Original text: RVM, Compiled by: Yuliya, PANews
In the digital world of the RuneScape game, one of the most notorious predatory strategies in the "Wilderness" area is "luring". This technique involves exploiting the naivety and greed of unsuspecting players, by making false promises of safety, profit opportunities, or good intentions, and luring them into the dangerous depths of the Wilderness - a high-risk player-versus-player (PVP) zone.
This mechanism is simple yet effective. The lurer will disguise themselves as a helpful ally, offer tempting rewards or assistance, and carefully construct a narrative to build trust and lower the victim's guard. Once the victim enters the Wilderness area, the illusion is shattered, and the predator reveals their true intent - to ambush the target and strip them of their possessions, leaving them with nothing.
This ancient strategy, rooted in psychological manipulation and opportunism, aptly demonstrates how social dynamics and trust can be weaponized in a zero-sum environment to extract value from others. It serves as a stark warning: promises of safety or guaranteed returns often conceal an asymmetric setup, designed to benefit the initiator at the expense of the participants.
Market Conditions
Fragmented Liquidity and Fleeting Narratives
Proliferation of projects and blockchains: The Altcoin ecosystem is rapidly expanding, covering multiple blockchains, protocols, and tokens. This explosive growth has severely fragmented the attention of traders, with a constant influx of new projects and "hot narratives" competing for capital inflows. Each project and narrative tries to capture a share in the limited market, but this competition has resulted in a fragmented overall market.
High-speed liquidity rotation: Liquidity in the market is shifting from one "hot spot" to another at an unprecedented pace. Once a narrative loses its appeal, participants quickly abandon it to chase the next opportunity. This pattern leads to short-term price spikes and rapid declines, creating "fleeting rallies", with most traders unable to realize profits from them.
Key Takeaway: Due to the proliferation of projects and the frequent rotation of liquidity, no single narrative can sustain long-term price appreciation, and traders need to be more attentive to liquidity dynamics.
Overlapping Interests and Fragmented Market Sentiment
Incentive-driven opinion leaders: In the Altcoin market, key opinion leaders (KOLs) often promote projects based on their personal interests. They use social media to guide market sentiment and drive short-term hype around projects. This behavior leads to a lack of consistency in market narratives, further exacerbating the fragmentation of market sentiment.
Conflicting market signals: The current market sentiment is full of contradictions. On one hand, some macroeconomic indicators seem to suggest the arrival of a "bull market"; on the other hand, retail traders are generally experiencing losses, and the market sentiment appears to be extremely pessimistic. This inconsistency in signals increases market volatility and further confuses traders.
Key Takeaway: The market's interest-driven rhetoric and conflicting signals make the trading environment more complex, and traders need to be wary of seemingly "authoritative" opinions.
Bitcoin Trading and the Illusory Altcoin Season
Capturing the Bitcoin uptrend: In this market cycle, the most profitable traders have been concentrated in the early stages of the Bitcoin uptrend. They were able to time their positions more accurately and capture the upside earlier than retail traders. However, many retail investors have been disappointed by Bitcoin's "low return expectations" and have instead shifted their capital to Altcoins, hoping to achieve higher returns.
Retail traders' misjudgment: Retail traders often avoid Bitcoin, believing that its market capitalization is too high and its upside potential is limited. They try to find the "next Bitcoin" and invest in lower-market-cap Altcoins with perceived high potential. However, this strategy has largely failed, as the anticipated "Altcoin season" has not materialized as expected, leaving many in significant losses.
Key Takeaway: Professional traders have achieved substantial returns in the Bitcoin uptrend, while retail traders have missed out by attempting to bet on Altcoins.
Solana and Ethereum: Meme Tokens and Liquidity Traps
The Fleeting Meme Frenzy: Pump.fun has been a representative platform for the popularity of Meme tokens. These platforms have spawned a series of new tokens that rely on hype and viral propagation, lacking any real underlying value, yet attracting significant retail capital. This phenomenon is essentially a speculative cycle: early participants try to profit from the influx of subsequent capital, rather than based on the long-term development prospects of the projects.
An open Ponzi scheme? The survival of Meme tokens depends on sustained attention and continuously increasing liquidity. Market participants generally recognize their speculative nature - trying to get in at a lower price before others buy in at a higher price, creating a temporary price appreciation cycle.
Ethereum, the former Meme King: Ethereum led the market frenzy in the 2021 bull market cycle, thanks to NFTs, and again in early 2024, achieving significant gains relative to Bitcoin through tokens like $PEPE and $MOG, generating substantial profits for early participants.
However, as the market gradually transitioned to a sideways consolidation phase around the time of the Trump election, a significant amount of momentum has been lost. By mid-2024, easy profit opportunities have become scarce, and current Meme traders face two main challenges:
The rise of professional market participants: The Meme tokens now have market capitalizations in the billions of dollars, and traders are effectively competing with professional players and algorithmic market makers who dominate the liquidity.
High entry valuations: Meme tokens are generally overvalued, making it difficult to replicate the exponential price increases seen in the past.
Key Takeaway: Both the Solana and Ethereum ecosystems have been inundated with a large number of micro-cap tokens, further diluting liquidity. The easy profit-making stages have passed, and the market is now dominated by a more risk-laden environment led by professional traders.
Hyperliquid and the Pursuit of Outsized Returns
Airdrop Bonanza: Hyperliquid, with its generous airdrop programs and innovative product offerings, has attracted a large number of active traders and liquidity. However, the influx of capital has also fueled reckless speculative behavior.
Trader Losses: According to platform data (such as profit and loss charts), the majority of users who engage in short-term trading on Hyperliquid are losing money, especially when chasing hot trends. Although the platform has growth potential, the frequent rotation between meme coins and other high-risk assets has significantly increased the probability of losses.
Key Takeaway: Even on innovative platforms, the zero-sum nature of aggressive speculation still exists. Traders who frequently switch between different tokens in search of outsized returns often see those gains quickly evaporate when faced with professional competition.
All-Out PVP: Insiders, Institutions, and VCs
Uneven Information Advantage: Insiders and institutional investors often have the ability to position themselves in advance, as they have access to information that is not available to ordinary investors. By the time retail traders follow the price trends and market narratives, they have often missed the largest profit opportunities.
The pace of listing and market impact: "Listing effect" - the phenomenon of a token surging in price after being listed on mainstream exchanges, further exacerbating the advantage of insiders. Informed parties can accumulate positions in advance, while latecomers can only buy at high prices.
Key Conclusion: The cryptocurrency market is essentially a high-risk "player-versus-player" (PVP) game. Large-scale players use information asymmetry and pre-positioning advantages to maximize profits at the expense of information-disadvantaged groups.
Excessive expansion of Altcoins and the Trump token incident
Dual token bloodsucking liquidity: The Trump and Melania tokens perfectly illustrate how new tokens can drain the last of the liquidity from an already fatigued market. This phenomenon is like a huge "liquidity black hole" that consumes the remaining funds in the market.
Retail investors become the final bag holders: As with most frenzy-driven token launches, insiders reaped most of the profits, while late-arriving retail traders were left deep in losses, further exacerbating the market's pessimistic sentiment and crisis of confidence.
Key Conclusion: The depletion of market liquidity and the continuous issuance of new tokens have exacerbated the losses of ordinary participants, leading to a market dilemma of "no one to hold the bag".
Where will the market go from here?
Rebound potential analysis: Although the Altcoin market outlook is bleak, Bitcoin's continued institutional adoption still keeps the market optimistic. At the $105,000 level, Bitcoin maintains a strong upward trend. Positive news from governments or major regulators could reignite the overall bullish sentiment.
Remain vigilant about future market trends: Even if liquidity returns and the market frenzy reappears, participants still need to remain highly alert. The market is still dominated by professional trading institutions and insiders, with an exceptionally fierce competitive environment.
Shorten trading cycles: In a fully competitive PVP market, in-and-out trading is often safer than relying on long-term trends. The carefree era of simply buying and holding meme coins for profits (such as previous cycles or early 2024) seems to have temporarily ended.
Key Conclusion: If macroeconomic conditions are favorable and new participants enter the market, the market may regain a positive atmosphere, but caution remains paramount. Traders should recognize the PVP nature of the current market and avoid excessive investment in temporary market narratives.
Deep in the mountains and forests - Proceed with caution
Final Thoughts
The persistent theme in today's crypto ecosystem is the decentralization of capital and attention. This dynamic characteristic, combined with the strong influence of insiders and the rapidly changing market narratives, puts ordinary retail investors at a disadvantage. Although there is still the possibility of a significant upswing in a Bitcoin-favorable macroeconomic environment, market participants must approach any rally with strategic and risk-controlled thinking.
Practical Suggestions:
Set realistic expectations - the era of easily achieving 10x returns may have temporarily passed.
Diversify investments wisely - do not over-allocate funds to multiple speculative tokens.
Maintain flexibility - shortening holding periods and actively taking profits can help navigate the PVP environment.
Pursue quality - focus on projects with real value and strong fundamentals, rather than simply chasing hype.
Ultimately, the "everyone wins" era may have ended - the market game has become more ruthless, and information asymmetry does exist. But as long as one maintains a high degree of vigilance and is adept at discovering genuine opportunities, savvy market participants can still achieve profitability in this "wilderness".
