When will the bull market in the cryptocurrency space arrive?
Analysis of the liquidity dilemma in cryptocurrencies and the "artificial bull" of Bitcoin, explaining the liquidity thermometer law.
Cryptocurrencies exhibit a "critical value effect" based on the tightness of funds:
35-degree zone (contraction period): market liquidity freezes, BTC/ETH external assets nearly go to zero.
37-degree zone (neutral policy): BTC fluctuates, altcoins have partial recovery.
39-degree zone (expansion period): junk assets collectively surge.
Abnormal characteristics of this bull market:
Cycle liquidity environment: BTC performance, altcoin performance, other asset categories.
2021 bull market: global monetary easing +550%, average of top 100 projects +900%, NFT/metaverse assets skyrocketed.
2024 bull market: actual tightening +160%, average of top 100 projects -40%, traditional alternative assets stagnated.
Core contradiction: BTC breaks new highs against the trend amid shrinking liquidity, decoupling from safe-haven assets like gold/U.S. stocks, forming an independent market.
Expectation manipulation phase (2023 Q4 - 2024 Q2)
Creating FOMO sentiment through the persona of a "cryptocurrency-friendly president."
Promoting the concept of "Bitcoin Strategic Reserve" bill hype.
Actual effect: Attracting over $23 billion in institutional funds into the market.
Reality collision phase (2024 Q3 to present)
The Federal Reserve maintains high interest rates, crushing easing expectations.
BTC crashes from $95,000 to $72,000 (-24%).
Under political pressure, it is forced to shift to a "coercive easing" strategy.
Altcoin liquidity death spiral.
Last bull market projects: FDV (fully diluted valuation) generally fell from over $1 billion to $100-300 million.
New Binance projects: initial median valuation only $47 million (down 88% year-on-year).
BTC market cap share breaks 56% (the highest since April 2021).
Monthly trading volume of the top 20 altcoins shrinks by 92% from peak.
Key to breaking the situation: Federal Reserve policy shift roadmap.
Necessary condition: U.S. unemployment rate exceeds 4.5% and core PCE falls below 2.3%.
Current progress: unemployment rate 4.0% / core PCE 2.8% (compliance rate 37%).
Federal Reserve balance sheet expansion → steepening of the treasury yield curve → accelerated issuance of stablecoins → expansion of fiat channels for CEX → repair of altcoin valuations.
Ultimate conclusion: The true signal for the start of a liquidity bull market is when Coinbase exhibits the phenomenon of "listing 3 MEME coins in 10 minutes." The current market essence is a joint stress test of political forces and institutional capital, and the survival rule for retail investors should be "BTC dollar-cost averaging + stablecoin mining + avoiding leverage," waiting for the macro gate to reopen.
