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U.S. debt dumping intensifies, interest rate hike expectations decline, altcoins welcome a rebound, and the Ethereum ecosystem may become the market's main line.
Crypto Market Weekly: US Bonds Sold Off, Rate Hike Expectations Decrease, Alts Strengthen
Market Viewpoint
macro liquidity
Recently, the liquidity of coins has shown signs of improvement. The Federal Reserve expects inflation to further moderate. The US dollar index is approaching a new high for 2024, strengthened by interest rates and political uncertainty. The US stock market generally maintains an upward trend, with global funds continuously flowing into US stocks, with approximately $30 billion in new funds entering over the past month. In contrast, the performance of the crypto market has significantly lagged behind that of US stocks.
overall market trends
This week, Bitcoin experienced fluctuations and declines, while the Ethereum/Bitcoin exchange rate strengthened. Small-cap tokens showed weak performance, and the European Cup events diverted market attention. The Ethereum ETF is likely to be approved in early July, with the market rebound mainly focusing on the Ethereum ecosystem.
Tokens worth paying attention to include:
LDO: As a leader in Ethereum staking, it will continue to develop re-staking services in the future. Ethereum is recognized by the U.S. SEC as not being a security, which is beneficial for the development of ETF-related staking services.
ZK: Ethereum ZK Layer 2 project, with liquidity provided by professional market makers, has shown average performance after listing. The Gas fees on the Ethereum chain have reached an 8-year low.
ZRO: A well-known cross-chain bridge project with a relatively small airdrop scale and a market value close to similar projects.
Bitcoin market
The market is in a stage of low-volume consolidation. Despite the wide fluctuations in price, Bitcoin investors are still maintaining profits. However, investor interest has declined, with spot and derivatives markets as well as on-chain trading volumes continuing to shrink. Typically, after reaching a new high, the market needs sufficient time to digest selling pressure.
The market capitalization of stablecoins remains stable, with a recent slowdown in the trend of capital inflows. Institutional funds have seen a continuous net outflow. However, Ethereum has experienced a significant net inflow against the trend due to expectations of the launch of a spot ETF.
The long-term trend indicator MVRV-Z Score reflects the overall profit status of the market. The current indicator is 2.1, in the middle stage. Greater than 6 is the top range, less than 2 is the bottom range. MVRV breaking below the key level of 1 indicates that holders are generally in a state of loss.
The futures funding rate has slightly decreased this week. A rate between 0.05% and 0.1% indicates a higher long leverage, which may suggest a short-term market top; a rate between -0.1% and 0% indicates a higher short leverage, which may suggest a short-term market bottom.
The Bitcoin futures open interest continued to decline this week. The futures long-short ratio is 2.3, indicating that retail investors are bullish, suggesting that the market may not have hit the bottom yet. Generally speaking, retail sentiment often serves as a contrarian indicator, with below 0.7 indicating panic and above 2.0 indicating greed. However, the long-short ratio data can be quite volatile, making it of limited reference value.
Bitcoin and Solana are both undergoing weekly adjustments, expected to conclude by early August. Ethereum, TON, and the BASE ecosystem are performing strongly. The Ethereum ETF is expected to be approved in early July, TON is about to land on major exchanges, and BASE is introducing new wallet users. The Ethereum ecosystem is likely to become the main focus of the market in the coming month.
Market Data
total locked value of public chain
This week, the TVL is $100.9 billion, down $10.7 billion, a decrease of 9.6%. The TVL of mainstream public chains has almost all declined, with only the MERLIN chain rising by 3%. The TRON chain fell by 3%, the BSC chain fell by 5%, the SOLANA chain fell by 4%, the BASE chain fell by 2%, both the Bitcoin chain and the POLYGON chain fell by 4%, and the OP chain fell by 5%, while the AVALANCHE chain fell by 12%. Notably, the TON chain rose by 15% this week and has increased by 108% this month. In the short term, the performance of the TON and SOLANA ecosystems can be focused on.
NFT market
This week, the floor prices of blue-chip projects in the NFT market have fallen significantly, with the overall market continuing to decline. CryptoPunks dropped 13%, BAYC dropped 17%, Pudgy Penguins dropped 28%, Space Doodles dropped 35%, Azuki dropped 23%, The Captainz dropped 16%, MAYC dropped 22%, and LilPudgys dropped 29%. Only Milady saw an increase of 4%.
The overall trading volume of the NFT market has seen a slight decline, with blue-chip project trading volume dropping by about 20% over the past week. The number of first-time buyers and repeat buyers continues to decrease. Overall, the NFT market remains in a state of extreme stagnation, with a harsh market environment.