Crypto Market Trend Outlook and Investment Opportunity Analysis

Recently, I have had more time to think about market trends and would like to share some personal insights.

The overall trend of the crypto market is expected to become clear only after September. Considering factors such as macroeconomic resistance, summer liquidity constraints, and quarterly position adjustments, the true market dynamics may not emerge until after the August holidays when market participants return. Recent market activity shows that the rise of most altcoins is mainly due to short squeezes. Traders, influenced by previous rebounds, are chasing the highs but lack support from long-term holders. Most people have already suffered heavy losses in the previous market turbulence. Unsurprisingly, most tokens that surged sharply later experienced similar drastic declines.

Ethereum has rebounded unexpectedly, with sectors that were previously hit hard, such as AI and certain specific tokens, leading this wave of recovery. In contrast, tokens with real utility, strong fundamentals, or buyback mechanisms have shown greater resilience, being not only more stable during downturns but also recovering faster. Certain tokens are excellent examples of this. From this, we can draw the following insights:

1. The demand for Bitcoin is real and persistent.

Traditional capital is gradually entering the market through regulated channels such as ETFs.

The capital nature supporting BTC is completely different from previous periods. This is why large-scale BTC liquidation is unlikely to occur unless triggered by macro events.

2. The internal differentiation of altcoins intensifies.

Ultimately, the funds will flow back to altcoins, but not in a comprehensive manner. Only tokens with clear use cases and practical applications are likely to attract these funds. This is why I believe Ethereum may outperform certain public chains. Regulatory clarity, the continually increasing usage of DeFi, a deflationary structure, and staking demand together create a strong flywheel effect. Moreover, due to ETH's long-standing failure to meet expectations, there are still marginal buyers waiting in the over-the-counter market.

3. Tokens supported by venture capital have structural risks.

Token unlocks will continue to exert pressure on price movements. In the case of insufficient liquidity, the ongoing selling pressure from validators and early investors limits the upside potential. This is why I believe that tokens with overvalued listings on centralized exchanges may not be a good choice in the future. Tokens from certain ecosystems, in particular, face ongoing selling pressure due to their validator reward structures that lead to this situation.

4. Specific types of tokens have structural advantages.

These types of tokens have structural advantages, no venture capital unlocks, fair launches, and are entirely based on attention. This is a purely speculative mechanism, functioning similarly to early cycle dynamics.

But I think this phase is coming to an end.

The launch of certain token generation events and specific tokens marks the peak of interest in such tokens. After this, related interest began to wane. Even during the rebound in April, the performance of certain public chains was not as good as ETH. If everyone already holds a certain public chain token, who will become the marginal buyer when the momentum of these tokens fades?

Some tokens may still perform well, especially those that gained popularity through influencers on platforms like TikTok or Instagram, outside of the crypto market on Twitter. These may still bring asymmetric wealth effects. However, the era of "cute animal coins" as alpha has ended. Only tokens with strong narratives and significant market recognition have real speculative value.

5. Future market trends

So, if specific types of tokens are no longer where the opportunities lie, what will come next?

My view: The combination of AI and encryption.

If you have been following my updates, you would know that most of my operations in this cycle are focused on specific tokens and AI.

Just like the DeFi summer, most early AI projects failed after the hype. However, projects that are truly based on practicality are quietly building during this bear market. We have already seen some of these projects emerging on-chain.

As the profits from certain tokens dry up, attention will naturally shift to new narratives. AI, with its clear utility, is well suited to become the next focal point.

Many AI x Crypto projects are fair launches, echoing the narratives of certain successful projects.

This is why I took the time to research and position myself in this field during the quiet weeks. There is no need to rush to establish a full position, but I believe that if the market experiences a strong rally again, this field will hold the greatest asymmetric opportunities.