The crypto market was shrouded in mystery before September: the golden period for meme coins may have ended, and the integration of AI and encryption has become the next trend.
Macroeconomic Market Analysis: Recent Trends and Future Outlook of Encryption Market
During the leisure time of the weekend, I organized some thoughts on the current encryption market and hope to share them with everyone.
I believe the substantial direction of the encryption market may not become truly clear until after September. The current market is influenced by multiple factors, including macroeconomic resistance, insufficient liquidity in the summer, and portfolio adjustments at the end of the quarter. The true market trends will only become apparent after the August holiday ends and participants fully return.
From the recent market performance, the rise of most altcoins is mainly due to short covering rather than solid fundamental support. Traders, influenced by past rebound experiences, blindly chase the upward momentum, but this time there is a lack of genuine long-term holder support. Most investors have already been severely impacted in the previous market adjustment. Unsurprisingly, many tokens that surged in the short term subsequently experienced the same drastic corrections.
It is worth noting that Ethereum has experienced an unexpectedly strong rebound, while the AI token and meme coin sectors, which were previously hit hardest, have led this wave of recovery. On the other hand, tokens that possess practical value, strong fundamentals, or buyback mechanisms have shown greater resilience - they were more stable during the downturn and recovered faster. Syrup, Hype, and AAVE are good examples. Although SPX belongs to the meme coin category, its structural design is fundamentally different from regular meme coins.
Market Key Insights
1. Bitcoin demand is solid and persistent.
Traditional capital is gradually entering the market through ETFs and other compliant channels. The nature of the capital supporting BTC at this stage is completely different from past cycles, which is why large-scale BTC liquidations are unlikely to occur unless impacted by significant macro events.
2. The trend of diversification in the altcoin market is intensifying.
Capital will ultimately flow back into the altcoin market, but this will be highly selective. Only tokens with clear use cases and practical application scenarios can attract these funds. This is also the reason why I believe Ethereum will outperform other public chains. Regulatory clarity, the growing DeFi adoption rate, deflationary mechanisms, and staking demand together form a strong virtuous cycle. Moreover, due to ETH's long-term failure to meet performance expectations, there are still many potential buyers waiting on the sidelines.
3. Tokens supported by venture capital face structural pressure
Token unlocks will continue to put pressure on prices. In the case of insufficient liquidity, the ongoing selling by validators and early investors limits the upward price potential. This is also why I believe that tokens listed on centralized exchanges with overvalued prices have bleak future prospects. Tokens within the ecosystem are particularly susceptible to ongoing selling pressure, mainly due to the design of their validator reward structure.
4. The Structural Advantages and Limitations of Meme Coins
Meme coins have certain structural advantages: no venture capital unlocking pressure, fair distribution, and completely based on community attention. This is a purely market speculation mechanism - similar to the patterns in early cycles, which is indeed effective.
But I think this stage is coming to an end.
The rise of token generation platforms and the launch of certain meme coins marked the peak of meme coin attention. After that, the overall interest began to wane. Even in April's rally, some public chains have underperformed Ethereum – if market participants already hold enough positions, where will the marginal buyers come from when the meme coin fever subsides?
Some meme coins may still perform well, especially those projects promoted by influencers on platforms like TikTok or Instagram, outside of the encryption community. These may still bring about asymmetric wealth effects. However, the era of meme coins solely relying on cute images has ended. Only those projects with strong narratives and deep market understanding hold true speculative value.
Ironically, the weariness and skepticism towards venture capital-backed projects have instead created opportunities for fair-launch Web2/3 projects, which will become important channels for the next wave of wealth growth.
Some emerging projects are great examples. But to seize these opportunities, you need to be active on the chain. When information asymmetry exists, big opportunities will always arise. Once everyone is aware of an opportunity, its excess returns will disappear.
This is exactly why I closely monitor the on-chain market. The success of some projects has sparked a frenzy to find the "next dark horse," and capital is starting to chase similar fair launch projects. Just like certain successful traders have gained huge returns through meme coins—market attention guides the flow of capital.
5. Future Market Trends
If meme coins are no longer the main opportunity, where is the next hotspot?
My perspective: The field of integration between AI and encryption technology.
Friends who follow my analysis should know that most of my operations in this cycle—except for early investments in certain public chains and venture capital projects—are mainly focused on meme coins and AI-related fields.
Just like the DeFi craze, most early AI projects have faltered after the hype. However, projects that are genuinely based on practical value are quietly building during the market downturn. We have already seen some of these projects emerge on the blockchain.
As the profit margins of meme coins shrink, market attention will naturally shift to new narratives. AI, with its clear application value, is very suitable to become the next focal point.
Many AI and encryption combined projects adopt a fair launch model, echoing the current market's pursuit of fairness.
This is also why I have been focusing on research and laying out in this field during the relatively calm weeks in the market. There is no need to rush to establish all positions now — but I believe that if the market experiences a strong rally again, this field will contain the greatest asymmetric investment opportunities.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
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BottomMisser
· 06-22 08:38
Bankrupt and still analyzing in vain.
Reply0
BlockchainDecoder
· 06-19 11:00
Three years ago, I read the same analysis; how similar the market trends are to that time? Citing data from the Q3 2021 report of the Quantitative Trading Laboratory at Pukou University, history astonishingly repeats itself.
Reply0
NightAirdropper
· 06-19 10:42
Are you all waiting for the market in September? The dry season has come and it's a bit panicky.
Reply0
MissedAirdropAgain
· 06-19 10:31
September is about to big pump again. If you don't act now, you'll regret it.
The crypto market was shrouded in mystery before September: the golden period for meme coins may have ended, and the integration of AI and encryption has become the next trend.
Macroeconomic Market Analysis: Recent Trends and Future Outlook of Encryption Market
During the leisure time of the weekend, I organized some thoughts on the current encryption market and hope to share them with everyone.
I believe the substantial direction of the encryption market may not become truly clear until after September. The current market is influenced by multiple factors, including macroeconomic resistance, insufficient liquidity in the summer, and portfolio adjustments at the end of the quarter. The true market trends will only become apparent after the August holiday ends and participants fully return.
From the recent market performance, the rise of most altcoins is mainly due to short covering rather than solid fundamental support. Traders, influenced by past rebound experiences, blindly chase the upward momentum, but this time there is a lack of genuine long-term holder support. Most investors have already been severely impacted in the previous market adjustment. Unsurprisingly, many tokens that surged in the short term subsequently experienced the same drastic corrections.
It is worth noting that Ethereum has experienced an unexpectedly strong rebound, while the AI token and meme coin sectors, which were previously hit hardest, have led this wave of recovery. On the other hand, tokens that possess practical value, strong fundamentals, or buyback mechanisms have shown greater resilience - they were more stable during the downturn and recovered faster. Syrup, Hype, and AAVE are good examples. Although SPX belongs to the meme coin category, its structural design is fundamentally different from regular meme coins.
Market Key Insights
1. Bitcoin demand is solid and persistent.
Traditional capital is gradually entering the market through ETFs and other compliant channels. The nature of the capital supporting BTC at this stage is completely different from past cycles, which is why large-scale BTC liquidations are unlikely to occur unless impacted by significant macro events.
2. The trend of diversification in the altcoin market is intensifying.
Capital will ultimately flow back into the altcoin market, but this will be highly selective. Only tokens with clear use cases and practical application scenarios can attract these funds. This is also the reason why I believe Ethereum will outperform other public chains. Regulatory clarity, the growing DeFi adoption rate, deflationary mechanisms, and staking demand together form a strong virtuous cycle. Moreover, due to ETH's long-term failure to meet performance expectations, there are still many potential buyers waiting on the sidelines.
3. Tokens supported by venture capital face structural pressure
Token unlocks will continue to put pressure on prices. In the case of insufficient liquidity, the ongoing selling by validators and early investors limits the upward price potential. This is also why I believe that tokens listed on centralized exchanges with overvalued prices have bleak future prospects. Tokens within the ecosystem are particularly susceptible to ongoing selling pressure, mainly due to the design of their validator reward structure.
4. The Structural Advantages and Limitations of Meme Coins
Meme coins have certain structural advantages: no venture capital unlocking pressure, fair distribution, and completely based on community attention. This is a purely market speculation mechanism - similar to the patterns in early cycles, which is indeed effective.
But I think this stage is coming to an end.
The rise of token generation platforms and the launch of certain meme coins marked the peak of meme coin attention. After that, the overall interest began to wane. Even in April's rally, some public chains have underperformed Ethereum – if market participants already hold enough positions, where will the marginal buyers come from when the meme coin fever subsides?
Some meme coins may still perform well, especially those projects promoted by influencers on platforms like TikTok or Instagram, outside of the encryption community. These may still bring about asymmetric wealth effects. However, the era of meme coins solely relying on cute images has ended. Only those projects with strong narratives and deep market understanding hold true speculative value.
Ironically, the weariness and skepticism towards venture capital-backed projects have instead created opportunities for fair-launch Web2/3 projects, which will become important channels for the next wave of wealth growth.
Some emerging projects are great examples. But to seize these opportunities, you need to be active on the chain. When information asymmetry exists, big opportunities will always arise. Once everyone is aware of an opportunity, its excess returns will disappear.
This is exactly why I closely monitor the on-chain market. The success of some projects has sparked a frenzy to find the "next dark horse," and capital is starting to chase similar fair launch projects. Just like certain successful traders have gained huge returns through meme coins—market attention guides the flow of capital.
5. Future Market Trends
If meme coins are no longer the main opportunity, where is the next hotspot?
My perspective: The field of integration between AI and encryption technology.
Friends who follow my analysis should know that most of my operations in this cycle—except for early investments in certain public chains and venture capital projects—are mainly focused on meme coins and AI-related fields.
Just like the DeFi craze, most early AI projects have faltered after the hype. However, projects that are genuinely based on practical value are quietly building during the market downturn. We have already seen some of these projects emerge on the blockchain.
As the profit margins of meme coins shrink, market attention will naturally shift to new narratives. AI, with its clear application value, is very suitable to become the next focal point.
Many AI and encryption combined projects adopt a fair launch model, echoing the current market's pursuit of fairness.
This is also why I have been focusing on research and laying out in this field during the relatively calm weeks in the market. There is no need to rush to establish all positions now — but I believe that if the market experiences a strong rally again, this field will contain the greatest asymmetric investment opportunities.