Crypto Market Outlook Analysis: Bitcoin Demand is Real, Altcoin Differentiation is Intensifying

As Bitcoin approaches the $110,000 mark again, market sentiment remains high. However, recent market fluctuations have shattered some investors' illusions once more. Unlike the panic seen in most altcoin markets, Bitcoin and Ethereum have shown strong resilience. So, how will the market develop in the future? Which areas may harbor super opportunities?

After deep reflection over the weekend, I have the following views on the current market:

The true direction of the crypto market may not become clear until after September. Considering factors such as macroeconomic resistance, summer liquidity constraints, and quarterly rebalancing, market participants will not fully return until after the August holidays. Recently, the rise of most alts has been primarily driven by short squeezes, lacking support from long-term holders. As expected, many tokens that surged have subsequently experienced equivalent sharp declines.

The rebound of Ethereum exceeded expectations, with sectors such as AI and MeMe coins, which had previously declined significantly, leading this wave of rebound. In contrast, tokens with actual utility, strong fundamentals, or buyback mechanisms demonstrated greater resilience and recovery. From these phenomena, we can draw the following insights:

1. The demand for Bitcoin is real and lasting

Traditional capital is continuously flowing into the Bitcoin market through regulated channels such as ETFs. The nature of the funds supporting Bitcoin is completely different from previous cycles, which is why large-scale liquidations are unlikely to occur unless there is a significant macro event impact.

2. Alts Internal Differentiation Intensifies

Funds will ultimately flow back to the altcoin market, but it won't be comprehensive. Only tokens with clear use cases and practical application scenarios are likely to attract these funds. This is also why I believe Ethereum will outperform other public chains. Increased regulatory clarity, rising DeFi usage, deflationary mechanisms, and staking demand together create a strong positive cycle. Moreover, due to Ethereum's long-term failure to meet expectations, there are still many potential buyers waiting on the sidelines for the right opportunity.

3. Tokens Supported by Venture Capital Face Structural Risks

Token unlocking will continue to put pressure on prices. In the case of insufficient liquidity, continuous selling from validators and early investors limits the upside potential. This is also why I believe that the prospects for highly valued tokens listed on centralized exchanges are not promising. Tokens from certain ecosystems are particularly facing sustained selling pressure due to their validator reward structures that lead to this situation.

4. The advantages of MeMe coin are fading.

MeMe coin previously had structural advantages, such as risk-free investment unlocking and fair distribution. However, I believe this phase is coming to an end. The issuance and launch of tokens for certain popular events mark the peak of attention for MeMe coin. After that, interest in MeMe coin began to wane. Even in the recent rebound, the performance of certain public chains is still not as good as Ethereum.

In the future, only those MeMe coins with strong narratives and widespread market recognition will have real speculative value. Ironically, the fatigue towards venture-backed tokens has opened a window of opportunity for fairly launched Web2/3 projects, which could become the next wave of wealth creation.

5. Future Market Trends

If MeMe coin is no longer the main opportunity, then where is the next hotspot?

My view is that the combination of AI and encryption will become a new focus.

Just like the early DeFi boom, most initial AI projects failed after the hype. However, truly practical projects are quietly building during the bear market. We have already seen some projects emerging on the chain.

As the popularity of MeMe coin cools down, market attention will naturally shift to new narratives. AI, with its clear practicality, is well-suited to become the next trend. Many AI x Crypto projects adopt a fair distribution model, echoing the narratives of early successful cases.

This is why I have been spending time recently to research and lay out my position in this field in advance. Although there is no need to rush to establish a full position now, I believe that if the market experiences a strong rally again, this field will hold the greatest asymmetrical opportunities.