In this round, the macro environment experienced high inflation and aggressive interest rate hikes by the Federal Reserve in 2022, and started showing signs of turning in early 2023 (slowing rate hikes, increasing market expectations for pauses or even rate cuts); global liquidity began to recover in stages, and risk assets (including cryptocurrencies) began to rebound, primarily going through six phases; each phase has its own storyline, we analyze and compare from global economic environment/money policy/market liquidity/major events, the article content is purely work-related and may be overly 'dry', but patience will yield certain rewards...
Stage 1 Rise: January 1, 2023 – July 1, 2023.
After experiencing aggressive interest rate hikes in 2022, the Federal Reserve is nearing the end of rate hikes in 2023, with the market generally expecting stable rates and even possible cuts. Although the overall financial environment remains tight, market expectations shift with falling inflation. Under the premise of improved marginal liquidity, traditional markets slowly warm up, US tech stocks strengthen, risk appetite increases, indirectly driving the liquidity improvement in the crypto market.
At the same time, BTC's ETF-related expectations began to catalyze, and BTC's rise remained strong even after the ETF application was rejected in June, showing that the market, in an environment of expected easing, has strong expectations for the ETF.
Crypto ecosystem:
BTC: As the 'leader' of the crypto industry, it benefits from the warming of macro liquidity, while the ETF events accelerate the rhythm and strength of the rally.
SOL: Achieved the maximum increase, having previously been suppressed by FUD, the ecosystem gradually repaired after the FTX collapse, developers returned, and multiple new projects launched, resulting in a strong ecological recovery.
XRP: Backed by favorable litigation, the court ruling against the SEC boosts prices, driven by policy expectations.
ETH: Benefiting from macro liquidity recovery and overall market resurgence, but in the early stages, DEFI and staking ecosystem growth documents, but lack strong catalysts, hence performing relatively weakly in terms of increase.
LINK: Moderate increase, infrastructure-type assets have moderate gains, lacking narrative support.
BNB: Almost no increase, as Binance faces heavy regulatory pressure, founder CZ resigns, damaging ecological confidence.
Common patterns:
1, The background of marginal liquidity improvement is the premise driving this round of rebounds.
2, Market rebound is concentrated under the catalysts of ETF and the end of regulatory headwinds; the 'leading cryptocurrencies' BTC and ETH started first due to policy and funding influences, while ecological coins like SOL and XRP later catch up, BNB's increase is only +2%, indicating that funds are still concentrated on higher certainty assets.
3, Rise cycles are consistent, with Fibonacci retracement levels concentrated at <38.2%, reflecting highly synchronized market rise rhythms with generally small rebound forces, indicating overall risk appetite is in the early stages of improvement.
Diversity patterns:
1, The increase is jointly determined by the 'previous decline' and the 'event catalyst intensity';
2, BTC/ETH are macro-driven, following overall liquidity with moderate volatility and stable trends.
3, XRP/BNB are event-driven, significantly affected by regulatory/legal events, showing high price sensitivity, indicating that regulation remains an important variable determining coin performance.
4, SOL/LINK are ecosystem recovery types, relying on project development and user growth, with high elasticity but also high risks.
Stage 1 Market Characteristics:
This phase benefits from marginal improvements in macro liquidity and favorable policy events, allowing the market to recover, with significant differences in rises between mainstream and secondary coins, mainstream coins are stable but limited in increases, while ecological coins have large fluctuations but strong elasticity, with rising elasticity relying on ecological quality.
Stage 2 Correction: July 1, 2023 – September 1, 2023.
During Q3 2023, despite falling inflation, the Federal Reserve signaled a 'higher for longer' stance, leading to disappointment in easing expectations, increasing risk-averse sentiment, tightening global liquidity, and funds flowing back to low-risk assets like US Treasuries, causing US stocks to oscillate at high levels, suppressing crypto assets and leading to comprehensive corrections.
Crypto ecosystem.
BTC: As a mainstream token, it has the smallest correction amplitude, possessing certain safe-haven attributes.
ETH: Weak performance relative to BTC due to macro liquidity tightening and weak DeFi activity.
SOL: Achieved the largest increase in the previous stage, but in this stage, due to a lack of liquidity, a technical correction occurs alongside market risk release.
XRP: Although the court won, the market 'buys expectations and sells facts', with positive developments fully digested coupled with macro headwinds.
BNB: Continues to face regulatory pressure, but due to its previous rebound phase not realizing significant growth, it has a smaller decline in this phase, reflecting stability.
Common patterns:
1, Under the premise of tightening macro liquidity, crypto narratives and market speculation are ineffective.
2, The more one rises, the more one falls: SOL and XRP saw significant increases in the previous stage, but experienced the most severe corrections in this stage, reflecting a consensus among market funds to take profits from projects with independent narratives under macro adverse conditions.
3 Major cryptocurrencies show strong defense: BTC and ETH have relatively small declines, indicating a preference for funds to seek safety when market sentiment cools, particularly evident in BTC.
4. Clear technical indicators: All Fibonacci levels are well below -38.2%, with SOL reaching -88.6% and LINK reaching -127.2%, indicating deep declines with structural correction characteristics, not just temporary fluctuations.
Diversity patterns:
BNB: Initially weak performance, this phase has seen regulatory impacts dulling, resulting in relatively small declines.
Stage 2 Market Characteristics:
During this stage, macro policies shifted from easing to tightening, with enhanced 'hawkish tendencies' from the Federal Reserve, compounded by geopolitical risks and tight liquidity. The market entered a phase of 'risk convergence' and 'wait-and-see,' with funds' risk-averse sentiment dominating; assets that had previously risen significantly faced greater selling pressure, with defensive assets (like BTC) becoming a temporary safe haven for funds.
Stage 3 Rise: October 1, 2023 – March 1, 2024.
As inflation data eased, the Federal Reserve emphasized a 'data-dependent' approach and consecutively paused interest rate hikes in the second half of 2023, forming a clear policy top signal, with the market betting that rate cuts will begin in Q1/Q2 2024, driving global liquidity recovery and increasing institutional allocations to risk assets, leading to a rise in risk assets.
At the same time, leading US tech stocks like Tesla, Nvidia, and Microsoft reported better-than-expected earnings, driving a surge in the Nasdaq; the AI narrative continues to heat up (driven by OpenAI, Meta, Nvidia), with risk appetite being transmitted to Web3 and on-chain AI narratives.
Bitcoin spot ETF approval expectations continue to ferment (finally landing in early 2024), becoming a trigger for institutional investors to enter the market. This leads to a strong rally in large-cap coins led by BTC, followed by funds overflowing into secondary assets.
Crypto ecosystem.
BTC (+173%) benefits from ETF approval and institutional fund inflows, continuing to be favored as a 'core asset for crypto risk aversion.'
ETH (+150%) recovery of the DeFi market and increase in on-chain activities driving prices up alongside BTC.
SOL (+931%) is the standout performer in the entire market. Successful ecosystem reconstruction, user and developer influx, and new narratives like NFT and DePIN driving growth.
LINK (+240%) Chainlink's cross-chain interoperability protocol (CCIP) landing, increased oracle demand driving up prices.
BNB (+223%) Binance gradually alleviates regulatory pressure, the impact of the CZ resignation has dulled, ecology recovers, pushing the coin price to repair.
XRP (+30%) sees reduced impact from winning the lawsuit, lacking new catalysts, underperforming relative to mainstream assets.
Market common patterns:
1, Macro policy expectations dominate market direction, with clear rate cut expectations becoming strong catalysts for the market.
2, Significant increase in macro liquidity + institutional fund entry + ETF narrative resonance, ultimately achieving a collective rise in mainstream crypto assets.
3, The ranking of increases is highly correlated with narrative strength/ecosystem activity; the tokens that rise the most are generally those with the most complete narratives or the most active ecosystems.
4. All tokens' Fibonacci levels are far above 38.2%, with SOL reaching 78.6%, indicating that this rise is a strong trend main wave, not a weak rebound.
Diversity patterns:
1, Institution-driven: BTC/ETH, ETF approvals, institutional funds entering, trends remain stable.
2, Ecological restoration type: SOL/BNB/LINK, the longer they were suppressed + the higher the completeness of the narrative, the stronger the rebound.
3, News saturation type: The previous stage benefits of XRP have been digested, with no new expectations. Performance is relatively weak.
Stage 3 Market Characteristics:
The essence of this phase is a strong upward period under the joint action of 'policy and funding double inflection points':
Policy aspect: The Federal Reserve's tightening cycle has ended, and the monetary environment is easing.
Funding aspect: ETFs attract traditional funds to enter the market;
Fundamentals: Recovery of multiple public chain ecosystems, new technologies implemented, such as DePIN, Modular chains, cross-chain protocols, etc.;
Sentiment: Market risk appetite quickly recovers, FOMO sentiment returns.
Stage 4 Correction: April 1, 2024 – August 1, 2024.
In early 2024, the US CPI year-on-year growth rate remained at 3%-3.5% (still above the 2% target), while core PCE inflation remained sticky (service inflation did not significantly decline), and geopolitical conflicts (like the Middle East situation) drove up energy prices, causing inflation to rebound. GDP growth slowed to 1.5%-2%.
From April to June: The Federal Reserve maintained interest rates unchanged (5.25%-5.5%), focusing on inflation stickiness and employment data, maintaining a 'higher for longer' stance. The market traded on 'stagnation' logic.
July-August: Inflation remained close to 3% for three consecutive months, with the unemployment rate rising above 4.2%, potentially triggering the first rate cut (25bps) and signaling easing.
In Q2 2024, major US tech companies face multiple challenges, including supply chain disruptions, rising costs, and slowing consumer demand. For example, Tesla and Alphabet report signs of profit margin pressure and growth slowdown in their earnings. Additionally, uncertainties in trade policies further pressure tech companies' international business.
At the same time, against the backdrop of the US election year, uncertainty in fiscal and regulatory policies rises, exacerbating market risk-averse sentiment.
Crypto ecosystem:
1, Despite positive regulatory progress, such as ETF approvals, the market is still affected by macroeconomic uncertainties.
2, The supportive role of ecological development: SOL's decline (-43.76%) is relatively small due to 'ecosystem development' (like the explosion of meme coins and the DePIN narrative) attracting funds to remain. This indicates that technological upgrades or application expansions can partially offset macro pressures in a fluctuating environment.
3, Except for BTC having anti-decline properties, other tokens' declines are concentrated between Fibonacci retracement levels of 61.8-78.6, reflecting an overall decrease in market risk appetite.
Market common patterns:
1, Policy uncertainty triggers market volatility, with most tokens showing correlated movements.
2, Tech stocks and crypto assets are highly sensitive: Tech stocks and crypto assets respond sensitively to macroeconomic indicators and policy changes, becoming market volatility barometers.
3, Legal rulings (like XRP), regulatory dynamics (like BNB), and other events trigger short-term price fluctuations.
Diversity patterns:
1, The supporting effect of ecological progress on prices varies; SOL's decline is smaller than ETH's, reflecting stronger ecological resilience.
2, BNB, as an exchange platform token, may have its price closely related to platform operational strategies (like burning mechanisms, new businesses), differing from pure public chain token logic, the former relies more on platform operations, while the latter is closely related to macro economy and technological innovation.
Stage 4 market characteristics:
During this phase, cryptocurrency prices are driven by 'macro liquidity + project fundamentals + unexpected events.' The US financial market has shown high volatility under the interplay of multiple factors. Although the Federal Reserve has begun to shift to easing policies, trade tensions, declining consumer confidence, and security incidents in the digital currency market have collectively affected market sentiment. The Federal Reserve's policy dominates the medium- to long-term trend, with tokens generally down in a tightening liquidity environment; ecological development, regulatory changes, or legal judgments may create structural opportunities in a turbulent environment.
Stage 5 Rise: September 1, 2024 – January 1, 2025.
In the second half of 2024, the Federal Reserve will respond to moderate economic slowdown (GDP growth rate around 1.8%) and inflation declining to 2.5%-3%, starting a rate cut cycle in September (total cuts of 50-75bps), significantly improving market liquidity.
The US government increased investment in technology fields such as AI and quantum computing, combined with tech stocks' earnings exceeding expectations (e.g., Nvidia's data center revenue grew by 30%), boosting market risk appetite.
Simultaneously, under the support of 'Trump policy expectations' and 'institutional fund inflows', reflecting the market's enhanced expectations for easing policies, capital shifted from safe-haven assets to risk assets.
Crypto industry.
1, Resonance of regulation and innovation.
1) Trump’s election promise to establish a 'strategic Bitcoin reserve' is seen as the US government's recognition of crypto assets, greatly boosting market confidence.
2) XRP (+583.97%): Ripple launched the stablecoin RUSD and accelerated its layout in cross-border payments, coupled with easing SEC litigation risks, the market anticipates it becoming a 'benchmark for compliance,' resulting in large inflows of funds.
3) BNB (+61.45%): Despite facing regulatory pressures (CZ's resignation), Binance rebuilt trust through business spin-offs and strengthened compliance (like independent US entities), with ecological activity (BNB Chain trading volume growth of 40%) supporting valuation repair.
2, Ecological development and technological breakthroughs.
1) SOL (+133.4%): The Solana ecosystem has exploded (e.g., the migration of the DePIN project Helium, completion of the Firedancer upgrade), TPS increased to over 100,000, attracting institutional funds.
2) LINK (+204%): Chainlink launched the cross-chain interoperability protocol CCIP and collaborated with Swift to pilot interbank settlements, driving a surge in oracle demand that promotes token revaluation.
3, Market sentiment and leverage effects:
Institutional funds continuously flow into BTC's spot ETF (net increase of $2 billion per month), coupled with the 'post-halving cycle' narrative and the US's establishment of a 'Bitcoin reserve fund' event, driving leveraged bullish positions (weekly funding rate of 19) to push prices to break historical highs.
4, The differentiation in increases is evident:
First tier: XRP (+584%) due to unique event-driven factors, with a leading rise gap.
Second tier: LINK (+204%), SOL (+133.4%), BTC (+103.94%), benefiting from ecological progress or macro liquidity.
Third tier: ETH (+83%), BNB (+61.45%), with relatively moderate increases, possibly due to some negative offsets.
Common patterns:
1, Macro liquidity dominates: Expectations of easing policies from the Federal Reserve and global liquidity improvements laid the groundwork for an overall market rise; under expectations of policy easing, the crypto market rises overall, with increased correlation with risk assets (like US stocks).
2, Event-driven short-term surges: XRP, LINK, etc., due to specific positive news, see strong increases, showing the crypto market's high sensitivity to news.
3, AI narrative cross-catalysis: Earnings from chip giants like Nvidia and AMD exceeded expectations, driving up AI-related tokens (like RNDR, FET), indirectly boosting overall market sentiment.
Diversity patterns:
1, Increase differentiation: Cryptocurrency increases far exceed tech stocks (XRP nearly 6 times vs. Nasdaq 15%), as the crypto market is relatively small and beta is higher, making it more sensitive to liquidity under favorable overall conditions.
2, Public chain tokens show differentiation: SOL stands out due to high performance and ecological expansion (like NFT and DeFi project migration), reflecting how technological advantages drive valuation; ETH relies on DeFi recovery, but its increase lags behind SOL, possibly affected by high gas fees and competitive chains diverting traffic.
3, The uniqueness of exchange tokens: BNB still rises under regulatory pressure, indicating its value is strongly tied to platform operations (such as trading volume, profit buybacks), different from public chain token logic.
Stage 5 Market Characteristics:
During this phase, the cryptocurrency market is driven by 'easing liquidity + marginal regulatory relaxation + ecological innovation.' The liquidity sensitivity of the crypto market shows significant stratification, with high market cap tokens experiencing stable increases, benefiting from macro and institutional funds and ETF inflows, while mid- and small-cap tokens see larger increases due to event catalysis, reflecting a 'narrative premium' for high-risk assets under macro benefits; tokens with clear compliance processes (like XRP, LINK) attract funds, while those with high regulatory uncertainties (like some MEME tokens) perform lagging.
Stage 6 Correction: February 1, 2025 – April 2025.
Due to Trump's 'reciprocal tariffs' impact, the US GDP growth expectation for 2025 has been revised down from 2.2% to 1.4%, and the probability of falling into recession in the next 12 months has increased to 45%, the highest level since the end of 2023. Economists warn that the US may face risks of 'stagflation' similar to the 1970s, where high inflation coexists with low growth. Despite market expectations for two rate cuts in 2025, the rise in inflation expectations limits the Federal Reserve's policy space. Macro adverse factors plus global trade frictions lead to a sell-off of risk assets.
US tech stocks report weak earnings:
Apple Inc.: Although Q1 2025 revenue increased by 4%, iPhone sales fell by 4% year-on-year, indicating weak hardware sales.
Amazon: Q4 2024 revenue increased by 10% year-on-year, but due to concerns about future growth, the stock price dropped by 4% after the earnings report.
Google's parent company Alphabet: Q4 2024 revenue increased by 12% year-on-year, reaching $96 billion, but due to increased capital expenditures, the stock price dropped by 7% after the earnings report.
Tesla: Market share overall declined, Europe—from 17.9% to 9.3%, Germany—from 16% to 4%, China: Tesla's March sales down by 11.5%, globally—from 20% to 14%. In January 2025, market expectations regarding the events triggered by Tesla began to see funds withdraw.
Crypto industry.
1, BTC (-31.95) In March 2025, Trump signed an executive order to establish a 'strategic Bitcoin reserve,' using approximately 200,000 Bitcoins held by the government as national reserve assets, and plans to establish a digital asset reserve pool, officially receiving government endorsement.
2, ETH (-66.28): The ETH ecosystem shows weak performance due to lack of beneficial technological progress and intensified Layer 2 competition, with price declines leading, and the exchange rate with BTC dipping to the lows of the previous bear market, highlighting ecological dependency risks.
Common patterns:
1, Macroeconomic factors dominate market direction; tightening policies and trade turbulence lead to global funds seeking safety, tightening liquidity, and increased correlation between cryptocurrencies and traditional risk assets (like US stocks).
2, BTC demonstrates a leading effect in every phase, with relatively small declines (-31.95%), showing that its 'digital gold' attribute partially buffers risks.
3, The strong correlation between tech stocks’ earnings and the market: tech stocks tend to sell off risk assets due to declining corporate profits or valuation adjustments. 4, Event-driven failure: The XRP 'non-security' ruling failed to reverse the downward trend, indicating that the market is more focused on long-term applications rather than short-term legal benefits.
Diversity patterns:
1, Declines are stratified and differentiated: anti-decline tier: BTC (-31.95%), BNB (-34.50%) have smaller declines, reflecting their attributes as 'safe-haven assets' or 'platform necessities'; high volatility tier: ETH, LINK, SOL with declines over -66%, related to ecological weakness or technological lag.
2, The anti-risk logic of exchange tokens forms a price support mechanism.
Stage 6 Market Characteristics.
During this phase, the decline in cryptocurrencies is driven by 'macro tightening + trade turbulence + ecological weakness,' with policy shifts (like tariffs) amplifying market fluctuations in the short term. However, the relationship between BTC and US stock declines has changed; US stocks have dropped -20% from their highs, while BTC has dropped -31%, showing a decline ratio of 1:1.5, highlighting the phase's 'digital gold' safe-haven attribute. (Since 2019, the decline ratio between BTC and US stocks has been consistently at 1:3), only two times has BTC's prior excessive decline led to a final ratio of 1:1.5.
Through the rise and fall from January 2023 to April 2025 across six stages, we can derive the pattern that under a macroeconomic-driven long-term easing situation, market liquidity may fluctuate, but is not under a completely tight monetary policy; fundamentally sound altcoins can achieve certain increases.
1, In the overall increase over a super long cycle: The rise ratio of large-cap altcoins and BTC throughout the cycle is generally within 1:2, except for instances where fundamentals change dramatically resulting in an oversized rise ratio (like SOL), and often the tokens can follow up in different stages due to event-driven phases but cannot exceed an oversized rise of 1:2 compared to BTC.
BTC +564%.
ETH +241%. The rise ratio of Ethereum and BTC is 1:0.42.
SOL +2811%, the rise ratio of SOL and BTC is 1:4.9.
BNB +221%, with the rise ratio of BNB and BTC being 1:0.4.
XRP +1033%, the rise ratio of XRP and BTC is 1:1.8.
LINK +462%, the rise ratio of Ethereum and BTC is 1:1.
2, Each round sees BTC as the leading token rising first: while other altcoins eventually rise based on different event nodes, they will achieve increases sooner or later (but when BTC does not lead, no large-cap altcoin will independently trigger significant increases);
1) BNB did not increase significantly in stage 1, but achieved an overshoot in stage 3 compared to other tokens, while in stage 5 it exhibited stagnation at a high level.
2) XRP remained basically flat in stage 1 with BTC, showing the smallest increase in stage 3, but in stage 5 due to its own positive events, it outperformed all tokens.
3) LINK saw small increases in stage 1, but ranked among the top in stages 3 and 6. 4) SOL, due to fundamental changes, achieved the highest increases in stages 1 and 3, but stagnated in stage 5 and saw the most correction in stage 6.
3, When encountering macro turbulence and liquidity tightening: other tokens typically fall more than BTC; for example, in stage 2, other tokens' declines are generally twice that of BTC; in stage 4, other tokens’ declines are generally 1.5-2 times that of BTC; in stage 6, other tokens' declines are generally twice that of BTC.
4, Changes in fundamentals play a decisive role in token increases: for example, SOL, with explosive on-chain activity, SPL-20, NFT trading, and strong growth in Solana DeFi (like Jupiter, Pyth, etc.). Low gas fees and high concurrency advantages stand out, making it an ETH Layer 2 alternative. Furthermore, the Meme ecosystem (active user growth, PUMP emergence) changed user trading patterns on DEX, thus attracting VC, institutional, and exchange funds.
5, Event-driven factors: Often can achieve a slightly stronger increase than BTC at certain stages, but in the long run cannot exceed the strong basic ratio increase.
6, Platform tokens possess a certain degree of stability: as their operational logic primarily depends on platform operations, user usage, etc., they tend to be more resistant to declines but also find it difficult to achieve significant over-performance, with rise and fall ratios generally at 1:1 with BTC.
7, From the overall perspective of rise and fall: large-cap tokens may experience temporary resistance during BTC's decline due to independent events, and when BTC rises again, it may experience stagnation or early decline due to its own events reaching peak benefits. For example, LINK achieved an overshoot in stage 3 but showed the largest decline during the stage 4 correction; SOL showed stagnation in stage 5 with growth lower than other tokens, and witnessed the most correction in stage 6.
