Crypto Market Outlook: The Integration of AI and Blockchain May Become the Next Trend

Recently, I've had more time to think, and I would like to share some views on the market.

The overall trend of the crypto market may not become clear until after September. Considering macroeconomic resistance, summer liquidity constraints, and quarterly position adjustments, the real market dynamics will only emerge after participants return from the August holidays. Recent market activities show that the rise of most altcoins is mainly driven by short squeezes. Traders are chasing the rally influenced by previous rebounds, but there is a lack of long-term holders. Most have already suffered significant losses previously. As expected, most tokens that experience a surge subsequently undergo a decline of equal magnitude.

Ethereum unexpectedly rebounded, with the previously hardest-hit sectors such as AI and meme coins leading the way. On the other hand, tokens with practical use, strong fundamentals, or buyback mechanisms showed resilience, experiencing smaller declines and faster recoveries. From this, several observations can be summarized:

1. The demand for Bitcoin is real and persistent

Traditional capital is gradually entering through regulated channels such as ETFs. The nature of capital supporting BTC is completely different from previous cycles. Large-scale BTC liquidation is unlikely to occur unless triggered by macro events.

2. The differentiation of small cryptocurrencies intensifies

Funds will eventually flow back to small-cap tokens, but not comprehensively. Only tokens with clear purposes and real applications can attract these funds. This is why Ethereum may outperform other public chains. Clear regulation, increased DeFi usage, deflationary structure, and staking demand together create a powerful flywheel effect.

3. Tokens supported by venture capital face structural risks

The unlocking of tokens will continue to put pressure on prices. In the case of insufficient liquidity, the ongoing selling pressure from validators and early investors restricts the upside potential. Tokens in certain ecosystems, in particular, face persistent selling pressure due to their validator reward structure.

4. The advantages of Meme coins may have ended

Meme coins have structural advantages: no venture capital unlocks, fair distribution, entirely based on attention. This is a pure speculation mechanism, effective during the first round cycle. However, this stage seems to be nearing its end. Certain token generation events and the launch of trending coins may signal the peak of attention for meme coins. After that, interest begins to wane.

Only meme coins with strong stories and market recognition have real speculative value. Ironically, the fatigue with venture-backed tokens opens the door for fairly issued Web2/3 projects, which may become the next wave of wealth opportunities. To seize these opportunities, one needs to be active on the blockchain. When information asymmetry exists, big opportunities will always arise.

5. Future Market Trends

If meme coins are no longer the opportunity, what is the next hotspot?

My point of view: The combination of AI and cryptocurrency.

Just like during the DeFi summer, most early AI projects fail after the hype. However, truly practical projects are quietly building during the bear market. We have seen some projects emerge on the Blockchain.

As meme coin profits dry up, attention will naturally shift to new narratives. AI, with its clear practicality, is very suitable to become the next focus.

Many AI x Crypto projects adopt fair issuance, echoing the narrative of early success stories.

This is why I have recently focused on researching and laying out plans in this field. There is no need to rush into building positions now, but I believe that if the market shows strong upward trends again, this field will hold the greatest asymmetric opportunities.