Market Trend Analysis: The Diversification of the Crypto Assets Market and the Next Wave of Investment Opportunities

Recently, I took the time during the weekend to deeply reflect on the current trends in the crypto assets market and整理出一些值得分享的观察和见解。

The real directional trend of the crypto market is likely to become clear only after September. The current market is influenced by multiple factors such as macroeconomic resistance, insufficient summer liquidity, and quarterly position adjustments. The true market dynamics may only manifest after the August holidays end and participants fully return. From recent market activities, the rise of most small coins mainly stems from short squeeze effects. Traders are influenced by reflexive reactions from previous market conditions, chasing short-term momentum, but this time there is a lack of real long-term holders’ support. Most investors have already suffered heavy losses in the previous market adjustments, leading to many skyrocketing tokens subsequently experiencing equal magnitude declines.

Ethereum’s performance has been surprisingly strong, with the AI coin and meme coin sectors, which were previously hit hardest, leading this rebound. In contrast, tokens with real utility, solid fundamentals, or buyback mechanisms have shown greater resilience – they were more stable during the downturn and recovered more quickly. Projects like Syrup, Hype, and AAVE are good examples. Although SPX belongs to the meme coin category, its structure is completely different from regular meme coins. From these phenomena, we can draw the following market insights:

1. The demand for Bitcoin shows authenticity and persistence

Traditional capital is gradually entering the market through regulated channels such as ETFs.

The current nature of capital supporting Bitcoin is fundamentally different from past cycles. This is also why large-scale BTC liquidations are unlikely to occur, unless triggered by severe macro events.

2. The differentiation of the altcoin market will continue to intensify.

In the long run, funds will inevitably flow back to the altcoin market—however, this will not be a comprehensive recovery. Only those tokens with clear practical value and application scenarios can attract these funds. This is also why I believe Ethereum will perform better than other public chains. Regulatory clarity, the continuously growing DeFi usage rate, the deflationary mechanism, and the demand for staking together create a strong positive cycle. In addition, due to ETH’s long-term failure to meet market expectations, there are still a large number of potential buyers waiting on the sidelines.

3. Tokens Supported by Venture Capital Face Structural Challenges

Token unlocking will continue to exert pressure on prices. In an environment with insufficient liquidity, the ongoing selling pressure from validators and early investors will limit the upside potential. This is also why I believe that tokens listed on centralized exchanges with overvaluations have a bleak future. Particularly, the tokens within the Cosmos ecosystem face ongoing selling pressure due to their validator reward structure.

4. The Structural Advantages and End of Cycle of Meme Coins

Meme coins have inherent structural advantages: no venture capital unlocking pressure, fair launch mechanism, completely based on community attention. This is a purely market speculation mechanism, just like the performance in the early cycles of the encryption market.

But I think this stage is coming to an end.

The token generation event of Pump.fun and the launch of Trump coin may mark the peak of the meme coin craze. After that, the market’s interest in meme coins began to wane. Even during the rebound in April, the performance of certain public chains was not as good as Ethereum—if market participants had already held enough top public chain tokens, who would become the new marginal buyers when the heat of meme coins fades?

Some meme coins may still perform well, especially those that have gained popularity outside the crypto community, such as coins promoted by influencers on TikTok or Instagram. These projects may still generate asymmetric wealth effects. However, the era of “cute animal coins” as leading indicators for the market has come to an end. Only those meme coins with strong narratives and deep market recognition hold true speculative value.

Ironically, the market’s fatigue and skepticism towards venture-backed tokens have created opportunities for fairly launched Web2/3 projects, which could become an important source of the next wave of wealth growth.

Recent successful cases are good examples. However, to seize these opportunities, you need to actively participate in on-chain activities. When information asymmetry exists, significant opportunities always arise. Once an opportunity becomes widely recognized, its potential for returns is significantly reduced.

This is also why I pay more attention to on-chain market dynamics. The success of certain projects has triggered a craze for finding the “next hit”, with capital starting to chase similar fair launch altcoin narratives. Just like certain meme coin traders earn huge wealth through precise operations—attention will guide capital flow.

5. Next Wave of Market Trend Predictions

If meme coins are no longer the main opportunity, then where is the next hotspot?

My judgment: The integration of AI and encryption technology will become the next focus.

Those who follow my analysis may have noticed that most of my operations in this cycle—after focusing on certain public chains and venture capital-supported projects in the early stages—have concentrated on meme coins and AI-related fields.

Just like the DeFi summer, most early AI projects have faded into failure after a brief hype. However, projects that are truly based on practicality are quietly building during the bear market. We have already seen some of them emerging on-chain.

As the profit margins of meme coins gradually shrink, market attention will naturally shift to new narratives. AI, with its clear practical value, is very suitable to become the next investment hotspot.

Many AI and Crypto Assets integrated projects adopt a fair launch model, resonating with the current market’s pursuit of fairness.

This is why I have spent time researching and positioning myself in this field during the relatively calm weeks in the market. There is no rush to build a full position now—but I believe that if the market experiences a strong rise again, the integration of AI and Crypto Assets will hold the greatest asymmetrical return opportunities.