Author: Azuma, Odaily Planet Daily
On the day of the 618 "big sale", the downward trend of cryptocurrencies continued.
As Bitcoin fell below 65,000 USDT in the short term this morning, ETH and many other mainstream altcoins have seen a collective dive again. The real-time market interface of OKX is now a "river of blood":
ETH once fell as low as 3350 USDT, and is currently at 3402.44 USDT, a 24-hour drop of 5.64%;
SOL once fell to 127.22 USDT, and is currently reported at 132.03 USDT, a 24-hour drop of 10.98%;
PEPE once fell to 0.000009573 USDT, and is currently reported at 0.00001013 USDT, with a 24-hour drop of 16.18%;
OP fell to as low as 1.67 USDT and is currently trading at 1.74 USDT, a 24-hour drop of 15.85%;
STRK once fell to 0.6614 USDT, and is currently trading at 0.71 USDT, a 24-hour drop of 22.62%;
TIA once fell as low as 6.007 USDT, and is currently at 6.38 USDT, a 24-hour drop of 21.04%;
In addition, yesterday’s newly launched ZK even fell below 0.2 USDT, and once fell to 0.1906 USDT. It is currently reported at 0.1935 USDT, with a 24-hour drop of 36.4% (based on pre-market price calculation)... In this regard, some users who were numb from the drop even joked: "ZK is indeed Endgame..."
Affected by the overall market downturn, the total market value of cryptocurrencies continues to shrink. According to CoinGecko data, the total market value of cryptocurrencies has dropped to 2.46 trillion US dollars, a 24-hour drop of 4.5%.
In terms of derivatives trading, Coinglass data shows that in the past hour alone, the total amount of liquidation in the entire network has reached 178 million US dollars, of which the vast majority are long orders, amounting to 173 million US dollars. In terms of currency, BTC and ETH were rarely squeezed to second place by "other" currencies, and the latter topped the list with 41.2 million US dollars.
A bull run that has nothing to do with altcoins
Looking back at the overall market changes in this round of bull market, although BTC once refreshed its historical peak, altcoins (except for a few sectors such as meme) have never been able to perform in line with investors' expectations.
Especially after BTC entered the adjustment phase since March, the altcoin market has been “falling and never looking back”, with the cumulative maximum decline of many popular altcoins such as ORDI, OP, ARB, TIA, etc. even exceeding 70%.
Judging from the current market conditions, the overall trend of altcoins seems to have completely decoupled from BTC and ETH. Considering that most retail investors’ positions are mainly in altcoins, this has also led many retail investors to complain: “I watched Bitcoin reach new highs, but my positions kept shrinking.”
Yesterday, Odaily Planet Daily published two analytical articles on market liquidity and the trend of altcoins, namely "Data Extraction: ETFs are Delaying the Real Bull Market" and "Times Have Changed, and the Altcoin Season Will Be Absent in This Cycle".
Based on the expectations given in the two articles and other market analysis, the main reasons for the decoupling of altcoin trends include:
First, the approval of ETFs has led to changes in the market's liquidity transmission model. In the past, the entry path for incremental funds was generally "stablecoins - BTC, ETH - altcoins", but now incremental funds from traditional markets are more inclined to directly invest in BTC through ETFs, which also leads to the inability to continue to transmit funds, resulting in a lack of liquidity in the altcoin market.
Second, the continuous massive unlocking of "VC tokens" has brought about continuous selling pressure, resulting in a market structure of "oversupply" - if you look closely at the circulation changes of some altcoins, you will find that although the prices of some tokens continue to fall, the circulating market value continues to set new highs.
Third, new projects that opened at sky-high prices are constantly draining the remaining liquidity in the market. io.net, ZKsync, LayerZero, Blast... a large number of popular projects that have been hyped for a long time are queuing up to go online, and FDV will generally reach the level of billions of US dollars, further exacerbating the lack of liquidity in the altcoin market.
The darkest hour for altcoins, with institutions divided on opinion
In this darkest moment, predictions about the future market of altcoins seem to have come to a crossroads, and various institutions have even given completely opposite judgments.
Quinn Thompson, founder of 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 interest, lack of panic buying, and stagnant stablecoin supply. He believes that the market is experiencing increasing selling pressure, especially from venture capital funds that need to raise funds, which leads to more selling than buying. This situation, coupled with low trading volume in the summer, makes it difficult for altcoins to gain financial traction.
Andrei Grachev, co-founder of DWF Labs, expects there to be a bull run in altcoins in the next few months, but the prerequisite is that BTC remains stable.
Grachev said that Google searches for altcoins have been declining since March 2024. A stable Bitcoin price can inject confidence into the market, but it can't rise 50 times, at least not now, while altcoins can. If Bitcoin prices can remain stable, a wave of (altcoin) bull market is expected in a few months.
What are the whales doing?
After this morning’s short-term decline, Lin Chen, head of Asia Pacific business at Deribit, disclosed on X that today’s largest bulk option transaction was that 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 and paying $883,000.
Lin explained that this means that the whale’s current attitude is “bearish in the short term and bullish in the long term.” It probably feels that the summer vacation is over, but is optimistic that there will be a big market trend at the end of the year and the price of Bitcoin will once again exceed $70,000.
Combined with the institutional forecast article "Big volatility is imminent, how do institutions view the future market?" compiled by Odaily Planet Daily last week, this is also in line with the judgment of most institutions such as Bitfinex on the future market of BTC.
However, considering the current decoupling of altcoins from BTC, these predictions are difficult to apply to altcoins.
For now, the only effective advice we can give at the operational level is to not leverage altcoins, control risks, and avoid being impulsive.
