Crypto’s “rising tide lifts all boats” mantra has broken, according to a prominent analyst, who argues that liquidity has become too scarce in the industry.
Major Shifts Reshaping Market
Analyst Crypto Cred explained on May 26 that the crypto market has fundamentally changed, pointing to four major shifts reshaping the market:
- The explosion of new coins and near-zero barriers to launching tokens.
- Competition from AI, semiconductors, tech stocks, commodities and 0DTE options for speculative capital.
- Greater institutional and TradFi participation through ETFs and professional trading firms.
- Retail liquidity spreading across countless exchanges, meme coins and niche ecosystems instead of concentrating in a few major tokens.
According to Cred, earlier crypto cycles rewarded broad market exposure because strong momentum lifted nearly all assets during extended altseasons.
Santiment data shows crypto traders have turned increasingly bearish over the past 10 days, a sentiment pattern that has historically preceded price rebounds.
The firm noted that markets often move against crowd expectations, suggesting the growing pessimism could create conditions for a low-resistance upside move while retail traders remain cautious.
BTC Direction No Longer Enough
Cred added that even correctly calling Bitcoin’s (CRYPTO: BTC) direction is no longer enough if traders pick the wrong altcoins.
“In previous cycles if you got the conditions right but the assets wrong, you’d still make money but underperform,” Cred said. “In the current cycle, if you got conditions right but the assets wrong, you got shafted.”
He described the current environment as a “dispersion market,” where asset selection has become one of the biggest drivers of returns rather than a secondary factor.
Trader Decode agreed with the thesis, saying selective exposure to category leaders now appears safer than betting on heavily beaten-down projects hoping for a full recovery.
“Buying incredibly beaten down projects in the hope they absolutely moon is risky,” Decode said. “More likely they are just dead and not coming back.”
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