Recently spent the morning analyzing on-chain data and observing market trends. I want to share some key signals about the current market.

**Market Risk Sentiment is Warming Up**

From on-chain liquidity, large funds are quietly adjusting their positions. Regarding Bitcoin, wallets holding over 1000 coins are still accumulating, but the pace has clearly slowed down. More notably, the BTC balance on exchanges continues to decline, with 12,000 coins withdrawn in the past 24 hours. What does this indicate? Long-term holdings are locked in, but short-term funds are shifting.

The changes in the Ethereum L2 ecosystem are even more intuitive. On Arbitrum and Base chains, the proportion of Meme coin trading has plummeted by 30% over the past week, while the probability of new projects crashing immediately after launch has soared to 80%. These are not small numbers—this means smart money is starting to withdraw from speculative hotspots. Meanwhile, stablecoin reserves on exchanges have increased by 8% in a week. USDT is stacking up, but all waiting for a suitable retracement point.

**How Likely Is a Short-Term Correction?**

From a technical and on-chain cost perspective, Bitcoin may retest the 41k-42k range. This price zone has historically been a major cost area for large transactions, and once touched, it could trigger leverage liquidations. The purpose of this correction is clear: to clear out short-term hot money and over-leveraged longs.

If this shakeout occurs, it often leads to a reallocation of funds. Based on current technical developments and VC open positions, sectors like AI, DePIN, and RWA are expected to rotate. The funding stories in these areas have not been fully unleashed, and trapped positions have not yet been sold off on a large scale.

**Regarding Meme Coins, Stay Calm**

It’s not that Meme coins will die, but they will inevitably experience extreme differentiation. Many projects currently surging are actually just waiting for new buyers. But those with a solid community and active user base might actually present opportunities after a dip. The biggest test in this field is the project’s own resilience.

**Practical Action Suggestions**

Friends with over 50% in positions should seize a rebound to reduce holdings to below 50%. Keep some cash on hand because opportunities often come when you least expect them.

As for Meme coins, only participate with money you can truly afford to lose. More importantly, set strict stop-losses. For example, if you decide on a -30% cutoff, stick to it—don’t change your mind just because you like the story. The market is always the strictest teacher; losing money in a bull market often happens faster than in a bear market.

This week, pay attention to the inflow data of Bitcoin spot ETF funds. It will directly reflect the true attitude of institutional investors.

Everything on-chain is on-chain. The addresses that are fleeing or accumulating will tell us the answer through data.