Foresight Ventures Weekly Market Report: Will Web3 Bow to AI?

U.S. stocks made a comeback and rose to a nine-month high, led by artificial intelligence-related technology leaders, but most U.S. stocks fell instead. This situation may not last, and a pullback may put pressure on the encryption market.

Written by: Jonas

A. Market View

1. Macro liquidity

Currency liquidity has tightened. The U.S. economy is not in recession and is stronger than expected. The U.S. dollar index continued to rebound at the weekly level. The market expects that the Fed may pause interest rate hikes in June, but it may increase this summer, approaching the end of the interest rate hike cycle. The U.S. debt ceiling has reached an agreement in principle, but the risk of bleeding from the solution remains the main headwind for short-term asset prices. US stocks staged a comeback and rose to a nine-month high, led by artificial intelligence-related technology leaders, but most US stocks fell instead. This situation may not last, and a pullback may put pressure on the encryption market.

Second, the whole market situation

Top 100 gainers by market capitalization:

The market is weak and volatile this week. BTC dominance hit 49%, close to its highest level since May 21. The ETH/BTC exchange rate has risen, and ETH has not had more chips stranded in the exchange like BTC, which means that the buying sentiment of ETH remains at a high level. Over the past few months, artificial intelligence fever has swept the technology industry, and many mainstream Web3 funds have turned to AI investment. Market hotspots mainly revolve around AI and short-squeeze rising Zhuang Zhuang stocks.

1. LINA: Recently, a new stablecoin LUSD has been launched for pledge, and the pledge ratio is as high as 22% of the circulation. The yield of LUSD and BUSD group LP mining LINA is 60%, and there should be 10% hedging mining. The main force of the market bought 23% of the circulating supply and squeezed the market.
2. GMD: The core product of the GMD protocol is a set of delta neutral treasury built on GMX's GLP, and most of the income is shared with token holders. In the future, the activities of GMD launchpad will be strengthened. Participants need to pledge the token GMD, and the platform will charge 4% of the total amount raised by launchpad as income.
3. SOL: Solana started to talk about the narrative of the AI public chain, because the Rust language is more suitable for AI.

3. BTC Market

1) Data on the chain

The competition between BTC and ETH is getting closer, and both have their own grand narrative or fundamental drivers. The ETH/BTC exchange rate broke the resistance level.

*BTC: Banking crisis, BRC20, the most liquid denationalized currency on the market.

• ETH: Global computer, Cancun upgrade of L2, pledge deflation after Shanghai upgrade.

The funds on the market kept escaping. The market stock game, large funds wait and see, obviously the risk-free return of up to 5% on U.S. bonds is more attractive. The market value of Binance’s newly launched stablecoin TUSD has declined, and the road to strong supervision may be even more difficult.

The long-term trend indicator MVRV-ZScore is based on the total market cost and reflects the overall profitability of the market. When the index is greater than 6, it is the top interval; when the index is less than 2, it is the bottom interval. MVRV fell below the key level 1, and holders are generally in the red. The current indicator is 0.52, entering the recovery phase.

2) Futures Quotes

Futures funding rate: The rate is neutral this week, and the market sentiment is stable. The fee rate is 0.05-0.1%, with more long leverage, which is the short-term top of the market; the fee rate -0.1-0%, with more short leverage, is the short-term bottom of the market.

Futures open interest: The total open interest decreased this week, and the main funds in the market retreated.

Futures long-short ratio: 2.0. Retail investors are in a strong mood to buy bottoms. Retail investor sentiment is mostly a negative indicator, below 0.7 is more panic, and above 2.0 is more greedy. The long-short ratio data fluctuates greatly, and the reference significance is weakened.

3) Spot Market

Market momentum has slowed this week, with BTC failing to break upwards. The market has fluctuated in a wide range for more than 2 months, and the trading volume has dropped by about 30% compared with the past 6 months. Historically, this monthly volatility belongs to the lowest 20%, and this balance seems to be broken soon.

B. Market Data

1. The total lock-up amount of the public chain

2. TVL ratio of each public chain

Total TVL rose slightly this week by 0.3b, or 0.6%. This week, the TVL ratio of the ETH chain stopped its continuous slight decline for nearly a month, and rose 0.6% this week to 57.76%.

According to the data of the past seven days, in the core public chain of the second-tier Ethereum network, Arbitrum continued to fall by 0.61%, and other popular L2s basically stopped their downward trend and began to rise. Among them, Optimism rose by 0.4% this week, Polygon rose 2.76%, but Avalanche has fallen for several weeks and continued to fall 0.13% this week.

3. The lock-up amount of each chain protocol

1) ETH lock-up amount

2) BSC lock-up amount

3) Tron Lockup Amount

4) Avalanche Lockup Amount

5) Polygon lock-up amount

6) Arbitrum Lockup Amount

7) Optimism Lockup Amount

4. History of ETH Gas fee

The current transfer fee on the chain is about $1.62, which has not changed much compared to last week and has rebounded slightly. This is a 44% increase from the same time last week. However, the market still lacks hotspots this week, and gas fluctuates in the bottom range. Uniswap transaction fees are about $14.55, and Opensea’s transaction fees are about $5.65. From the perspective of gas consumption, Uniswap occupies the top position.

5. Changes in NFT market data

1) NFT-500 Index:

2) NFT market conditions:

3) NFT trading market share:

4) Analysis of NFT buyers:

5) Number of active projects:

From the perspective of the total volume of the market, this week stopped the decline for several consecutive weeks and began to rebound. According to the NFT market share, blur accounts for about 71%, a decrease of 1.1% compared to last week. Opensea accounted for about 17.2%, down 2% from last week.

From the perspective of the number of active projects, it has fluctuated and declined in the past two months, especially projects with a volume above 10eth. It can be seen that the NFT market still lacks confidence in the near future. However, the number of active projects at each level has rebounded this week.

From the analysis of the situation of NFT buyers, there is a trend of rapid recovery in the near future, but in the long run it is still in the bottom range. This week, the number of returning buyers increased by 86% compared with last week, and the number of first-time buyers increased by 291%, which may be Milady’s recent Hotspots attract user engagement.

From an overview of the NFT market, the floor prices of blue-chip NFTs generally rose this week, with Azuki up 9.15%, MAYC up 1.99%, BAYC up 1%, and Milady up 5.98%.

6. The latest financing situation of the project