Metrics Ventures' October Market Observation Guide for the Encrypted Market Secondary Fund
1/ The market has continued the disorderly consolidation that has lasted for 6 months, with trading volume occasionally amplified but still generally sluggish, and a small number of Altcoins have attempted to break out independently, but due to the obvious lack of liquidity, most attempts have ended in failure.
2/ Although the industry's chaotic state is comparable to mid-2023, what has quietly happened is a fundamental change in the path of capital flow and the mentality of the participating players in the market, and the on-chain money-making effect during the month has not been bad. In our view, the sectoral trend that has been split since the beginning of 2024 has been repeatedly confirmed for more than 6 months, and the industry's turnaround may be inevitable.
3/ From the current perspective, we believe that the direction of the capital markets in China and the US, the elections, and the upcoming FOMC are not events that the digital currency market is worth betting on. Returning to the essence of capital and chips, unless there are new black swan events that disrupt the market, the upward trend in encryption is still ongoing, and avoiding the net worth erosion caused by the confusing bull-bear game at the end of the disorderly fluctuations, holding and waiting is the best strategy.
Review and Commentary on the Overall Market Situation and Market Trend
The market since September has essentially given us many important signals in our view:
①After several confirmations of the capital market (i.e., currency price trends), fundamentals (project updates and innovations), and information (i.e., offline conferences) since March 2024, more cryptocurrency market funds have finally chosen the pure chip betting, a retro form, returning to their original intention, which is also another steel nail driven into the coffin of the so-called value coins. The only remaining long-term theme in the industry is still BTC, casinos, and payments (stacking).
②The chips at the bottom of Ethereum have started a fatal loosening after the upward trend was broken a few weeks ago, considering the scale and reasonable expectations of Ethereum ETFs in the near future, Ethereum's real big test has arrived, from an industry perspective, there is only one way to save this decline, that is, the injection of excessive liquidity and the exclusivity of gameplay updates that far exceed the previous round of DeFi occurring in Ethereum, and the time left for Ethereum is quietly counting down.
③The pure chip rebound of Altcoins is not smooth, the overall success rate and the attracting trading volume are too shrunken, to the extent that there is another dilemma of VC/ANTI-VC sector in the market, in fact, the path of capital inflow/outflow in the digital currency industry has undergone what may be a decisive change in 2024, further curbing the space for VC's later exit, and the situation may deteriorate faster and deeper than expected.
④On the overall market, the volatility is becoming more and more disorderly, in fact, both the rise and fall have no strong external factors to be expected, and the weakness in the market is also evident from the trading volume, in the stage of disorderly fluctuations, both the bull and bear have no value to bet, we focus on the price behavior around the support and resistance levels to avoid unnecessary erosion.
The tide is surging, and those who follow the trend will prosper, overall, if the consensus of the global reservoir based on casinos is the general trend, Liquid Ventures must go with the flow, we have already established the first outpost, and in the future we may further perceive the space for the industry's future in it.
