The current market is in an awkward phase of 'ample liquidity but insufficient confidence'.
Current situation of the crypto market:
BTC/ETH$ has become the 'large-cap stocks' and 'benchmark assets' in the crypto market, with trends more affected by ETFs and macro sentiment, and its consolidation indicates that large funds are on the sidelines.
The market is experiencing a widespread decline: indicating that market risk appetite is extremely low, and funds are unwilling to enter high-risk 'small and medium-sized enterprises'.
Growth in stablecoin supply (+50%): This is currently one of the most critical bullish signals. It means that the ammunition is ready, with a large amount of funds 'lying in wait' in the form of stablecoins, just waiting for a clear catalyst (such as sustained large net inflows from ETFs, a significant agreement breakout, clear regulations, etc.) to enter the market.
What should we do now? - Strategic thinking
Based on the above analysis, we can derive some action frameworks:
Identify patterns, avoid risks:
For altcoins like $MMT with extremely low circulation and long unlocking periods, driven by events, remain highly vigilant. Do not participate in futures speculation, and do not chase high spot prices.
Core principle: Don't play games that you don't understand and are obviously designed.
Layout for the future, maintain patience:
Market structure is healthy: Decreasing leverage and increasing stablecoins are the foundation of a healthy market. What is needed now is patience (HODL) and faith.
Abandon the 'four-year cycle' dogma: The market is constantly evolving, and narratives are changing. The current driving forces are spot ETFs, traditional financial institutions entering, real-world assets (RWA), and compliance. Keep up with these new narratives.
Focus on leading indicators and sector rotation:
Movements in privacy coins ($ZEC, $DASH) are a very important signal. These types of coins usually lead the way at the beginning of altcoin seasons or when the market is looking for new narratives.
Keep a close eye on the capital flow of BTC and ETH ETFs, as this is a barometer for large funds.
Pay attention to on-chain activity; if the TVL and active address count of DeFi start to rebound, it will be another signal of market recovery.
Short term: The market is dominated by ‘套路盘’ like $MMT and general low sentiment, making operations challenging; defense and observation should be the main strategies.
Medium term: The substantial reserves of stablecoins and potential macro liquidity injections indicate that now is the time for accumulation and layout.
Strategy: Stay alert, remain vigilant, and maintain your layout. Focus your funds on high-quality assets that you truly understand and have a long-term narrative backing, ignoring short-term noise and temptations.
This market always rewards those who are patient, disciplined, and can think independently.
