According to Balaji, the initial phase of Operation Prosperity Guardian was marked by a surge in memes suggesting a strong stance against the Houthis. However, the sentiment was not indicative of a positive market direction, hinting at underlying concerns or challenges in the operation's impact on market stability.

According to Balaji, the US Navy's defeat in the Red Sea, as indicated by the IMF Portwatch graph, has significant implications for global trade routes and, by extension, cryptocurrency markets. This situation has been evident since the announcement of the failed Operation Prosperity Guardian in late 2023, highlighting a decrease in US military and diplomatic influence. Such geopolitical shifts could lead to increased volatility in cryptocurrency markets as traders seek safe-haven assets.