Original Content:
Author: Azuma
On the day of the “big promotion”, the decline of cryptocurrencies continues.
With Bitcoin falling below 65,000 USDT this morning, ETH and many other mainstream altcoins are once again experiencing a collective slump. The real-time market interface of Eu Yi OKX can be described as a “river of blood” at the moment:
ETH fell to a low of 3,350 USDT at one point, currently trading at 3,402.44 USDT, with a 24-hour decrease of 5.64%;
SOL fell to a low of 127.22 USDT at one point, currently trading at 132.03 USDT, with a 24-hour decrease of 10.98%;
PEPE fell to a low of 0.000009573 USDT at one point, currently trading at 0.00001013 USDT, with a 24-hour decrease of 16.18%;
OP fell to a low of 1.67 USDT at one point, currently trading at 1.74 USDT, with a 24-hour decrease of 15.85%;
STRK fell to a low of 0.6614 USDT at one point, currently trading at 0.71 USDT, with a 24-hour decrease of 22.62%;
TIA fell to a low of 6.007 USDT at one point, currently trading at 6.38 USDT, with a 24-hour decrease of 21.04%;
In addition, the newly listed ZK yesterday fell below 0.2 USDT at one point, dropping to a low of 0.1906 USDT, currently trading at 0.1935 USDT, with a 24-hour decrease of 36.4% (based on pre-market price calculation)… at this point, some users even joked, “ZK is truly the Endgame…”
Affected by the overall market downturn, the total market value of cryptocurrencies continues to shrink. According to CoinGecko data, the current total market value of cryptocurrencies has dropped to 2.46 trillion US dollars, with a 4.5% decrease in the past 24 hours.
In terms of derivative trading, data from Coinglass shows that in just the past 1 hour, the total amount of liquidation across the network has reached 178 million US dollars, with the majority of it being long positions liquidated, amounting to 173 million US dollars. In terms of currencies, BTC and ETH have been pushed down to second place by “other” currencies, with the latter leading at 41.2 million US dollars.
Bull market unrelated to altcoins
Looking back at the overall market changes in this bull market cycle, although BTC once surged to new historical highs, altcoins (except for meme and a few other sectors) have never been able to meet investors’ expectations.
Especially when BTC entered a correction phase since March, the altcoin market has been on a continuous decline, with many popular altcoins such as ORDI, OP, ARB, and TIA experiencing maximum cumulative declines of over 70%.
From the current market situation, the overall trend of altcoins seems to have completely decoupled from BTC and ETH. Considering that most retail investors’ positions are mainly in altcoins, many retail investors lament, “Watching Bitcoin hit new highs, while their own positions continue to shrink.”
Yesterday, Odaily Planet Daily published two analysis articles on market liquidity and the trend of altcoins: “Data Extraction: ETF Delaying the Real Bull Market” and “Times Have Changed, This Cycle of Altcoin Season Is Missing”.
Based on the expectations given in the two articles and other market analyses, the main reasons for the decoupling of altcoin trends include:
1. The approval of ETFs has changed the market’s liquidity transmission model. Previously, incremental funds entering the market usually followed the path of “stablecoins – BTC, ETH – altcoins”, but now incremental funds from traditional markets are more likely to directly invest in BTC through ETFs, causing a lack of liquidity in the altcoin market.
2. The continuous unlocking of “VC tokens” brings continuous selling pressure, leading to a market situation where supply exceeds demand. Looking closely at the circulation changes of some altcoins, you will find that although the prices of some tokens continue to decline, their circulating market value continues to reach new highs.
3. High-priced new projects are continuously drawing away the remaining liquidity in the market. Projects like io.net, ZKsync, LayerZero, Blast… a bunch of long-awaited popular projects are queuing up to go live, with FDV generally reaching levels of several billion US dollars, further exacerbating the lack of liquidity in the altcoin market.
Altcoins in their darkest hour, institutions show disagreement
In the current darkest hour, predictions about the future market trends of altcoins seem to have reached a crossroads, with various institutions giving completely different assessments.
Quinn Thompson, founder of the crypto hedge fund Lekker Capital, directly advised against investing in altcoins at this time.
Thompson pointed out several indicators of market instability, including high leverage and open positions, lack of panic buying, and stagnant stablecoin supply. He believes that the market is experiencing increasing selling pressure, especially from venture capital funds in need of raising funds, leading to more selling than buying. This situation, coupled with low summer trading volumes, makes it difficult for altcoins to attract capital.
Andrei Grachev, co-founder of DWF Labs, predicts that there will be a bull market for altcoins in the next few months, but the condition is that BTC remains stable.
Grachev stated that since March 2024, the Google search volume for altcoins has been declining. A stable Bitcoin price can inject confidence into the market, but it cannot increase by 50 times, at least not now, while altcoins can. If the Bitcoin price can remain stable, a wave of (altcoin) bull market is expected to occur within the next few months.
What are the whales up to?
After this morning’s short-term decline, Lin Chen, Head of Asia-Pacific Business at Deribit, revealed that the largest single bulk options transaction today was when a whale sold 70,000 call options at the end of July and bought 70,000 call options at the end of the year, totaling 100 BTC, paying 883,000 US dollars.
Lin explained that this means the whale’s current attitude is “short-term bearish, long-term bullish”, probably thinking that everyone is on vacation in the summer, but expects a big market rally by the end of the year, with Bitcoin’s price breaking through 70,000 US dollars again.
Combining with the institutional forecast article “Big Fluctuations Coming, How Institutions View Future Market Trends?” compiled by Odaily Planet Daily last week, this also aligns with the majority of institutions’ predictions for the future market trends of BTC.
However, considering the current decoupling situation between altcoins and BTC, these forecasts are difficult to apply to altcoins.
For now, the only effective advice we can give at the operational level is not to leverage altcoins, control risks, and avoid impulsive decisions.
