Crypto Market Weekly Report: US Treasury Sell-off and Lower Interest Rate Hike Expectations, Alts Market Heats Up

Market Overview

macro liquidity

Recently, currency liquidity has improved. The Federal Reserve expects inflation to continue to decline moderately. The US dollar index is approaching a 2024 high, driven by interest rates and political uncertainty. The US stock market overall maintains an upward trend, with a significant influx of global funds; approximately $30 billion of new funds have entered the US stock market in the past month. In contrast, the crypto market has clearly lagged behind the US stock market.

overall market行情

This week, Bitcoin has been fluctuating downward, while the Ethereum/Bitcoin exchange rate has strengthened. Alts have performed weakly, and the European Cup events have diverted market attention. The Ethereum ETF is likely to be approved in early July, and the market rebound is mainly centered around the Ethereum ecosystem.

Projects worth paying attention to include:

1. LDO: As the leader in Ethereum staking, it will continue to develop its re-staking business in the future. The U.S. SEC has determined that Ethereum does not fall under securities, which is beneficial for the future development of Ethereum ETF staking.

2. ZK: Ethereum ZK Layer 2 solution, with liquidity provided by a market maker, has shown average performance upon listing. On-chain Gas fees on the Ethereum chain have reached an 8-year low.

3. ZRO: A well-known cross-chain bridge project with a relatively small airdrop scale and a market value close to similar projects.

Bitcoin market

On-chain data shows that the market is in a consolidation phase with decreasing volume. Although prices are fluctuating widely, Bitcoin investors overall remain in a profit state. However, investor interest has declined, with spot and derivatives markets and on-chain trading volume continuing to shrink. Typically, after reaching new highs, the market needs sufficient time to digest the selling pressure.

The market value of stablecoins remains stable, with a recent slowdown in the trend of capital inflows. Institutional funds have continuously experienced net outflows, but Ethereum has seen a significant net inflow contrary to the trend due to the upcoming launch of a spot ETF.

The long-term trend indicator MVRV-Z Score is currently at 2.1, in the middle stage. When this indicator is greater than 6, it indicates a top range, and when it is less than 2, it indicates a bottom range. The MVRV has dropped below the key level of 1, indicating that holders are overall in a state of loss.

In the futures market, the funding rate has slightly decreased this week. The long-short ratio is 2.3, indicating that retail investors are highly optimistic about bottom-fishing, and the market may not have reached the bottom yet. Open interest continues to decline.

In the spot market, Bitcoin and a certain public chain are showing weekly adjustments, expected to continue until early August. Ethereum, a certain public chain, and a certain Layer 2 ecosystem are performing strongly. The Ethereum ETF is expected to be approved in early July, and a certain public chain will be launched on a certain large exchange soon, while a certain Layer 2 is introducing new wallet traffic from a certain exchange. The Ethereum ecosystem is likely to become the main line of the market in the next month.

Market Data

public chain locked amount

This week's total locked value (TVL) is 100.9 billion USD, down by 10.7 billion USD, a decrease of 9.6%. The TVL of mainstream public chains generally declined, with only one public chain increasing by 3%. One public chain rose by 15% this week, with a cumulative rise of 108% this month, showing impressive performance. The market as a whole has entered an adjustment phase, and certain public chain ecosystems are worth focusing on in the short term.

NFT market

This week, the floor price of blue-chip projects in the NFT market has significantly dropped, with the market continuing to decline. Mainstream projects such as CryptoPunks and BAYC have seen a decline of 13%-35%. Only Milady has risen 4% against the trend.

The overall trading volume of the NFT market has slightly declined, with blue-chip project trading volumes generally decreasing by about 20%. The number of first-time and repeat buyers is also gradually decreasing. Overall, the situation in the NFT market remains severe, and the environment is extremely harsh.

Conclusion

The crypto market is currently in a correction phase, with the Ethereum ecosystem and certain emerging public chains performing relatively strongly. Investors need to closely monitor the macroeconomic situation, regulatory trends, and the fundamental developments of various projects, operate cautiously, and control risks.