Crypto Market Weekly Report: Frequent Regulatory Developments, Emergence of New Stablecoins

Market Overview

macro environment

The US economy continues to grow beyond expectations, with inflation remaining sticky. The market expects the Federal Reserve's first rate cut to be delayed until September, with the total number of rate cuts for the year possibly not exceeding two. Before inflation continues to fall back to the 2% target, long-term Treasury yields may continue to rise to curb economic demand. Recently, the US stock market has seen a significant decline, and the crypto market has adjusted accordingly.

market performance

This week, Bitcoin is showing a weak downward trend, with value-type encryption coins generally declining. The market is mainly focused on the Meme coin sector, which has little resistance to rising and lacks significant venture capital selling pressure.

It is worth noting that:

1. The native token of a certain trading platform has broken through the monthly line against Bitcoin. The platform's founder is about to face a U.S. judicial ruling, and if the judgment is lenient, the token may experience a significant rebound.

2. A certain trading platform will launch a new staking business related token for Ethereum, which is similar to a peer project with a market value of $4 billion. The special feature is that the token launch time is earlier than the time for retail investors to receive airdrops.

3. The overall expectations for the Bitcoin rune ecosystem are relatively low. A certain rune stone project airdropped runes to holders, reaching a market value of 350 million USD, with considerable short-term trading volume.

Bitcoin Analysis

on-chain data

The fourth Bitcoin halving has occurred, with the supply inflation rate dropping to 0.85%, lower than gold's 2.3%. Unlike previous times, this year there has been over $12 billion in spot ETF inflows, the interest rate environment is at its highest level in more than 20 years, and about 94% of Bitcoin has already been mined.

The market value of stablecoins has increased by 2%, and the fundamentals of long-term funds remain positive. The MVRV indicator is at 2.3, entering a middle stage, with holders generally in a state of loss. Institutional funds have seen a net outflow for two consecutive weeks, and investor interest has weakened, primarily influenced by the possibility of the Federal Reserve maintaining high interest rates.

futures market

The funding rate for futures is close to zero, with a relatively balanced long and short force. The open interest for Bitcoin futures remained stable this week. The long-short ratio is 1.7, indicating that market sentiment is still somewhat optimistic, but its reference value is limited.

spot market

The market has experienced a turbulent decline, influenced by geopolitical risks. The Bitcoin contract rate briefly turned negative, reflecting pessimistic sentiment. In the long term, although the Federal Reserve is unlikely to inject significant liquidity in the short term, the market remains on a bullish trajectory, with growth momentum still present in certain areas.

Public Chain Ecosystem

The total locked value (TVL) rose to around $93 billion this week, an increase of 6.9%. Apart from the Bitcoin chain, the TVL of mainstream public chains generally increased. A certain emerging public chain performed strongly, with a monthly increase of over 2100%, and its TVL surpassed $1 billion.

NFT Market

The NFT market has seen a slight rebound, with most blue-chip projects experiencing an increase in their floor prices. BAYC rose by 13%, MAYC by 3%, and Azuki by 8%. However, the market trading volume continues to decline, with a slight increase in the number of first-time and repeat buyers. Currently, the market lacks blockbuster projects, and the sluggish sentiment persists.

Overall, the crypto market is in a correction phase, but the long-term upward trend remains unchanged. Investors need to closely monitor macroeconomic changes and regulatory developments, while also keeping an eye on emerging projects and potential opportunities.