The recent market leaves people feeling exhausted.
Bitcoin is not drawing a door, but it can't even draw a door anymore. The price has been languishing at over 80,000 USD, with a weak rebound and a slippery decline. Since it surged to a historical high of 126,000 USD in October, it has been continuously falling, with the yearly gains completely wiped out, even briefly dropping below 86,000 USD. What’s even more heartbreaking is that when gold and tech stocks drop, there are people buying the dip, but when Bitcoin drops, there are hardly any buyers catching the falling knife. Money is voting with its feet, heading towards places that either have a thousand-year consensus (gold) or have real cash flow (tech stocks).
Once liquidity is withdrawn, the embarrassment of being caught naked cannot be hidden.
This round of decline is superficially caused by tightening macro liquidity. The Fed's policy expectations have turned, funding costs have risen, and the highly leveraged crypto market is the first to be impacted. But the deeper reason is that the market structure has changed.
In the past, Bitcoin ETFs were the 'saviors,' with a steady influx of institutional funds supporting the market. But now, ETFs are experiencing continuous net outflows, becoming one of the straws that broke the market's back. More critically, early 'whales' and long-term holders have begun to see $100,000 as a psychological take-profit point, having sold over 810,000 Bitcoins in the past 30 days, setting a record since early 2024. The buying power can't absorb the selling pressure. This is no longer a short-term fluctuation but a sign that the supply-demand balance has been disrupted.
The narrative is in disarray: the anti-establishment facade can no longer hold steady.
The fundamental dilemma of Bitcoin is that its core narrative is collapsing.
It started with a rebellious spirit of 'decentralization and countering the system.' But what about now? It is becoming increasingly compliant, more like traditional financial products. This 'conversion' makes it particularly awkward when institutional uncertainty declines—its anti-establishment edge has been worn away, yet it has not reached the stable position of a 'global reserve asset' like gold.
The result is that it hasn't been able to tell a new story. AI and tech stocks have real technological breakthroughs and profit expectations; gold has a millennia-old consensus as a safe haven. What about Bitcoin? The narrative of 'digital gold' appears somewhat pale in the face of real-world turmoil. Some analysts point out that when global uncertainty intensifies, funds prefer gold, which is itself a reserve system, draining funds that might have flowed into Bitcoin. Concepts like 'tokenization of stocks' seem more like a boost for traditional finance, significantly reducing their appeal.
The market ecosystem is uneven: hot money has fled, leaving only arbitrage games.
In today's crypto market, the profit effect has nearly dried up.
Looking back at 2021, buying a leading track meant you could just wait for the wind to come. Now, the game has completely changed; hot spots rotate on a weekly or even daily basis, and experience can fail at any time. The liquidity of altcoins has basically collapsed, and many coins rebound weakly or even go to zero. Market depth has worsened, and even the buy-sell orders of mainstream coins have become sparse.
The remaining funds are mostly from arbitrage funds engaged in short-cycle trading and quantitative positions. They bet on price fluctuations, not long-term beliefs. Retail investors are not entering the market, new players are not coming in, and social funds do not see a wealth effect, so they are naturally unwilling to enter. The market hasn't collapsed, but it has also lost its warmth, like an amusement park with drained batteries.
The institutions' calculations: very clever.
Don't think that institutions are here to be saviors. They are very realistic and will only genuinely increase positions in two situations: one is when systemic risks are truly alleviated, and the other is when the global situation becomes chaotic to the point where allocation is unavoidable.
So what now? The world isn't chaotic to that extent yet. The favorable policies of the Trump administration have also been digested by the market in advance, lacking new sustained stimulus. Institutions will naturally choose US tech stocks with higher Sharpe ratios and clearer prospects, or directly buy gold. MicroStrategy is still buying, but its increase in holdings relies more on issuing new shares, a model that itself is also under scrutiny. When institutions begin to hesitate, the market direction becomes easy to judge.
My view: Where is the way out?
Bitcoin hasn't reached a dead end yet, but it must undergo a 'value reconstruction.' It needs to prove that it is not just a highly volatile speculative target but plays a unique role in asset allocation—such as being more efficient than gold in hedging specific risks (like fiat currency credit risk). This requires substantial breakthroughs in technological trust and a global compliance framework.
In the short term, restoring market confidence requires a landmark event, such as a clear easing signal from the Fed or truly large-scale practical applications landing. But before that, we may have to endure a period of gloom and consolidation.
For me, this stage feels more like a stress test, forcing the market to squeeze out leverage and narrative bubbles. I will keep an eye on it but will be more cautious. Cash and high liquidity assets at this time are more like a true refuge than any 'asset.'
It's not yet a time of despair, but it is certainly a time to wake up. Pay attention to Ake, who brings you more firsthand news and precise points of knowledge about the crypto world, becoming your navigation in the crypto space; learning is your greatest wealth!#巨鲸动向 #加密市场观察 $ETH
