I often say that the liquidity of many altcoins may never come back, or it will take a long time to return to the level of June this year. Moreover, I have to tell my friends who are engaged in investment a bad news: your book profits may also become uglier and uglier.
Why do you say that? There are several reasons:
1: Many altcoin projects are actually selling their own coins. The attractiveness of these projects is declining, and they have not made much money. Or, they may have sold out their coins when the market was good before.
2: Those projects invested by large institutions in 2022 are now about to start unlocking a large number of tokens. But the problem is that these projects have not attracted enough buyers and have not become "hot cakes" in the market. As a result, everyone is wondering whether they should sell their hands quickly.
3: For those market makers, the cost of making markets on an old project that no one pays attention to is getting higher and higher. Because of insufficient liquidity and insufficient market depth, market makers can't make much money.
4: Users in the community, their attention and money are focused on mainstream currencies and those really popular projects. As a result, fewer and fewer people are willing to buy altcoins in the market, and liquidity is increasingly concentrated in a few projects.
Although these views have only been partially confirmed in the recent market rise, such as LDO, which performed well during the previous decline, it is now starting to fail, with a market value of $1.7 billion falling from $1.7 billion in July to $1 billion now. But on the other hand, some altcoins may need to double in price to return to the level when the market was good this year.
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