Metrics Ventures Market Observation: Chaotic Consolidation Continues

marsbitPublished on 2025-12-28Last updated on 2025-12-28

Abstract

Metrics Ventures Market Observation: Continued Chaotic Consolidation As 2025 concludes, the crypto market has experienced a cold year, with crypto assets ranking at the bottom in USD-denominated annual returns, largely due to a Q4 downturn. The past month's market activity has been stagnant, characterized by a lack of vitality, shrinking volumes on both CEXs and the NYSE, and converging volatility. This period of narrow-range trading is nearing its end, with sudden "flash crashes" expected to be a recurring theme, making it a challenging environment for high-frequency traders. The report suggests this is a time for rest and systematic reflection rather than active trading. The recent market spotlight has shifted to precious metals, notably silver, rather than crypto. Silver futures volume on the Shanghai exchange alone has exceeded RMB 75 trillion monthly, with COMEX option open interest multiples of actual inventory, reminiscent of the 2020-2021 crypto frenzy. In contrast, Bitcoin's performance remains weak. The relative strength of gold versus Bitcoin has broken out of its long-term downward trend since the 2020 easing cycle, highlighting a significant capital rotation into metals. Despite the gloom, positive signals include MSTR maintaining its Nasdaq-100 index status, clearer guidance from the Fed Chair, and potential risks in the AI bubble that could benefit crypto in 2026. The current market is viewed as a continuation of the consolidation that began in late 2024, wi...

Author: Metrics Ventures

Metrics Ventures December Market Observation Guide

1/ As 2025 is almost settled, first and foremost, we wish all MVC friends a happy holidays! Looking back, 2025 has been a cold year for crypto investments, with crypto assets ranking at the bottom in terms of annual returns in the dollar market, which is mainly due to the Q4 collapse. At the year's end, we hope everyone can take advantage of the dull market to rest more and recharge for the coming year.

2/ The market over the past month actually hasn't been particularly noteworthy for analysis. The market is in a lifeless, chaotic state, with trading volumes continuously shrinking on both CEXs and the NYSE, volatility sharply converging, and the exchange of chips within the current narrow range approaching its end. What makes high-frequency traders even more uncomfortable is that this contraction shows no sign of a near-term turning point. So-called "painting the door" and "flash crashes" are expected to be the main themes in the near future. This period might be more suitable for resting and organizing thoughts, engaging in more systematic thinking about the market.

Overview and Commentary on Overall Market Conditions and Trends

Compared to the crypto market, the recent protagonist in the capital markets has been precious metals. The Q4行情 (market trend/action) anticipated within the circle did happen, but it was usurped by silver—the monthly trading volume of silver on the Shanghai Silver Exchange alone has now exceeded 7,500 billion RMB, and the open interest in options on COMEX is several times the actual market inventory. This frenzy is reminiscent of the crypto market in 2020-2021, and in contrast, Bitcoin's lethargic state is lamentable. Specifically, since October, the relative price strength of gold versus Bitcoin has also broken through the long-term downward trend channel since the 2020 easing, making this high-level capital rotation even more直观 (intuitive/visually clear).

Chart: Gold to Bitcoin Price Exchange Rate Pair

Of course, there are still some positive signals in the market. MSTR retaining its NASDAQ100 index status, the clearer direction indicated by the Fed Chair, and the potential crisis of the AI bubble all provide support for the 2026 market outlook. Standing at the end of 2025, we still believe this is a continuation of the year-long consolidation that began at the end of 2024. In the midst of price fluctuations with wide ranges, there will always be times of ebb and flow. Now is the time to conserve energy and build up strength.

This month's report is relatively brief, which also aligns more with our theme that it's a suitable time for rest. Once again, we wish everyone a happy holidays! See you in 2026!

Unlocking $100 Million in Liquidity? Pump.fun's New Policy Tests the 5-Minute Pump Technique

Pump.fun, a popular meme coin launchpad, has introduced a new standard mechanism called BOOST. It aims to address a significant capital efficiency issue: when a newly launched token graduates from its initial bonding curve to a liquidity pool (LP), roughly 20% of its liquidity becomes permanently locked as "dead liquidity," estimated to waste over $100 million annually. Instead of locking these funds permanently, BOOST repurposes them. Upon a token's migration, approximately 20% of the settlement funds (e.g., 17.6 SOL or ~$2516 USDC) are used to buy back the token on the open market over a 5-minute period via a Time-Weighted Average Price (TWAP) mechanism. All purchased tokens are immediately burned. This creates a brief, systematic buy pressure immediately after migration, potentially generating a short-term price surge ("pump") while permanently reducing the token's circulating supply. The goal is to enhance the immediate post-launch trading experience, potentially increasing trader retention and sustainable protocol revenue, which funds ongoing token buybacks. However, concerns exist that this artificial 5-minute boost could lower the barrier for launching low-quality tokens and lead to steeper price crashes once the buy pressure stops, if followed by large sell-offs. The feature automatically applies to tokens migrating after July 21, 2024, but not to previously migrated tokens or those launched via the Mayhem AI Agent lab.

marsbit9m ago

Unlocking $100 Million in Liquidity? Pump.fun's New Policy Tests the 5-Minute Pump Technique

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Selling Block Space is Dead: Public Chains Must Find a New Way

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marsbit29m ago

Selling Block Space is Dead: Public Chains Must Find a New Way

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Podcast Notes | Conversation with GSR Asset Management Head: To Determine if This Crypto Rally is Real, Just Watch the Lending Rates on Aave

Podcast Summary: Dialogue with GSR's Head of Asset Management: To Determine if This Crypto Rally is Real, Just Check Lending Rates on Aave Andy Baehr, Managing Director of Asset Management at GSR, discusses the current crypto market, characterizing it as stuck in a state of "ambivalence" with short-lived, unsustainable rallies. He outlines a simple framework: the market moves between "ambivalence" and "conviction" (sustained upward momentum). Currently, every rally resembles a single-stage rocket booster that quickly fizzles out. Baehr identifies three key signals to watch: 1) DeFi lending rates, 2) the potential passage of the CLARITY Act, and 3) the market forming a consensus on the "Fed hawkish peak." He emphasizes that the most immediate indicator for the sustainability of the recent CPI-triggered rally is the USDC borrowing rate on Aave, currently around 3.75%—close to U.S. Treasury yields. The absence of a credit spread indicates low leverage demand and a lack of market energy. He explains that a healthy, sustained rally requires layered buying pressure. Last year's rally progressed from an ETH short squeeze to crypto-native trader influx and finally to ETF inflows. Currently, this structure is missing. Other potential structural buyers like Digital Asset Treasury (DAT) companies are absent, and ETF flows have proven transient. Baehr notes that while small-cap crypto tokens outperformed large caps in Q2—a potential sign of capitation in major assets—capital is also flowing to more exciting opportunities like AI stocks and tech IPOs, leaving crypto sidelined. Regarding DeFi, he highlights that platforms like Aave provide a clear, real-time signal of leverage demand through their supply/demand-driven interest rates. A significant, sustained rate increase would signal genuine market conviction. He also observes the quiet emergence of fixed-income-like products and vaults in DeFi. On regulation, the probability of the CLARITY Act passing before the August 7th deadline has dropped linearly from 75% to below 40% on Polymarket. Baehr suggests its passage would be treated as a bullish surprise, a potent driver for price movement. However, political hurdles, including ethical clause debates and disclosures about the First Family's crypto profits, remain significant obstacles. Ultimately, the market awaits clarity on the Fed's terminal rate under Chair Warsh. Until the "Fed Solstice"—the point where the market collectively understands the peak of hawkish policy—sustained conviction will be difficult to achieve.

marsbit40m ago

Podcast Notes | Conversation with GSR Asset Management Head: To Determine if This Crypto Rally is Real, Just Watch the Lending Rates on Aave

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Hyperliquid’s HIP-4 proposal fuels HYPE staking as long-term conviction grows

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ambcrypto1h ago

Hyperliquid’s HIP-4 proposal fuels HYPE staking as long-term conviction grows