and altcoins experienced a sharp drop in August last year, followed by a three-month bottoming period, with funds rotating upwards, and then continued downward trends, with many experiencing an 80% drop, and altcoins and meme coins hitting all-time lows.
This time, under the unfavorable tariffs waved by Trump, BTC dropped below $75,000, and Ethereum dropped below $1400. Then, as the U.S. trade war eased, the market rebounded. Before and after the tariff agreement between China and the U.S. in Switzerland, Bitcoin broke through $100,000, aiming for historical highs, and then funds rotated to Ethereum, causing a sudden violent surge.
The rapid rise of Ethereum and even altcoins is driven by short-term funds pushing explosive air force leverage, raising prices to unload, with retail enthusiasm being extremely low. Large players and institutions prefer to short; they all have financial strength, and whales are fighting. After Ethereum's surge, the number of open positions in exchanges increased sharply, even approaching the scale when Ethereum was at $4000.
The market driven by explosive air force often lacks sustainability, and the trend of altcoins and meme coins is unlikely to last until the end of the month. The core issue facing VC altcoins: too many in number, continuous unlocking for cashing out, and a cold ecosystem that keeps reinventing the wheel. These problems will persist for a long time, and after more than a year of PVP and harvesting of meme coins and altcoins, there aren't many retail investors left. Institutions and large funds are tightly holding onto BTC, unwilling to hold altcoins for the long term.
After this round of increases, altcoins are likely to drop even more severely.
The core reason for the rebound in U.S. stocks and cryptocurrency this time is the easing of the U.S. trade war, but the predicament of the U.S. facing economic recession and high debt risk has not changed. If the U.S. economy declines in the second half of the year, there won’t be any way out, and it will be especially important to see what kind of monetary policy the Federal Reserve adopts at that time.
Gold and BTC are still hard assets worth paying attention to, while altcoins and meme coins are only suitable for short-term trading, and there is no altcoin season.
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