Written by ChandlerZ, Foresight News
At this time last year, the Bitcoin ecosystem was at its peak. From the inscription craze sparked by BRC-20, to the rapid expansion of the market value of assets such as ORDI, to the multiple multiple increases in the value of SATS, RATS and other projects in a short period of time, the transaction volume, gas fees and miners’ income on the Bitcoin chain soared, pushing the Bitcoin ecosystem to an unprecedented high.
But the heat is fleeting. Over the past year, the performance of the Bitcoin ecosystem has almost become a reverse indicator of sector rotation. In terms of price decline, ORDI, SATS and other representative projects have experienced a maximum retracement of more than 95%; in terms of on-chain activity, the volume of inscription transactions has continued to shrink, and the interval between project releases has been greatly extended; in terms of community expectations, many projects have disappointed with airdrops, and the heat of the Runes ecosystem has rapidly declined after its launch, and the overall sentiment has become cautious or even indifferent.
In the past week, the Bitcoin ecosystem sector has shown a significant rebound. The top asset ORDI rose by nearly 97% in six days, and PUPS rose by 127.04%, making it one of the strongest performing projects in this round of rebound; SATS rose by 87.57%, nearly doubling from the lowest point of the year; ORDI and NALS rose by 86.22% and 90.77% respectively, and other assets such as BANK, BB (BounceBit), BSSB, etc. all recorded a weekly increase of 40-80%, and mainstream assets such as BRC-20 and Runes have ushered in repairs. At the same time, the inflow of funds on the chain has increased significantly.
The “difficult” ecological situation
Behind this rapid rise, looking back at the medium- and long-term trend of the entire Bitcoin ecosystem, it is not difficult for investors to find its ice and fire characteristics:
The decline since the beginning of the year is generally between 50-70%, and if calculated from the high point, the decline is more than 90%;
The fundamentals of most projects are lagging behind, BTC L2 is mostly idle, and there is a lack of mature products.
Airdrops and incentives were not as expected. Some projects were once highly anticipated, but their ecosystems progressed slowly, resulting in a long-term lack of community confidence.
The protocols are decentralized, and the popularity of protocols such as Runes quickly dissipated. Although they once occupied more than 60% of BTC chain transactions in the early days of their launch, the high data only lasted for a few days and quickly fell to single-digit levels.
Judging from the number of deployed BRC20, it is currently close to the “freezing point”
These data show that this rise is not based on a strong fundamental shift, but more like a highly elastic game driven by emotional repair + capital rotation.
Why the rebound at this point in time?
The background of market style switching is clear
Ethereum previously rebounded 50% against the backdrop of huge community FUD, verifying the typical market structure of low-expectation reversal. This phenomenon triggered the migration of funds to sectors with lower valuations and more adequate corrections.
The Bitcoin ecosystem has fallen sharply and has great elasticity
Almost all the top projects have fallen by more than 90% after the craze last year, and the market generally regards them as value has been compressed to the point where there is no trading logic. The rebound often starts from this abandoned area.
Speculative Gambling Enhanced
Marginal ecological assets have become high-volatility targets for short-term capital sniping.
Will the subsequent market trend be sustainable?
Although the current increase is eye-catching, if we take a longer-term perspective, the current rebound in the Bitcoin ecosystem is more of an expected repair rather than a confirmation of a trend reversal. The ecosystem still faces a series of structural problems that restrict its continued performance.
First of all, from the overall development pace, whether it is BRC-20 or Runes, the progress of related projects is still slow. The Bitcoin native DeFi that was originally highly anticipated has not yet built a complete vertical system, and the lack of supporting infrastructure makes it difficult to form real synergy within the ecosystem. At the same time, developer enthusiasm has also subsided. The GitHub update frequency of multiple core projects has dropped significantly, and the overall technical community is far less active than Ethereum, Solana and other chains. Against the background of the phased shift of capital and user attention, the cooling of the developer ecosystem has undoubtedly further weakened medium-term expectations.
Overall, this round of rebound is more like a mistake-making triggered by extremely low valuations and extremely weak expectations. After a year of emotional overdraft and valuation decline, funds have refocused on these deeply fallen assets at the node of style switching, releasing temporary elasticity.
In order for the Bitcoin ecosystem to truly move out of an independent market, it is not enough to just increase the price. The recovery of the ecosystem depends on more solid product delivery, more convincing user growth data, and the communitys re-cohesion for the future. If the rebound can be ignited by emotions, then the continuation of the trend must be based on confidence and substantial progress.
