This article uses mainstream coin BTC and VC coin XPL (plasma) as examples, with concise content and fewer words for ease of reading.
1). Key knowledge points, the three factors that determine coin prices:
External liquidity
Coin prices are linked to the US dollar, and the speed of US dollar printing, interest rate hikes, and cuts will determine the extent of US dollar proliferation.
Internal liquidity
The coin forms a positive cycle of price increase, with strong bullish sentiment and ample internal liquidity. In a bear market, internal liquidity is scarce.
Consensus value
The bear market bottom for coin prices is continuously rising, and the consensus is getting stronger.
2). The market environment has led to a sharp decline in coin prices:
The United States is in a rate-cutting cycle, and current external liquidity is ample, but it is not flowing into cryptocurrencies.
Since the 1011 incident, market confidence has been continuously declining, leading to a gradual decrease in internal liquidity.
Precious metals are draining external liquidity, and the internal liquidity in the crypto space is scarce, causing the prices of cryptocurrencies led by BTC and XPL to continue to fall 📉
3). Where is the bottom for BTC?
Directly look at the monthly Bollinger Bands, with the lower band as the boundary, external liquidity is abundant to support, guessing around 50,000 to 60,000.
The bottom usually lasts for several months, providing enough time to buy the dip and build consensus.
Do not expect a significant rebound immediately before consensus is established; only after a rapid decline in a bull market will there be a quick rebound.
When cryptocurrency prices rise slowly, internal liquidity will gradually increase, combined with abundant external liquidity, thus forming the bull market of 2024-2025.
4). Where is the bottom for VC coins led by XPL?
XPL is the token of the public chain Plasma, and its value mainly depends on the popularity of the public chain and the size of TVL.
Currently, the TVL of Plasma is maintained at around 3.5 billion, but the market value is only 1 billion.
Compared to other ghost chains like Monad and Apt, it is simply too cheap, and I believe the bottom for XPL will come earlier than BTC.
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With the continued explosive growth of the stablecoin market, expected to reach 1 trillion in the next few years, the public chain Plasma is facing a huge opportunity:
1. Dedicated Optimization: Plasma is designed specifically for stablecoins like USDT, providing zero transaction fees, near-instant transfers, and high throughput (1000+ TPS), significantly reducing payment costs and promoting everyday, large-scale adoption.
2. Ecological Explosion: After launch, TVL, users, and trading volume rapidly grew a hundredfold, becoming the second largest market for Aave, attracting DeFi, payment, and RWA projects to settle in.
3. Institutions and Emerging Markets: Combining Bitcoin's security, EVM compatibility, and compliance features to meet institutional needs; products like Plasma One target regions with strong financial inclusivity to achieve 'digital dollar' ubiquity.
4. Competitive Differentiation: With Tether's support, Plasma is reshaping the stablecoin value chain, becoming a core player in the next generation of global payment infrastructure.
The growth of stablecoins directly translates into a scale leap window for Plasma.
