Metrics Ventures January Market Observation Guide for the Crypto Market
1/ The market's peak came to an expected halt, and the profit effect within CEX has once again returned to silence. Most of the non-disputed rising assets we mentioned have returned to their starting points. With no substantial improvement in US dollar liquidity, large-scale altcoins remain out of reach.
2/ The adjustments of MSTR and BTC during the month have been very healthy. The low volatility characteristic of the new cycle Bitcoin we mentioned in previous reports is undoubtedly evident. Even with the negative news from Silk Road today, Bitcoin's supply remains insignificant. The duration of this cycle may exceed the pessimistic expectations of some analysts in the current market.
3/ The on-chain enthusiasm continues to spill over into CEX funds as always, but there is nothing new under the sun. The absence of profit effects within CEX will inevitably affect the duration of this DEX market. As of the publication of this article, we believe that the overall speculation of DEX assets has entered a potential exit period.
Review and Commentary on Overall Market Trends
After we pointed out short-term risks last month, the market quickly welcomed a short-term correction and risk release. During this period, the maximum drawdowns for MSTR and BTC were 47% and 15%, respectively. Both from a proportional perspective and from the emotional release during the decline, this has been very healthy and has not affected the flywheel model and upward trend of both. The non-disputed rising assets mentioned earlier also quickly experienced a general maximum correction of 40%-60% within 48 hours in mid-December, which aligns with our expectations.
During the month, the on-chain AI sector, as the main area receiving funds after the MEME silence, also welcomed a large amount of active trading funds fleeing from CEX. We clearly observed a seesaw effect between on-site altcoins and on-chain trends. However, we did not see significant gameplay or technological innovation; the industry continues to follow the traditional funding path of thematic speculation. With the liquidity environment remaining unchanged, we expect the market cap ceiling on-chain to fluctuate similarly to last year's Q2-Q3, and thus we believe that many assets have entered a potential exit period.
At the same time, as of today, we can make some basic common-sense judgments about 2025:
① The existing low-volatility rise of the US dollar asset system is unsustainable, and the volatility of US dollar assets will significantly increase in 2025;
② The US dollar system still does not have substantial collapse risks, but the marginal performance pressure supporting the NASDAQ will increase exponentially;
③ 2025 will still be a very friendly year for crypto assets. We need to closely observe not the macroeconomic factors, but the political direction, and we should pay attention to what Trump says, rather than trading rumors.
Finally, I wish everyone a happy Lunar New Year in advance. Thank you for your continued companionship, and I hope we can continue our journey in 2025. We also welcome more exchanges with industry peers and investor friends.
About Us
Metrics Ventures, also known as MVC, is a data and research-driven secondary market liquidity fund led by a team of experienced crypto professionals. The team has expertise in primary market incubation and secondary market trading, playing an active role in industry development through in-depth on-chain/off-chain data analysis. MVC collaborates with influential figures in the crypto community to provide long-term empowerment support for projects, such as media and KOL resources, ecological collaboration resources, project strategies, and economic model consulting capabilities.
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