🦄 Cash Flow Analysis - Is LAYER 2 in a "dead zone"?
Currently, the weakest cash flow sector that everyone should pay special attention to is Layer 2. The cash flow picture here shows a clear depletion with no signs of capital attraction, no growth signals, and almost completely lost its appeal to the market. If there is one exception, it is only ARB POL that still maintains a bit of remaining attraction, while everything else has fallen into a state of emptiness.
Looking at the GML2 Index chart representing Layer 2 tokens, we see:
On July 12, cash flow peaked at 99 points, reflecting the highest level of interest in the year.
But by April 17, it had dropped to only 27.5 points, a vertical decline, signaling strong and decisive cash outflow.
The most recent recovery peak on October 5 only reached 41 points, and has now dropped to 34, too low to create expectations for a recovery cycle.
This indicates that Layer 2 is no longer a cash flow refuge, at least in the short term. Not only Layer 2, but also the DeFi, Gaming, and DePIN sectors are also facing weak cash flow, low liquidity, and not creating waves.
🤩Meanwhile, Layer 1, Meme, and AI are the three sectors leading the recovery, with strong cash flow attraction creating new momentum for the market. If in the upcoming growth phase, the three main cash flows mentioned above are satiated, where will the next cash flow rotate to?
Layer 2, DeFi, or DePIN, what do you think?
Could this be an accumulation zone to gather before becoming the next explosion point? Please share your thoughts and suggestions?
#Layer2