This week's market has dropped too much, to the point where everyone is silent. Gold, silver, and U.S. stocks have collectively plummeted, adding to the woes of the already illiquid crypto circle!
The start of the crypto market in 2026 has dampened all investors with a 'liquidity vacuum-style crash': Bitcoin has fallen below $75,000, Ethereum is approaching $2,100, over 420,000 people liquidated in 24 hours, and the total market value has evaporated by over $110 billion. After this indiscriminate massacre, the rebound of mainstream coins is described as 'arduous,' while among many small and medium-sized cryptocurrencies, the performance of WAL sea elephant Peiqi has captured the attention of many. In a market with depleted liquidity, why can't Bitcoin and Ethereum move? Can WAL break out of an independent trend and seize opportunities in chaotic times?
Let's first talk about the core of this crash, which has never been a single negative factor but rather the butterfly effect triggered by a liquidity vacuum. With the nomination of a hawkish chairman of the Federal Reserve, the market's concerns about sustained high-interest rates have led funds to withdraw from high-risk assets. The escalation of geopolitical conflicts between the U.S. and Iran should have made Bitcoin, an asset typically considered safe, fall victim to the collapse of the 'digital gold' narrative and be classified as a high-risk asset for sale; new regulations on crypto capital in Hong Kong have raised the bar for banks' participation, and over $1.2 billion in net outflows from the U.S. spot ETF in a week has seen institutions, the 'stabilizers' of this market, exit directly, leading to a deep decline in market liquidity to levels last seen after the FTX collapse in 2022. A 1% slippage in Bitcoin now requires a selling order of $2.3 million, and small capital exits can trigger violent price fluctuations. Even more deadly is the backlash from high leverage; before the crash, $7.8 billion in open contracts hung in the air, and after breaking the support at $11, the cycle of 'down—liquidation—down' began, with market makers withdrawing liquidity to protect themselves, forming a true 'liquidity black hole', where all assets became lambs to the slaughter. This crash is essentially a collective stampede under the exhaustion of liquidity.
The dismal rebound of Bitcoin and Ethereum after the crash was already predetermined. As the two largest coins by market capitalization, their movements have always been deeply tied to the trends of large funds. After institutions withdraw, retail funds simply cannot support a large-scale rebound. On the Bitcoin side, the myth of 'digital gold' has completely shattered—while gold reaches historical highs in the context of geopolitical conflict, Bitcoin has simultaneously dropped alongside tech stocks, with a 30-day annualized volatility of 42%, far exceeding gold's 12%. Morgan Stanley directly stated that 'mainstream funds have never regarded it as a true safe-haven asset.' The wave of miner shutdowns spreads, the network's computing power plummets by 20%, and the weakness in fundamentals makes funds reluctant to bottom-fish; Ethereum is even worse, exhibiting a typical bearish structure of 'lower lows and lower highs', with near-hourly declines resembling a 'no support' pattern; even when the RSI enters the oversold zone, there are no signs of stabilization, and the resistance zone of $2300-2470 remains like a chasm—without a significant breakout, all rebounds are merely 'ephemeral'.
More critically, Bitcoin and Ethereum's market caps are too large, and in a liquidity vacuum, the cost of capital pushing the market is too high. In a market with low trading activity and strong cautious sentiment from funds, without institutional funds entering to support the bottom, pushing the two major mainstream coins to achieve effective rebounds requires massive capital to absorb selling pressure, while the current market funds are more inclined to 'safe-haven observation' rather than taking proactive action. Moreover, the shadow of increased global regulation looms large, with the U.S. SEC's lawsuits against leading exchanges and the CFTC's plans to lower futures leverage making large funds cautious about mainstream coins; without dual support from fundamentals and capital, rebounds can only oscillate at low levels.
So the question arises, in a market with exhausted liquidity, do small and medium-sized coins like WAL have a real opportunity? The answer is yes, there is an opportunity, but it is hidden in 'structural markets', rather than in general bullish trends.
First of all, the core advantage of small and medium-sized coins is their small market capitalization and low cost of capital leverage. Unlike Bitcoin and Ethereum, which require massive capital to pump, coins like WAL, in a liquidity vacuum, are more easily noticed by existing funds in the market, forming localized capital clustering. When mainstream coins cannot move due to a lack of funds, some unwilling funds will turn to small and medium-sized coins to seek trading opportunities; as long as there is a certain amount of buying support, they can achieve a rebound independent of mainstream coins, which is also the natural advantage of small and medium-sized coins in turbulent times.
Secondly, the opportunities for WAL also lie in the switching of market styles. After this round of crashes, the logic of the crypto market has shifted from 'general bullishness' to 'selective targets'. Funds no longer blindly chase mainstream coins, but rather place more importance on the fundamentals and ecological grounding of coins. If WAL can maintain stable operations in the context of liquidity exhaustion, such as landing new application scenarios, improving community activity, and increasing incentives for liquidity mining, it can stand out among a host of weak small and medium-sized coins and attract the attention of existing funds. It is important to note that during overall market weakness, 'having fundamental support' is the biggest selling point, much more compelling than mere speculative hype.
However, it must be clear that the opportunities for WAL are always accompanied by high risks. In a market with a liquidity vacuum, all coins are inevitably dragged down by the larger environment; even if WAL has funds grouped together, it is difficult to achieve sustained large-scale increases, and after a rebound, it will likely be accompanied by severe fluctuations; moreover, small and medium-sized coins themselves have weaker liquidity, making it easy to experience extreme 'ups and downs', possibly rising sharply due to a large bullish candle, or significantly falling due to a small amount of selling, requiring high-level position management and stop-loss capabilities from investors.
More importantly, the opportunities for WAL depend on the marginal improvement of market liquidity. If subsequent Federal Reserve policies show signs of easing, geopolitical conflicts cool down, or institutional funds flow back into the crypto market, and the liquidity black hole is filled, then WAL's rebound can go further; but if negative factors persist and liquidity further exhausts, then even the best small and medium-sized coins will struggle against the overall market decline, and the so-called opportunities will merely be short-term oversold rebounds.
In the end, this crash due to liquidity vacuum represents a major reshuffling in the crypto market, washing away leverage, pseudo-concepts, and blindly following funds. The dismal rebounds of Bitcoin and Ethereum are the inevitable results of large funds exiting and weak fundamentals, while the opportunities for small and medium-sized coins like WAL are never about 'turning the tide against the current', but rather about seizing structural oversold rebound opportunities based on their own advantages in the game of existing funds.
For investors, in the current market, rather than getting entangled in when mainstream coins will rebound, it is better to calmly consider the opportunity of WAL: if you are optimistic about its fundamentals, you might as well take a small position, set strict stop-losses, and seize short-term trading opportunities; if you still have concerns about market liquidity, then it is wise to wait for clear stabilization signals in the market—such as increased trading volume, mainstream coins breaking key resistances, and institutional funds returning—before entering the market.
The allure of the crypto market has always been in the 'opportunity amid crisis', but opportunities only belong to those who remain rational and manage risks well. In the cold winter of liquidity vacuum, surviving is more important than anything else, and those assets that can survive the winter will eventually welcome their own market in spring.
