Current cycle of the crypto market: a panoramic observation from a data perspective

Today we observe the crypto market from a data perspective, analyzing what stage the overall market is currently in.

1. The US stock market continues to rise strongly, yet the crypto market remains unmoved?

After the US stock market opened last night, the three major indices continued to hit new highs. Although the increase was not large, around 0.5%, it represents that the overall US stock market is still strong, with most individual stocks still in an upward trend — this has marked the fifth consecutive trading day of increases in the US stock market, forming a pattern of 'five consecutive bullish candles'.

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However, in stark contrast, the crypto market is almost 'motionless', even experiencing a slight decline during the day. Bitcoin fell about 1%, and Ethereum dropped about 0.6%. This raises a key question:

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Why has the crypto market not continued to follow the rise of the US stock market recently?

2. Strong inflow of ETF funds, yet the crypto market remains stagnant

To further answer the above questions, let's first look at the ETF data:

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From the perspective of ETFs, market funds are still continuously flowing into crypto assets, which should be a strong bullish signal. However, the market has not risen accordingly, which may have other reasons behind it.

3. Derivative and spot trading data: market liquidity is declining

Let's take a look at the trading activity data again.

Currently, the trading volume of derivatives (contracts) at the top three exchanges is as follows:

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However, the trend shows: overall trading volume is gradually declining. The spot market is more obvious, as the daily average trading volume (MA) trend from multiple data sources indicates that current trading activity is close to the low period of July-August 2024.

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That period was the most desolate and despairing phase of the market: nobody spoke in the group, and the mood was generally low. The current market atmosphere is very similar to that time — this means that the current market is in an extremely 'quiet period', with active funds clearly reduced.

4. Why can Bitcoin's price remain strong? Why are altcoins under continued pressure?

Despite the market being quiet, Bitcoin's price remains at a relatively high level, largely thanks to the bottom support provided by the continuous inflow of ETFs.

In contrast, altcoins, which lack the 'bottom support' from ETF funds, are clearly 'unable to hold on', facing widespread selling pressure. This is also what I have repeatedly emphasized: in the absence of incremental capital inflows, the altcoin market will continue to be under pressure.

Regarding macro interest rate policies, we need to pay attention to the latest statements from Federal Reserve officials:

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This also means that: for the next two months, the market may still not be too easy.

6. How should we respond?

Although the current market activity is extremely low, please remember:

Real opportunities often appear at moments when most people 'see no hope'.

Just like the panic low period in July-August 2023, if someone had dared to position against the trend at that time, they would have reaped considerable returns now. At this time, we should remember that classic saying:

'Be greedy when others are fearful.' — Warren Buffett

However, is this moment really one of 'extreme fear'? I fear not yet. Because the crypto fear and greed index is still at a neutral position of 50, not yet entering the true 'extreme fear' zone.

But if we believe in the future:

  • Although there was only one interest rate cut in 2025, there are three in 2026, and it may even continue into 2027;

  • The crypto market is expected to emerge into a mild but sustained long bull trend;

  • Thus, Bitcoin is likely to become one of the safest asset allocation choices — just like a 'high elasticity, low noise' long-term financial product.

Summary

The current crypto market is in a 'quiet period', but data shows that funds are still gradually entering, especially the inflow of ETFs provides support for mainstream coin prices. Altcoins lack strong capital support and are relatively weak in performance.

Macroeconomic policies determine market rhythms, and we need to be prepared: there may be another period of sideways consolidation, but thereafter we might welcome structural opportunities.

At this time, calmness is more important than blind action; strategic patience is the key to whether you can navigate through the cycle.

$BTC