Bull and Bear Persimmon Market Analysis: Liquidity and Supply Changes
Viewpoint: The market tends to view bull and bear markets in a linear way, but the actual situation is more complicated. Liquidity and token supply are key factors.
Liquidity: Crypto market liquidity is lower than traditional finance. The current liquidity has increased slightly, but the token supply has increased significantly, causing the market to fall into a "consumption arena".
Token supply: Supply is an important factor in market volatility. In 2021, liquidity was low and supply was small, and the market soared; in 2022, liquidity was low and supply was high, and the market fell. In 2023, the supply increased exponentially, making it difficult for the market to benefit from liquidity, and the winners are usually experienced participants or those with inside information.
Future Outlook: The market is expected to enter a rotation phase in the next 6-18 months. Increased liquidity will bring specific opportunities, but there will be no more bull market feasts in 2021. The market will be divided into high-quality assets and other tokens.
