Last night, Bitcoin broke below the 12.20 low with increased volume, dropping as low as 91500, and then rebounded to 95000 before facing resistance, and again dropped below the 12.20 low early this morning. The market is also giving more negative signals:
1. Bitcoin ETF continues to experience significant net outflow.
Yesterday, the net outflow of Bitcoin ETF reached 443 million USD, the highest net outflow since December 20.
2. The continuous deterioration of market liquidity
In the past 24 hours, the supply of USDT has decreased by 1.15 billion. Although the supply of USDC has increased in the past 24 hours, its increase of 190 million is far from compensating for the reduction in USDT supply. Market liquidity continues to deteriorate.
3. From the perspective of the price-volume relationship, there seems to be some positive signals.
The trading volume when Bitcoin tested the 12.20 low for the second time decreased, and the price quickly returned above the 12.20 low. This indicates that selling pressure weakened during the second test.
So, there are three possible trends for Bitcoin moving forward:
Scenario 1: These two breaks below the 12.20 low represent the final shakeout of the correction phase. Through the shakeout, Bitcoin has either completed or is close to completing its adjustment, and is about to welcome an uptrend.
Scenario 2: Bitcoin has not yet completed its adjustment and will continue to fluctuate downward, reaching near the STH RP (±2000) to complete the adjustment; currently, the STH RP is 86650.
Scenario 3: The bull market has ended, and we are now only in the early stages of a decline.
Considering the development stage of Bitcoin's market, future market catalysts, and the current market environment, I personally believe the order of likelihood for the three scenarios is: Scenario 2 > Scenario 1 >> Scenario 3.
In the altcoin sector, CEX continues to lag behind the overall market, but on-chain funds are very active, especially in the AI sector. Regardless of how the overall market adjusts, the on-chain activity chooses to ignore it; now it’s two different worlds. The main flow this round is on-chain, so everyone must look for opportunities on-chain. On-chain is the trend; opening CEX even for a second disrespects the trend, while on-chain assets keep increasing. Every time I open my CEX funds, they shrink a little; I don't know what's so superior about CEX.
The AI Agent sector continues to reach new highs, led by Virtual on Base and ai16z on the SOL chain, with explosive growth in the related ecosystem, becoming one of the important narratives for 2025.
The Base ecosystem AI track is currently very singular, focusing on the construction around VIRTUAL. Related ecosystem tokens aixbt, luna, game, etc., have all surged. If you are not familiar with AI Agent yet, you can go and experience it.
Ai16z on the SOL chain has already surpassed a market value of 1.9 billion USD, being the first project to use an industrial investment mindset to build a meme ecosystem on SOL. ELIZA has also surpassed 100 million, and more institutions and project parties will join the ai16z ecosystem. If all projects of the ai16z system migrate to the ai16z chain, a market value of over 10 billion is definitely achievable. Various institutions have already built positions, and more AI targets will appear in the Ai16z ecosystem, benefiting the following targets:
1. aicell:
Ai16z on the BNB chain is basically the earliest form of ai16z.
2. kra:
Officially announced as an ai agent for ai16z, with the technical architecture of Eliza + TEE, this narrative is really impressive! Moreover, it is a project under the same fund as spore, which has already gained the attention of ai16z, so we also have reason to believe it can enter the Ai16z system.
