BTC hit ATH, approaching the milestone of $100,000, however the market is still in a state of depression, many of us here have not even reached the shore yet, so why is it only BTC that is flying, each meme has liquidity and growth, and what should we expect and do at this time? Let's review with Allinstation what the market is going through to have different perspectives on the market!
Where is the money now?
If we count from the time BTC broke the ATH $73K, the market has actually only run for about 2 weeks, and we all feel that currently only Bitcoin has a tendency to race to break the ATH, while the other Altcoins are still "lying still", because at present when the market is printed money, this money is mainly used to push the price of Bitcoin
Looking at the rounds of minting money in August, only 2 billion dollars were minted, and then it wasn't until the beginning of October that we minted another 1 billion dollars, but the price of Bitcoin still hasn't shown any signs of growth, most likely because the money printed is waiting for the Presidential election to be over.
Since Trump was elected, the market has been extremely excited and Bitcoin has officially broken its record, followed by a series of days when money was pumped in, the price of Bitcoin has been rising continuously, while the price of Altcoins and the market capitalization of Altcoins have not seen any significant fluctuations.
BTC/ETH ETF causes money to withdraw from the game
The nature of the money flow in crypto is always in circulation, for a user participating in crypto, the first thing they do after adding liquidity to the market is to deposit money into the exchange => then explore DeFi, the Web3 world => from there the money is kept in the crypto world => when many games are drawn, causing an investor to be interested => the new ecosystems, new Altcoin platforms have buyers and sellers.
However, the nature of these ETFs is to buy and hold BTC and ETH, then traditional investors can "own" BTC and ETH through these ETFs => this somewhat narrows the liquidity funnel, causing the money to no longer circulate as smoothly as before.
We can clearly see the clear correlation between the rise in BTC price + the money minted + the continuous positive netflow of Bitcoin ETFs of over $6 billion + the continuous sharp decline in the amount of Bitcoin on CEX exchanges => BTC is being stored in "cold wallets", "storage vaults" by large investment funds.
In this cycle, we lack the large-scale participation of retail investors through direct fiat conversion into crypto financial instruments similar to the ICO in 2017 and the NFT boom in 2021. In those periods, new users directly deposited fiat money into exchanges, exchanged for stablecoin or ether, and withdrew money to participate in crypto speculation activities. In 2021, we have seen large transaction patterns when withdrawing money from Coinbase directly to OpenSea, and MoonPay has developed strongly due to the demand to convert fiat to invest in NFT.
In this cycle, the credit lines originating from cryptocurrencies have been depleted and the remaining brothers in the industry are all veteran chickens, so the rewards and airdrops have been quickly exploited. New retail investors outside the industry are now being attracted to TradFi products without going through the "altcoin casino" channel from CEX or DeFi on the chain, now the funnel flow seems to be narrowing.
Memecoins are the star of this color now?
Currently, we can see that the entire market only has meme coin transactions that are strongly driven by "Whales" with a revolving profit flow into meme trades, rather than new hot money flowing in.
To better understand why memecoins are so prominent in this cycle, you can read these two articles:
- Binance's Perspective on Memecoin and How to Approach Memecoin at This Time
- Is the Memecoin Supercycle Worthy of FOMO?
Additionally, there are quite convincing reasons for the growth of memes in this cycle:
- Stories of price growth from memes easily attract retail capital
- Memecoin is used as a card to accumulate Tech Coin
It cannot be denied that the stories of $DOGE or $SHIBA from the previous season have extremely caused FOMO for the entire market or even people who know nothing about Crypto, vaguely hearing the story of becoming a millionaire overnight, and this season those stories are even more built, from $PEPE to $BONK $WIF or the recent $PNUT, although not yet reaching the coverage level of $DOGE, but currently the signs show that the purpose of attracting users is similar.
Furthermore, when Tech Coins are not rising in price, even though they are in an accumulation zone, or even some Tech Coins have broken out of the accumulation zone like $SAGA and $TNSR, the psychology of the brothers in the past 1-2 weeks has had the intention or is jealous of the meme market, and has the intention to join this market => This is what makes users ready to cut off the Tech Coins they are holding to switch to playing Memecoin.
So what should be done at this time?
It is highly likely that the market will still have an Altcoin season wave for technology coins, because Memecoin can play a very good role in attracting players, but what makes the market grow is technology coins because:
- Reasonable reasons to cling to and drive prices => Attracting traditional "value-investing" investors, not just betting like a "online casino" memecoin => The crypto market expands
- Truly useful technology => The real applications from crypto projects have been very helpful for the Blockchain industry itself => Real demand
- Many large funds have poured in big money thanks to real technology, real value => More money to develop
=> Read more:Upcoming Alt Season - Choose Memecoin or Technology Coin?
Furthermore, Tokenomic is also something that helps us time the market and the price increase of the project, the tokenomic created by the project founders and the vesting time for each project are all estimated by them with not too much difference. One thing I see in the tokenomic of the coins from the previous season is that the peak only occurs after all the coins start to be distributed.
And this season, the altcoins have a tokenomic design with the timing starting to distribute tokens to the components from the end of Q1/2025 => We can time the peak of the altcoin season to be in the middle of the year => Meaning it can start to rise from the beginning of Q1/2025
However, as we have witnessed since 2023, not all Altcoins, not all ecosystems will be pushed up at the same time, but there will be a selection as well as a gradual push for each ecosystem, brothers can take advantage of the time to filter the portfolio, see if the price charts have shown signs of increase, break out of the accumulation zone like $SAGA, $TNSR or $SEI yet and are they in a narrative that the market is interested in?
The prominent trends are probably already very familiar to the brothers, we have come to this point, we are very close to the threshold of paradise, perhaps the market is waiting for Bitcoin to touch the psychological resistance around $100K, and then we will think about the Altcoins starting to run together. Firmly trusting in your own analysis and decisions is essential at this stage.
