Why does the cryptocurrency market keep falling nonstop?

#打榜优质内容 The world is rising, but encryption is falling. What is the problem?
In short: liquidity. But it's not a lack of liquidity, it's a flow issue.

Global liquidity is clearly expanding. Central banks are intervening in relatively strong rather than weak positions, a situation that has only occurred a few times in the past, usually followed by a strong warming mechanism of risk appetite. The problem is that the new liquidity has not flooded into the encryption market as it has in the past.

The supply of stablecoins continues to gradually rise (increasing by 50% since the beginning of the year, an increase of $100 billion), but since the summer, inflows into Bitcoin ETFs have stagnated, with assets under management hovering around $150 billion. The once-booming encryption treasury DAT has fallen silent, and the trading volume of related concept stocks listed on exchanges like Nasdaq has significantly shrunk. Among the three major capital engines that drove the market in the first half of this year, only stablecoins are still functioning. ETF funds have peaked, DAT activities have dried up, and although overall liquidity remains ample, the share flowing into the encryption market has clearly shrunk.

In other words, the faucet of funds has not been turned off; it has simply flowed elsewhere. The novelty of ETFs has already faded, the allocation ratio has returned to normal, and retail funds have also flowed to other areas, now chasing the market trends of stocks, artificial intelligence, and prediction markets.

The stock market performance proves that the market environment remains strong, and liquidity has just not yet transmitted to the encryption market. Although the market is still digesting the 1011 liquidation, the overall structure is robust—with leverage cleared, volatility controlled, and a favorable macro environment supporting it. Bitcoin continues to serve as a market anchor due to stable ETF inflows and a tightening supply on exchanges, while Ethereum and some L1 and L2 tokens have begun to show relative strengthening signs.

Despite the increasing voices on cryptocurrency social media attributing the weak prices to the four-year cycle theory, this concept is no longer applicable. In mature markets, the miner supply and halving mechanism that once drove cycles have long since become ineffective, and the core factor that truly determines price performance today is liquidity. The macro environment still provides strong support – the interest rate cut cycle has begun, quantitative tightening has ended, and the stock market frequently explores new highs, yet the cryptocurrency market has lagged behind, with the root cause being that liquidity has not effectively flowed in. Compared to the three major capital inflow engines that fueled last year and the first half of this year (ETFs, stablecoins, and DeFi yield-generating assets), only stablecoins currently show a healthy trend.

Close monitoring of ETF capital inflows and DAT activities will become key indicators, as these two are likely to be the earliest signals of liquidity returning to the encryption market.