Crypto Assets Market Trend Analysis and Outlook

Recently, there has been an opportunity to reflect on market trends, and I would like to share some personal insights.

It is expected that the overall trend of the Crypto Assets market will only become clear after September. Considering factors such as macroeconomic resistance, limited summer liquidity, and quarterly position adjustments, the real market dynamics may only emerge after the August holidays, when market participants return. From recent market activities, most altcoins' rises are primarily driven by short squeezes. Traders are influenced by the previous rebound to chase up, but lack support from long-term holders. Most people have already been frustrated during the previous market adjustments. As expected, most tokens that surged sharply subsequently experienced the same severe pullback.

Ethereum has experienced an unexpected rebound, with AI-related and certain specific tokens leading this surge. In contrast, tokens with practical use, strong fundamentals, or buyback mechanisms have shown greater resilience—experiencing smaller declines and recovering more quickly. Certain tokens like Syrup, Hype, and AAVE are typical examples. Although SPX belongs to a specific category, its structure is unique. The following observations can be summarized from this:

1. The demand for Bitcoin is real and enduring.

Traditional capital is gradually entering through regulated channels such as ETFs. The nature of the capital supporting BTC is drastically different from previous times, which reduces the likelihood of large-scale BTC liquidation, unless there is a significant macro event.

2. The differentiation of altcoins is intensifying

In the long run, funds will flow back to altcoins, but it will not be a comprehensive coverage. Only tokens with clear purposes and actual application scenarios are likely to attract these funds. This is also why Ethereum may outperform other public chains. Clear regulations, the rising usage of decentralized finance, deflationary structures, and staking demands together create a strong virtuous cycle. Additionally, since ETH has long failed to meet expectations, there are still potential buyers waiting in the over-the-counter market.

3. Certain tokens face structural risks

Token unlocks will continue to exert pressure on prices. In the case of insufficient liquidity, the ongoing sell-off by validators and early investors limits the upside potential. This makes the future prospects of certain overvalued tokens bleak. In particular, tokens within the Cosmos ecosystem face ongoing selling pressure due to their validator reward structure.

4. Certain types of coins have structural advantages

These types of tokens are usually fairly issued, with no risk of investment unlock pressure, and are completely based on attention. This pure speculation mechanism performs exceptionally well in early cycles.

But this stage seems to be coming to an end.

Certain events mark the peak of interest in this type of token. After that, related interest begins to wane. Even during the rebound in April, some public chains did not perform as well as Ethereum—if most people already hold, who will be the marginal buyer when the heat fades?

Some tokens may still perform well, especially those promoted by influential figures on mainstream social media platforms. These may still yield significant returns. However, the pure speculation era has ended. Only tokens with strong narratives and market recognition truly hold speculative value.

Interestingly, the fatigue and skepticism surrounding certain tokens have created opportunities for fairly issued Web2/3 projects, which could become the source of the next wave of wealth growth.

Some projects are great examples. However, seizing these opportunities requires active participation in on-chain activities. Big opportunities often arise when there is information asymmetry. Once widely known, the returns will diminish.

This is why I pay more attention to the on-chain market. The success of certain projects has sparked enthusiasm for finding the "next opportunity," and capital has begun to chase similar fair issuance narratives. Just like someone earning massive wealth by trading specific tokens — attention guides capital flow.

5. Future Market Trends

If a certain type of token is no longer the main opportunity, what is the next hotspot?

My point of view: The integration of AI and Crypto Assets.

If you follow my updates, you will find that most of my operations during this cycle—except for certain early public chains and venture capital-supported tokens—are concentrated on specific tokens and the AI field.

• Similar to the decentralized finance summer, most early AI projects fail after speculation. However, projects that are truly based on practicality are quietly building in the bear market. We have seen some projects emerging on-chain.

• As profits from certain tokens diminish, attention naturally shifts to new narratives. AI, with its clear utility, is likely to become the next focus.

• Many AI x Crypto Assets projects adopt fair distribution, echoing the model of certain successful projects.

This is why I research and lay out my plans in this field during market calm periods. There is no need to rush to establish a full position now - but I believe that if the market rises strongly again, this field will hold the greatest asymmetric opportunities.