Crypto Market Outlook: A Clear Direction May Emerge After September

Recently, I have had more time to reflect on the market, and I would like to share some personal insights.

I believe the overall trend of the crypto market will only become clear after September. Considering the macroeconomic resistance, summer liquidity constraints, and quarterly position adjustments, the real market dynamics will only become apparent when participants return after the August holidays. In recent market activities, most altcoins have risen mainly due to short squeezes. Traders have been influenced by previous rebounds to chase prices, but there is a lack of support from long-term holders. As expected, most tokens that surged dramatically subsequently experienced severe corrections.

Ethereum rebounded unexpectedly, with AI and certain tokens that had previously been underperforming leading the rebound. In contrast, tokens with actual use cases, strong fundamentals, or buyback mechanisms showed resilience, experiencing smaller declines and recovering faster. A few insights can be drawn from this:

1. The demand for Bitcoin is real and persistent.

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

2. The internal differentiation of altcoins intensifies

Funds will eventually flow back to altcoins, but not in a comprehensive manner. Only tokens with clear use cases and real applications are likely to attract investment. This is the reason why Ethereum may outperform other public chains. Clear regulations, growth in DeFi usage, a deflationary structure, and the demand for staking create a strong positive cycle. Moreover, ETH's long-term performance has not met expectations, and there are still potential buyers in the over-the-counter market.

3. Venture capital-supported tokens have structural risks

The unlocking of tokens will continue to put pressure on prices. When liquidity is insufficient, the ongoing selling pressure from validators and early investors limits the upside potential. This makes the outlook for overvalued tokens listed on certain centralized exchanges bleak. Tokens from certain ecosystems, in particular, face persistent selling pressure due to their validator reward structure.

4. Some tokens have structural advantages

Fair issuance, no venture capital unlocking pressure, and tokens entirely based on attention have structural advantages. This pure speculative mechanism has played a role in the early cycle.

But I think this phase is coming to an end. Certain token generation events and the launch of hot tokens may signify the peak of attention. After that, relevant interest begins to wane. Even during the April rebound, the performance of certain public chains was not as good as ETH. If most people are already holding, who will be the marginal buyers when the hype fades?

Some tokens may still perform well, especially those that have gained popularity on social platforms outside the crypto market. These may still bring asymmetric returns. However, the era of purely speculative tokens as alpha is over. Only tokens with strong narratives and market recognition have true speculative value.

Ironically, the fatigue over venture capital-backed tokens has created opportunities for fairly issued Web2/3 projects, which could become the next wave of wealth growth. To seize these opportunities, active participation in on-chain activities is necessary. Large opportunities always arise during information asymmetry, and once they become widely known, they lose their value.

This is why I pay more attention to the on-chain market. The success of a certain project has sparked the desire to seek the "next opportunity," and capital has begun to chase narratives similar to fair issuance. Just like someone earning massive wealth by trading a certain token, attention guides capital flow.

5. Future Market Trends

So, if speculating on tokens is no longer an opportunity... what will come next?

My view: The combination of AI and encryption.

If you pay attention to my updates, you will find that my operations in this round are mainly focused on certain tokens and AI.

Just like the DeFi summer, most early AI projects fail after the hype. But projects that are truly based on practicality are quietly building during the bear market, and we have already seen some projects emerging on-chain.

As the profits from speculation dry up, attention naturally shifts to new narratives. AI, with its clear practicality, is well-suited to become the next hotspot.

Many AI x Crypto projects adopt fair distribution, echoing the narrative of the aforementioned successful cases.

This is why I have been researching and positioning myself in this field recently. There is no need to rush into building a position now, but I believe that if the market strengthens again, this field will hold the greatest asymmetric opportunities.