Looking at the recent downturn in the altcoin market, many blame it on insufficient liquidity. But a closer look reveals that the issues are far more complex.

Several veteran players in the industry have been complaining in recent chats that, on the surface, it seems like a liquidity crunch and poor trading volume, but in reality, it reflects an entire market iteration—projects still copying the old scripts from 2017 and 2021, which should have been淘汰ed long ago.

**The times have changed, and so must the strategies**

Remember 2017? It was indeed a crazy era. Even bizarre altcoins could surge dozens or hundreds of times. At that time, there were 800 to 1,000 ICO projects taking turns harvesting.

2021 was slightly better, with DeFi and NFT concepts giving the market some support and narrative backing.

Now? By 2025, the situation has completely changed. The number of active tokens each day has reached tens of thousands, with 195,000 new tokens added just in March alone. The supply has grown terrifyingly, yet investors are becoming more selective—no longer is it the era of buying whatever appears. Funds are now concentrating on projects with real fundamentals. Empty shells without substantial backing, no matter how good the story, cannot be saved.

**Low circulation, high valuation: the biggest trap for harvesting**

The deepest trap now is this low circulation, high FDV (Fully Diluted Valuation) model. Project teams release only a small portion of tokens for circulation at launch, artificially inflating the valuation to sky-high levels.

Once early investors' tokens unlock, large holders and teams start dumping, causing the price to plummet instantly. Unlock waves from major projects like Starknet are enough to shake the market, and what about smaller projects? Even more chaotic.

It's not that there is a lack of funds; investors have just learned to be smarter.