Author: @arndxt_xo Compiler: Plain Language Blockchain
The market is doing what it does best: testing your beliefs.
Altcoins continue to fall against BTC, and BTC dominance is close to the cycle high. Market sentiment is split, with some people watching from the sidelines and others aggressively going long on low-market-cap coins.
This is not a signal to call for "altcoin season" tomorrow, don't FOMO.
1. Yes, we are still in a bull market, but you are not late
Bitcoin is still the protagonist. From ETF capital inflows to corporate capital allocation (GameStop, Trump Media, Strive), institutional confidence in BTC keeps its engine hot.
This is also one of the reasons for the weak performance of altcoins-BTC has absorbed most of the liquidity. Until this trend cools down, ETH and large-cap coins will not take off, let alone low-cap coins.
The alt season will begin when BTC dominance falls significantly, not now when it is still consolidating at the cycle high.
2. Cycles are important, but market structure is equally critical
Indeed, the crypto market roughly follows a four-year cycle, driven by the BTC halving, liquidity conditions, and technology adoption cycles. From a big picture perspective, 2025 looks like the second half, when parabolic movements usually emerge.
But this is also a period of frequent false signals. In 2021, altcoins soared after ETH surpassed BTC. Now? ETH/BTC is still weak. If you rushed into low-cap coins before ETH flipped, you came too early and the risk exposure was too large.
The smarter approach is to hoard strong assets. Track large-cap coins that show real accumulation (e.g. $AAVE, $UNI, $LINK).
3. Short-term opportunities are better, but not yet confirmed
Traders are right to focus on key areas. Breakouts above range highs could ignite high-beta alts, but position management requires discipline:
Use BTC as a trigger, not a trade.
Accumulate spot on trending alts like $HYPE, $AAVE, $CRV, low risk.
Focus on ETH/BTC. Without ETH strength, there is no real alt season, point.
4. No, you won’t get 200x rich overnight
True asymmetric returns come from early positioning and heavy positions in narratives that really attract attention:
On-chain perpetual contracts (Hyperliquid, Virtual)
ETH LRT protocols with real cash flow
DeFi projects that conduct actual buybacks (AAVE)
Chain native winners (Base, Solana, BNB - not micro-cap coins yet)
The launch order of the alt season:
BTC hits new all-time high (completed).
ETH breaks out (pending).
Large-cap coins rise (some signs).
Mid-cap coins follow suit.
Low-cap coins take off vertically.
We are currently between phases 1 and 2.
Be patient and add to your positions on pullbacks.
Narrative Overview
Bitcoin hits a new all-time high, but the crypto community (CT) still feels inexplicably exhausted. There is a reason for the split in sentiment: for retail investors, almost all important charts are altcoin charts, and these charts have been range-bound in recent months. Coupled with the upcoming summer, traders are accustomed to thin order books and sudden rug-pull, and market sentiment seems nervous.
Treasury-style gold mining boom
We seem to have returned to 2020. In the past week, GameStop, SharpLink, Strive, Blockchain Group, and even Trump Media have collectively reserved more than $3 billion for direct purchases of Bitcoin. The logic is simple: in a world where cash is actually worth 5% less and long-term bonds are barely keeping up with inflation, Bitcoin is the only mainstream liquid asset that has outperformed inflation over the past five years.
This migration of balance sheet capital has two major effects:
It absorbs spot supply, just like ETF inflows earlier this year, making each additional satoshi harder to acquire.
It provides a risk benchmark for fund managers: "If a retailer known for meme stocks has invested 5% in BTC, why can't we?"
This buying is expected to turn a cyclical rebound into a more structural and sustained rise. Ironically, the better Bitcoin performs, the more alt season may be delayed; dominance shows early signs of peaking, but it’s CFOs, not short-term speculators, who are holding positions.
The War for Capital Efficiency: AMMs Eat Money Markets
While treasurers hoard BTC, DeFi architects flattened the boundaries between trading, collateral, and fixed income in May. Euler incorporates Uniswap v4 hooks into its lending engine, and LPTokens automatically become lending collateral—instant liquidity without idle TVL. Hyperdrive lets Hyperliquid traders leverage idle perpetual contract assets with USDe or USDT0 as collateral, while Malda’s ZK-driven “any-to-borrow” layer turns bridging into a user experience detail.
The underlying logic is that any asset in a smart contract should work double duty: once for exposure, once for yield. For the protocol, this enhances user stickiness; for professionals pursuing basis trading, this compresses the spread and lowers the risk curve for real-world assets.
Liquidity Migration: The Quiet Rise of Layer-2
Hyperliquid's TVL soars every week, Base's trading volume quietly rides on the Virtual ecosystem, and BNB chain's DEX data surges, although in the Polyhedra case, the "surge" is mainly robots washing transactions for ZK points.
Ethereum still accounts for the main capital flow, but look at the direction of these flows: AAVE, UNI, LINK, PEPE.
Weiliang
