Survival Guide for the Current Crypto Market: Why Is Everyone Losing Money?
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Survival Guide for the Current Crypto Market: Why Is Everyone Losing Money?
Overall, the era of "everyone can make money" has already come to an end.
Navigating Web3 tides with focused insightsAuthor: RVM
Translation: TechFlow
In the virtual world of RuneScape, the Wilderness was once a region filled with danger and opportunity, and one of its most notorious tactics was known as "luring." This strategy exploited players' trust and greed by offering false promises of safety or generous rewards to entice unsuspecting victims deep into the Wilderness—an area designated for high-risk player-versus-player (PVP) combat.
Specifically, lurers would disguise themselves as friendly allies, offering seemingly generous help or rewards, carefully crafting scenarios to lower their targets’ guard. Once the victim entered the Wilderness, this facade would be dropped—the lurer would reveal their true intentions, launch an ambush, loot the victim’s items, and leave them with nothing.
This tactic made full use of psychological manipulation and human vulnerabilities, serving as a classic example of how social dynamics in early virtual environments were “weaponized.” It reminds us that so-called safe bets or guaranteed returns often conceal asymmetric traps—benefiting only those who set them up, while participants bear the losses.
Market Overview
Deep in the Wilderness I @Darkfarms1
Fragmented Liquidity and Fleeting Narratives
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Overabundance of Projects and Blockchains
As the crypto market expands, more blockchains, protocols, and tokens emerge, fragmenting traders’ attention. New projects appear constantly, each attempting to attract capital through hot narratives.
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Rapid Liquidity Rotation
Market capital flows extremely quickly from one “hot” narrative to another. Once a story loses momentum, investors swiftly move on to new opportunities. This leads to sharp price spikes followed by rapid declines, leaving many traders trapped before they can exit profitably.
Key Takeaway: With too many competing projects and limited capital, no single narrative can sustain a long-term upward trend.
Overlapping Interests and Divided Market Sentiment
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KOLs Driven by Incentives
KOLs often promote projects based on personal interest. Discussions on social media are largely dominated by those trying to pump their own positions, further fragmenting market narratives.
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Contradictory Market Signals
Market sentiment is split: while certain macro indicators suggest improving conditions, retail investors remain broadly underwater, resulting in deeply negative sentiment. This contradiction amplifies market volatility.
Key Takeaway: Due to conflicting incentives, the market has become increasingly fragmented—even previously trusted voices may abruptly shift from bullish to bearish (or vice versa) depending on their holdings.
Bitcoin Dominance and the Illusion of an Altseason
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Early Bitcoin Positioning
In this current crypto cycle, traders who correctly anticipated Bitcoin’s rise have reaped substantial rewards. Meanwhile, many retail investors expecting an altseason were caught off guard and missed out.
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Retail Pursuit of High Returns
Given Bitcoin’s large market cap and relatively limited upside potential, retail investors often avoid it in favor of chasing the “next big thing.” However, many have poured funds into small-cap altcoins only to find that the anticipated altseason never truly materialized.
Key Takeaway: The surge in Bitcoin primarily benefited experienced traders, while retail investors seeking explosive gains via altcoins have been left disappointed by the absence of a real altseason.
The Meme War Between Solana and Ethereum: The Liquidity Dilution Problem
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Meme Mania: The Rise of Pump.fun
Platforms like Pump.fun have spawned countless memes, capturing the attention of retail investors. These tokens gain popularity primarily through hype and viral social media trends, rather than any fundamental value.
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The Nature of Memes: Speculation or Scam?
Meme price increases typically depend on sustained market attention and continuous liquidity inflows. Many investors understand this is a game of who can buy fastest, creating short-lived price bubbles.
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Ethereum: Former King of Memes
During the 2021 bull run, Ethereum became the main battleground for memes thanks to the NFT craze. In early 2024, memes like $PEPE and $MOG significantly outperformed Bitcoin, delivering strong returns to early adopters. However, as the market stagnated ahead of the Trump election, much of that momentum dissipated. By mid-2024, “easy money” opportunities had largely vanished. Today’s meme traders now face the following challenges:
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Entry of Professional Players—The meme market, now worth billions, is dominated by experienced traders and algorithmic market makers, drastically reducing profit margins for average investors.
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Pressure from High Valuations—Most meme tokens are already highly valued, making significant future price surges unlikely.
Key Takeaway: Whether on Solana or Ethereum, markets are flooded with micro-cap tokens competing for limited capital, further diluting liquidity. The early days of “free money” are over. Today’s environment is far more complex and controlled by professional traders.
Hyperliquid and the Chase for Excessive Returns
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Airdrops and Speculative Frenzy
Hyperliquid attracted a flood of active traders and capital due to its generous airdrop policy and innovative product features. However, the influx of capital also fueled high-risk speculative behavior, increasing market volatility.
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Most Traders Are Losing Money
According to platform PnL (profit and loss) data, most short-term traders on Hyperliquid fail to make profits, especially when chasing hyped-up moves. Despite the platform offering numerous opportunities, frequent trading in memes or high-risk assets often increases the likelihood of losses.
Key Takeaway: Even on innovative platforms, aggressive speculation remains a zero-sum game—one side’s gain is another’s loss. Traders frequently switch between tokens chasing high returns, but these gains often vanish quickly under pressure from professional players.
PVP Battles: Retail vs. Big Players
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Information Asymmetry Disadvantage
Insiders and institutional investors often get early access and possess information unavailable to the public. Retail investors usually enter only after prices have already surged, missing optimal entry points.
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"Listing Effect" and Market Manipulation
The so-called “listing effect”—where a token's price spikes after being announced for listing on a major exchange—further benefits insiders. They can accumulate cheaply before the news breaks, while retail investors buy in at inflated prices.
Key Takeaway: The crypto market is fundamentally a high-risk player-versus-player (PVP) arena. Large players profit using information asymmetry and early positioning, while ordinary investors often end up as casualties.
Altcoin Expansion and the Impact of Trump Tokens
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Liquidity Diverted by New Tokens
The launch of Trump and Melania tokens vividly illustrates how new tokens can siphon remaining liquidity from an already weakened market.
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Retail Investors Become Bagholders
Like many market-driven token launches, insiders captured most of the gains during the initial frenzy, while late-arriving retail investors got stuck holding devalued assets. This phenomenon further deepens market pessimism, causing many to lose faith.
Key Takeaway: As market liquidity dries up and new tokens continue launching endlessly, retail losses are magnified, trapping the market in a negative cycle where “no one wants to buy.”
Future Market Outlook
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Potential for Recovery
Although the altcoin market currently looks bleak, Bitcoin’s institutional adoption still offers hope. At its current level of $105,000, $BTC maintains a strong upward trajectory. If governments or major regulators send clearer pro-crypto signals, it could reignite bullish sentiment across the market.
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Cautious Approach to Future Moves
If liquidity improves and market enthusiasm returns, investors must remain highly vigilant. The current market remains dominated by professional teams and insiders, making competition fierce and placing retail investors at a disadvantage.
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Short-Term Trading Is Safer
In a fully PVP-driven market, quick in-and-out strategies are safer than relying on long-term trends. The days of easily profiting by simply buying and holding memes (as seen in early 2024) are over—at least under current market conditions.
Key Takeaway: If macro conditions improve and attract fresh capital, the market may regain positive momentum. However, investors must proceed cautiously, fully recognizing the PVP nature of today’s market and avoiding blind pursuit of short-term hype.
Deep Wilderness - Caution Is Crucial
Final Thoughts
A defining feature of today’s cryptocurrency market is the extreme fragmentation of capital and attention. Combined with the dominant influence of insiders and rapidly shifting market narratives, this environment makes it harder than ever for retail investors to gain an edge. While significant volatility—and opportunity—may still arise, particularly if macroeconomic conditions favor Bitcoin, investors must approach any market rebound with strategic discipline and rigorous risk management, avoiding blind herd behavior.
Practical Advice:
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Set Realistic Expectations—The era of easily making 10x returns may be over.
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Diversify Carefully—Avoid spreading funds too thin across multiple trending tokens, which complicates risk management.
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Stay Agile—Shorten holding periods and lock in profits promptly to survive in this fiercely competitive PVP market.
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Focus on Quality Projects—Prioritize projects with real utility or solid fundamentals over blindly chasing market hype.
In summary, the era where “everyone could profit” is gone. Today’s market is harsher, with informational advantages concentrated in the hands of a few. Yet, with disciplined caution and the ability to identify genuine opportunities, savvy investors can still find profitable niches within this complex landscape.
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