jakiro
During the Spring Festival in 2025, when most people welcomed the red envelope market with anticipation, the crypto market started with a collapse.On February 3, altcoins suffered the most tragic massacre in history, with the median decline of the top 100 currencies in market value being 44% in a single day, and even large-cap currencies such as Ethereum also fell by 34%.The collapse caused about 700,000 people to lose their positions, with the liquidation scale reaching US$10 billion, and the scale of liquidation and the number of people to lose their positions hit record highs.
However, it is worth noting that except for the news that Trump imposed tariffs on a small scale, there are almost no obvious negative factors in the market.Therefore, this round of flash crash is more like a long beheading action carefully planned by the main bears.
First of all, since 2018, the crypto market has ushered in the Spring Festival red envelope market for seven consecutive years, which has caused many investors to place heavy bets during the 2025 Spring Festival.Secondly, Ethereum’s pin insertion amplitude reached 15% in the last minute, and more than half of the liquidation volume was completed within this minute.Finally, driven by the continuous increase in the Trump family’s holdings and the positive expectations of Ethereum’s reserves, the market has formed a consensus on the rise of Ethereum, so that Ethereum triggered a situation of more kills and more during the decline.
Although this round of decline has caused a devastating blow to the bulls, it has effectively solved two major problems that have plagued the market for a long time: “high stock positions” and “strong expectations and weak reality”.After this round of decline, altcoin holdings fell by 54%, far exceeding the decline in the currency price.This means that a large number of investors actively or passively leave the market during the decline.In addition, the market value of altcoins fell from 9.8% on February 1 to 7.8% on February 3, setting a record low in the past three years.Therefore, under the stock pattern, this round of decline actually frees up liquidity and valuation space for the continuation of the structural market.
Since the Ethereum ETF was approved, ETH has been greatly adjusted with ETF funds outflows.However, in this round of decline since February 1, Ethereum ETF has experienced strong capital inflows against the trend, indicating that US stock funds chose to buy at the bottom in the process of an irrational decline in ETH.In addition, during the ETH period, the net outflow of crypto derivatives exchanges reached 300,000, the highest level since August 2023, which means the momentum of stock selling pressure has been greatly weakened.In general, the author believes that the decline of ETH on February 3 is mainly caused by overheating emotions and bargaining game.Without changes in fundamentals, ETH will continue to return to the valuation center of 3200-3500 after a brief rest.
In this round of market decline, the AI and MEME sectors became the hardest hit areas, with sector index declines reaching 66% and 63% respectively.Historical experience shows that after strong sectors encounter severe oversold in the short term, they will often take the lead in ushering in a technical rebound when the market stabilizes.For traders who are keen on bottom buying, betting on the oversold rebound of the AI and MEME sectors is undoubtedly a good choice.
However, compared with MEME, the rebound of the AI sector is more high and certain, and there are three main reasons: 1. AI is still one of the most certain investment main lines of the global capital market in 2025.In the past month, the “stock gods” on Capitol Hill have continued to buy AI company call options in large quantities.2. The attitude of the large-scale American technology ALL IN AI is unwavering. The seven AI giants plan to invest US$300 billion in the AI field in 2025, and the investment scale will reach 1.5 times that of 2024.3. With DeeSeek making a breakthrough, the AI field is launching a new round of cost reduction and efficiency improvement revolution, which is similar to the evolution of application public chains in the direction of low GAS costs and high scalability, and will ultimately promote the implementation of large-scale applications.Therefore, 2025 is likely to be the first year for AGI breakthrough and large-scale implementation of vertical applications.
In terms of the main line of AI market, investors can pay attention to the opportunities for oversold rebounds in the early stage such as AI16Z, VIRTUAL, SWARMS, etc.We can continue to pursue new hot spots in AI in the medium and long term.It should be noted that AI trading is an odds game, and you must not place heavy bets in any transaction.
