Recently, while analyzing on-chain data, I discovered an interesting phenomenon—during the last bull market, the major token addresses of those highly regarded tokens have hardly increased their holdings over the past three months; instead, they have been continuously releasing chips to retail investors. Meanwhile, some less conspicuous assets are quietly being absorbed by unfamiliar addresses, reflecting deeper changes in the market landscape.

As we dig deeper, we find that there are indeed some phenomena in the market that warrant caution. Especially when judging the life and death of tokens, there are several very practical indicators worth paying attention to:

First is the project's actual user base. Statistics show that many tokens ranked in the top 50 by market cap have fewer than 10,000 daily active users, yet they support a considerable market cap. These projects often lack stable protocol revenue and genuine user cash flow, relying solely on narrative support.

Second is the true state of liquidity. A sample check of the top 300 tokens by market cap revealed that more than 30% of these projects have over half of their trading volume concentrated in one or two trading pairs on certain exchanges. This highly concentrated liquidity is actually very fragile; once market-making support disappears, prices could face rapid declines.

Third is community activity. Compared to the number of active addresses holding tokens, what truly reflects the health of the ecosystem is the scale of active users participating in the project and the frequency of on-chain interactions.

Looking back now, the projects that are truly expanding applications and generating real cash flow are becoming increasingly distinct from those that rely solely on hype and liquidity to survive. For investors, learning to interpret these differences through on-chain data may be more valuable than chasing hot trends.