Source: Huali Huawai
In the previous article (March 12), we briefly discussed some issues regarding the future direction of the crypto market. Different people may have different ideas or views; no one can truly predict the future of the market. However, one thing is certain: while market cycles do have certain regularities, the market is also constantly evolving.
In fact, looking back at some of our previous articles (e.g., those from 2022 and 2023), some viewpoints that we thought were reasonable or correct at the time may not seem entirely applicable today.
In this cycle, we have witnessed too many changes or incredible new things, for example:
1) MemeCoin Season seems to have replaced the previous Altcoin Season.
2) Bitcoin has reached the milestone of $100,000 and has broken its historical high multiple times, yet the king of altcoins, ETH, has not even exceeded its historical high in this bull market, and currently, ETH's price 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, and by March 2022, there were 4 million tokens in the market, 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 may exceed 100 million, as shown in the figure below.
4) In 2024, BTC ETF was finally approved, ETH ETF has also been approved, and currently, more ETFs for tokens such as DOGE, XRP, LTC, SOL, ADA are under review for approval (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, there were already large institutions like Grayscale in the market, and we also experienced the entry of institutions like Tesla, with Musk continuously pushing the market, starting from 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, other altcoins have also started to attract some institutional interest and investment. For example, WLFI (World Liberty Financial, a DeFi project supported by the Trump family) has been buying ETH, ONDO, MOVE, ENA, LINK, AAVE, and other tokens since this year. As shown in the figure below.
In short, it seems we have been following the existing historical cycle patterns while continually witnessing some new differences or new histories.
From an investment perspective, in this cycle, some seasoned investors who have adhered to their established investment thinking seem to have suffered losses, especially those who have focused their entire investment strategy on the value investment 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 seems to have struggled to hold on until this month, and may have already cut losses and liquidated their position. As shown in the figure below.
Of course, compared to the clarity of the previous speaker, many seasoned investors may still insist on holding onto their altcoins that have already fallen over 80%, putting themselves in a dilemma. For example, they are reluctant to cut losses directly, or they feel unable to break even by switching to Bitcoin... In fact, it is difficult for anyone to make choices or let go when faced with such outcomes. Regarding what to do, we have already provided some thoughts and suggestions from both long-term and short-term perspectives in the article on March 11. Interested parties can refer back to that article, so I won't elaborate further here.
Here, setting aside macro factors, in terms of the crypto market itself, looking at the current overall market environment, it seems that people's (including institutions) attention to Bitcoin (those who have been affected or not in this cycle seem to have basically shifted to long-term attention to Bitcoin) will make it difficult for Bitcoin to see a dramatic 'rise' again, because sometimes excessive attention can create pressure, and this accumulation of 'pressure' may make it hard for Bitcoin's dominance to decline (or even continue to rise), prompting more people to start turning to Bitcoin (increasingly, more people now believe that investing in Bitcoin is better than investing in other altcoins). When Bitcoin experiences a pullback, more and more people will actively buy the dip...
And under the new changes and the operation of new models mentioned above, it seems increasingly unlikely that we will see the traditional concept of Altcoin Season (where Bitcoin's dominant position begins to decline after reaching a certain historical high, leading to a scene where many altcoins soar together). Since the start of this cycle, what we refer to as Altcoin Season seems to have been replaced by the rapid rise and fall of sector-based mini Altcoin Seasons such as MemeCoin Season, Trump Season, AI Season, etc.
So, can we still see the traditional concept of 'all coins soaring together' in Altcoin Season? I believe that such a comprehensive Altcoin Season is already unlikely. You can't expect all 10 million tokens to rise collectively by several times, right!
Unless there is a fundamental change in liquidity, meaning that the crypto market is flooded with massive amounts of liquidity (new money) to support all altcoins to soar together.
However, mini Altcoin Seasons will still occur; 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 just focus on digging out those projects with strong fundamentals, such as those that can continuously generate profits, have good tokenomics, and are capable of sustained development with a vision for the future... The simplest way is to select directly from the top 100 by market capitalization.
It can be anticipated that for a period of time to come, liquidity will still be mainly concentrated in BTC and a few altcoins. Most altcoins may face insufficient liquidity or a continuous decrease in liquidity. The vast number of altcoins (along with many VC projects continuously unlocking tokens) will further disperse liquidity. This fundamental issue can only be addressed through patience while waiting for internal innovations (i.e., innovations within the crypto market, but I currently see none) and changes in macro factors (such as the anticipated interest rate cuts in June this year and new U.S. policies regarding the crypto industry), which may help alleviate the liquidity issues in the crypto market to some extent.
I remember often hearing the phrase: history does not repeat itself, but it often rhymes.
This statement needs to be understood reasonably. The so-called rhyme does not mean that one can simply seek a sword by marking the boat. As we mentioned at the beginning of this article, while market cycles do 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 pace with the times and continuously adapt and study the new scenarios of the current cycle.
At the current stage, opinions are quite divided; some believe the market has completely entered a bear phase, while others think it is just a technical pullback (with the biggest bull market still ahead), and some believe the bull market has just begun. As for my personal view, I have shared some insights in previous articles. I believe there may still be some new opportunities this year (but not widespread opportunities), but I can't see too far ahead. For now, let's focus on the possible situations in May-June this year.
Moreover, everyone has different definitions of bull and bear markets. Some believe that a drop below MA200 signifies a bear market, while others think Bitcoin must fall below 50,000 to be considered a bear market... Again, as stated in our previous articles, it might be better to simply forget about bull and bear markets. We should focus on and identify several important stages (such as accumulation — rise — fall — despair — rise — fall — despair — re-accumulation). It’s not that bear markets will always incur losses or bull markets will guarantee profits. In fact, whether in a so-called bull or bear market, as long as the market exists and liquidity remains, opportunities are there. We must act according to the trend, but also be willing to go against it.