Has the cycle "failed"? — On the current market's structural split and survival strategies

If you're an experienced player who has gone through the last bull and bear markets, you might recently feel a strong sense of dissonance.

Based on past experience, after Bitcoin halving, the market should usher in a vigorous bull run. But the reality is, while indices are slowly climbing, the profit-making effect is far below expectations. Looking at the top gainers, on one side Meme coins are doubling and doubling again on various memes, while on the other side, many so-called "value coins" are stuck on the floor, unmoving.

We can't help but ask: Is the cycle failing, or is it time for our understanding to upgrade?

1. Macro Liquidity: The Crypto World Is No Longer an Island

First, we need to recognize a reality: the crypto space is no longer the isolated "marginal asset" it once was.

In the past, market movements mainly depended on Bitcoin halving, project team pump-and-dumps, and new narratives. But now, the biggest variable influencing the market is the Federal Reserve's stance.

When US bond yields rise, risk assets fall; when CPI data is released, the whole market guesses whether interest rates will hike or cut. Bitcoin's volatility is increasingly resembling the Nasdaq index, as it is being "mainstreamed" by the financial system.

What does this mean? It means the simple cycle of "holding blindly to get rich" may be over. When big money from Wall Street enters, they focus on asset allocation, hedging, and arbitrage, not expecting hundredfold or thousandfold returns like retail investors.

Under the macro liquidity tightening backdrop, it’s unlikely to see the same scene as 2021, where thousands of tokens rose together. Without enough water, you can't feed all the fish. This leads to the first characteristic of the current market: structural differentiation.

2. Supply-Side Imbalance: The Contradiction Between Unlocking Floods and Capital Shortage

The secondary market now faces unprecedented supply pressure.

In the last bull market, too many projects were born, and too many tokens were issued. These tokens went through three years of bear market and are now entering a "massive unlocking period."

Look at high market cap (FDV) projects—daily unlock amounts often reach millions or even tens of millions of dollars. But how much new capital is entering the secondary market? Against the backdrop of the Fed shrinking its balance sheet, incremental funds are already limited.

On one side, there is a continuous sell-off (unlocking selling pressure); on the other, limited buying power. The result? Most altcoins can't rise significantly; when they do, a single bullish candle is quickly crushed by unlocking sales.

This explains why current market conditions are so difficult. It's not that projects lack effort or breakthroughs; rather, the supply-demand structure determines the price ceiling.

3. The Rise of Meme Coins: Retail Investors' Protest and Capital Migration

In this context, the explosion of Meme coins is understandable.

Why do funds prefer to pump Meme coins that seem to have no technical value instead of value coins? Because they can't move value coins. The overhead resistance for value coins is too heavy, unlocking pressure too great—any attempt to pump them just provides liquidity for institutions and facilitates unlocking.

Meme coins are different. They usually have no VC backing, no unlocking pressure, and a clean token structure. Just a topic, a meme, and a consensus among a group of people can ignite a rally.

The carnival of Meme coins is essentially retail investors voting with their feet, resisting the suppression of VC-backed tokens. It’s a spontaneous capital migration from oversupplied sectors to scarce ones.

On a deeper level, this reflects a change in the value anchor points in the crypto world. When "value investing" becomes a tool for institutions to harvest retail investors, the market will revert to its fundamental: consensus equals value. Even if that consensus is just an emoji.

4. Narrative Involution: From Technological Innovation to Attention Competition

Looking back at this year's hot topics—from Restaking to DePIN, from RWA to TON ecosystem, and now AI Meme—you'll notice that real applications are still few, but the speed of narrative iteration is accelerating.

The reason is simple: money is limited, so speed is everything.

In a market where the game is about existing assets, whoever can grab users' attention gains liquidity premiums. Previously, a narrative could be hyped for half a year; now, a hot topic lasts about two weeks at best.

This requires us to adjust strategies. No longer can we just buy into a narrative and wait for it to double. Now, it’s a race of speed, a contest of information gaps.

When you scroll through a platform and see a certain coin, it may have already risen 50%. Jumping in at that moment is likely to be catching a bag. The real opportunities are often in places you can't see—early projects that require your own research, low market cap tokens not yet hyped by big influencers.

5. Survival Strategy: Embrace Uncertainty and Build a Defense System

Having discussed so many issues, how should we respond? Here are three thoughts.

First, lower expectations and adjust your mindset.

Don’t expect to buy a coin and get ten or hundred times returns easily. In a macro liquidity-tightening cycle, an annualized return of 20%-30% is already a high level. Lower expectations to stay calm; only with a steady mind can your operations remain rational.

Second, diversify your portfolio to hedge risks.

Since it’s impossible to predict whether the next hot sector is AI or Meme, allocate some capital to both. Core holdings should be Bitcoin and Ethereum—they are the ballast; satellite holdings can be split into two parts: one for low-market-cap, data-backed potential projects, and another for participating in Meme plays. This way, you won't miss gains or suffer heavy losses.

Third, conduct in-depth research and prepare early.

Writing forces thinking; thinking drives research. When your understanding of a sector is deeper than others’, you can spot opportunities earlier.

In today’s fast-paced information environment, a pump can be over in ten minutes, and everyone will know. Only those who have prepared early can enjoy the biggest gains.

Conclusion

The cycle hasn't failed; it has just changed its form.

From a single-sided rally to structural differentiation, from thousands of tokens rising together to a stark divide, this cycle demands more from investors. You need to understand macroeconomics, tokenomics, narratives, and human nature.

But opportunities always exist. No matter how the market changes, one thing remains unchanged: deep thinkers will always find their own opportunities.

May we all survive this complex cycle and come out stronger.