The rise of altcoins is not driven by funds; it is entirely driven by leverage. Once the leverage is cleared, altcoins will rise without strength!
Currently, altcoins are facing issues like continuous unlocking by VC institutions, stagnant ecosystems, and large market capitalizations that have not been resolved. This rebound driven by leveraged funds comes quickly but also goes quickly.
Will the trend of March occur again? BTC is in a large range of fluctuations, while altcoins are entering a downward trend?
It is very likely that it will. For BTC, due to large institutions, big capital, and even national governments treating it as a strategic reserve, unless there is a black swan event in the US macro economy, it is hard to see a significant drop. However, for altcoins, especially ancient altcoins, lacking ecology and technological explosive potential, the wealth effect for ordinary investors is too low.
Thus, under the influence of funds such as ETF and MSTR, it is very likely that Bitcoin will fluctuate in the range of $80,000 to $110,000 for a while until the next driving event occurs. After this round of liquidation of leveraged funds in altcoins, if no new ecology emerges, it is likely to see a rebound and then continue its downward trend. Strategically, after each major market drop, withdrawing after a 20%-30% rebound is advisable, as greed is not favorable.
After this round of adjustments is completed, let’s see if meme coins will be speculated again as before. If retail funds return to the meme sector, the ecological tokens of SOL will remain strong.
The law of sector rotation:
First, the speed of sector rotation is too fast; it seems that the market makers are in a hurry to get off work, or they make you think they are off work, and the breakout price falls back. When you take a nap, the market makers secretly start working again at midnight, causing you to miss out on profits. The reasons for this phenomenon are not yet entirely clear; the sustainability of capital might be one reason. The market makers want to pump the price but cannot let too many people profit together, as new retail investors and new capital are limited, so they need to consolidate upwards.
Therefore, it can be clearly seen that several public chains are at the core of this round, representing their respective ecosystems and tracks.
First: The Ethereum ecosystem, mainly represented by Ethereum layer one and layer two, DEFI, NFT, etc.;
Second: The SOL ecosystem, mainly represented by MEME, DEPIN, and AI, which are oriented towards TVL and attention economy;
Third: The Base ecosystem, mainly represented by the SOL ecosystem, after the MEME speculation is completed, will have lower GAS fees, smoother on-chain experiences, and more convenient channels for off-chain funds to enter: relying on COINBASE makes it easy to bring fiat currency onto the chain to engage in MEME, along with convenient abstract accounts.
Finally, there is another ecosystem that has not yet started, which is TON. As mentioned earlier, it represents the channel for introducing new traffic from outside the circle, whether in social or gaming.
In other words, the TON ecosystem will become popular again, and TON coins as well as areas related to social and gaming will experience an explosion, but whether it will explode is indeed currently unknown.
