Space Review | Emotions bottoming out, liquidity tightening, how to judge the "real bottom signal"?

The current crypto market is experiencing a lack of buying pressure due to low sentiment, and the tightening liquidity is causing asset prices to continuously test psychological barriers, while mainstream narratives that have worked in the past are no longer effective. At such times, every market participant is haunted by a core question: where exactly is the bottom? More critically, how can we identify the signals that indicate a true turning point amidst the chaos and noise?

Against this backdrop, the new issue of SunFlash hosted by SunPump launched a deep discussion titled “Emotions at the Bottom, Liquidity Tightening, How to Judge the 'Real Bottom Signal'?” Unlike the “historical bottom” that can only be clearly defined after the fact, this event aims to return to the market itself. By analyzing market behavior, capital flows, on-chain data, and other dimensions, it seeks to reverse-engineer the “constituent elements of a bottom” and provide the audience with a calmer and more objective cognitive framework, allowing for greater insight in future market turning points.

Bottom signal analysis: The market is collectively “numb”, but the emotional low point is only a necessary condition.

When discussing the “freezing point of market sentiment,” several guests coincidentally corrected a common misconception: the true market freezing point is not always accompanied by intense panic and “bloodbath,” but is more often a state of extreme “numbness” and “indifference.”

The guest Niu Mo Wang first pointed out that, unlike the complaints and disputes that existed in the market at the beginning of October, the current market has entered a state of “麻了.” He believes that when investors lose feedback on market fluctuations, no longer care about rises and falls, and even feel that it is “whatever” whether to trade or not, it is a true reflection of emotional bottoming. This state indicates that the selling pressure in the market has basically been released, leaving mostly long-term investment or “holding on tight and not selling” firm chips, providing soil for the construction of a bottom. However, he also cautiously stated that the emotional freezing point is just a key signal, and a real reversal still needs to wait for liquidity improvement and new market narratives to reignite enthusiasm.

Guest Yuna provided evidence of the existence of the ice point from a data perspective. She pointed out that the BTC spot depth is thinner than in July, with a sharp reduction in order density, and the market exhibits typical characteristics of “low volume cooling.” She clearly stated that the emotional ice point is a “necessary condition” for the formation of the bottom, but not a “sufficient condition.” She categorized the emotional ice point into two scenarios: one is the “silence before accelerated decline,” where the market is fragile and can collapse at any moment; the other is the true “silence during bottom formation,” characterized by converging volatility and sluggish trading volume. Considering the current situation of continuous contraction of on-chain funds and low community activity, she judges that the market is more inclined towards the second state, but ultimately confirms that determining the bottom requires a comprehensive judgment from three dimensions: emotion, funds, and structure.

Mr. Potato proposed a multidimensional judgment framework from the perspective of behavioral finance: quantitative indicators (such as rise and fall ratio, board explosion rate), behavioral characteristics (investors shifting from fear to indifference, trading activity dropping to below 20% of historical average), and cycle positioning. He emphasized that the emotional freezing point is often an “opportunity for contrarian trading,” but one must be wary of its evolution into a “continuation of decline.” A true bottom must meet the triple validation of emotional freezing point, improvement in liquidity, and a halt in price decline.

Liquidity inflection point: stablecoins, order book structure, and leading signals of on-chain funds

When discussing “During the period of liquidity tightening, which indicators can best reflect the turning point in advance?” the insights from the guests were highly consistent: price is a lagging indicator, and the real leading signals are hidden in the behavior of funds, among which stablecoins are recognized as the most important “barometer.”

Yuna pointed out that the halt in the decline of the total market capitalization of USDT and USDC, and even the slight inflow, is the earliest signal that off-market funds are preparing to enter. She reviewed history, noting that whether it was the rebound after 2020 or other cycles, “stablecoins halt their decline first, and then prices follow” is an almost unchanging rule. In discussing stablecoins as a core liquidity vehicle, the TRON network, with its TRC20-USDT, occupies more than half of the total USDT supply in the entire network, combined with its high frequency of on-chain activities, transfer speed, and transaction fee advantages, making it an excellent window for observing liquidity flows. The changes in the market capitalization of stablecoins within its network and the direction of liquidity are a crucial part of assessing the turning point of liquidity in the entire market.

Apart from stablecoins, Yuna also considers on-chain capital behavior as a key indicator. She pointed out that when capital gradually shifts from panic selling to slow accumulation, it releases a direct bullish signal. Another important observation dimension is the order structure on exchanges. She emphasized that the true market bottom is often reflected in the “orders” rather than the “prices”: when selling pressure significantly weakens, and although buying pressure has not returned on a large scale, deep buy orders have begun to thicken, it indicates that the market has entered a “selling resistance” state, at which point capital has been quietly building a bottom.

She concluded that when stablecoins stop falling, selling pressure from exchanges is exhausted, and on-chain funds begin to accumulate simultaneously, even if the price is still consolidating, the real bottom of the market is being formed.

In this in-depth discussion about bottom signals, the repeatedly mentioned keywords by the guests were “stablecoins” and “on-chain activities”. Looking at the entire crypto ecosystem, the TRON network has undoubtedly become one of the core infrastructures for observing and even carrying this critical Liquidity. During the dark moments of the market, the resilience demonstrated by its network is particularly noteworthy. With its stable technical characteristics of high throughput, low transaction fees, and fast settlement, TRON has built an extremely efficient stablecoin transmission layer, accommodating a massive flow of stable assets like USDT.

At the same time, the TRON ecosystem is showcasing a remarkable trend of diversification, continuously improving its layout in innovative fields ranging from DeFi, AI infrastructure to Memes. This comprehensive ecological construction not only enhances the network's own resilience but also promotes the large-scale practical application of blockchain technology globally, accumulating indispensable foundational momentum for the next round of market recovery.

When the market discusses whether liquidity has bottomed out, observing the changes in the market capitalization of stablecoins on the TRON network, the on-chain inflow and outflow, as well as the daily transaction activity, can provide an extremely clear and low-noise observation dimension. The changes in its on-chain data often reflect the true movements of retail and institutional funds globally: whether it is panic selling or silent positioning in the background.

Therefore, identifying the market bottom requires not only attention to macro indicators and sentiment cycles but also insight into the “fundamental pulse” of core public chains like TRON. It is not just an ecological platform; it also serves as a mirror reflecting the tides of market liquidity. When liquidity truly begins to warm up, an efficient, active, and resilient underlying network will undoubtedly become the primary battleground for capital aggregation and value recovery, laying a solid foundation for the start of the next cycle.