Crypto Market Weekly Report: BTC and ETH Perform Weakly, Altcoins Experience a Rebound

This week, the overall cryptocurrency market showed a volatile trend. Bitcoin failed to follow the rise of the US stock market and other risk markets and instead experienced a decline. The main reason is the drop that occurred over the weekend when market liquidity was weak, coupled with the movement of Bitcoin from the address of a certain bankrupt exchange this week, leading to speculation in the market about a possible final payout, which caused the market to decline. Ethereum also fell along with the market, but the decline was relatively small. In terms of spot ETFs, funds are still flowing out, indicating that current investors have little interest in Ethereum.

Macroeconomics and Geopolitical Situation

The Federal Reserve's interest rate cut in September has been fully priced in by the market, and the current focus of discussion is on the extent of the rate cut. According to the economic data released this week, the market believes there is a high likelihood of a 25 basis point cut, which would be a conservative defensive rate cut. Indicators such as inflation expectations, CPI data, and initial jobless claims in the United States show that the economic condition is better than expected and remains resilient.

In terms of geopolitical situation, the Middle East situation has become tense again. A certain country's Revolutionary Guard attacked the U.S. military base in Lebanon, and the United States has also increased its military presence in the region. Ukraine has intensified its strikes against Russia, even attacking the Zaporizhzhia nuclear power plant, raising the risk of nuclear leaks and exacerbating the uncertainty of the Russia-Ukraine war.

Altcoin Market Performance

This week's market sentiment index rose to 13%, although it is an improvement from last week's 9.2%, it still remains in the fear zone. The rise in altcoin sentiment is mainly due to its performance being stronger than BTC and ETH, showing a rebound from last week. However, due to a lack of market hotspots and external macro factors affecting it, the competition between bulls and bears is intense, and the funds flowing into altcoins are relatively low, making this rebound difficult to sustain.

On the rise list, well-performing tokens are dispersed across multiple tracks such as L1s, NFTs, ETH-L2, DEX, and cross-chain, with a rebound strength greater than last week. Although the Meme coin track has generally rebounded, the rise is relatively smaller compared to other tracks.

In terms of social media popularity, the L1s track has received the highest attention. Most popular L1s projects performed better than BTC and ETH this week, but no special events occurred, which may be a corrective rise after last week's insufficient rebound.

According to weekly return rate statistics, the SocialFi sector performed the best, while the AI sector performed the worst. The main player in the SocialFi sector, TON, surged strongly due to a large exchange launching a mining project. In contrast, the AI sector mostly showed sluggish trends, indicating that market attention and funds have not concentrated here.

Outlook for Next Week

1. Bitcoin: Expectations of a U.S. economic recession have eased, and the forecast for the interest rate cut in September has been adjusted to 25 basis points. However, due to global geopolitical instability and differences in expectations regarding future interest rate cuts, it is expected that Bitcoin will continue to experience wide fluctuations before the Federal Reserve cuts interest rates.

2. Ethereum: The continuous outflow of funds from the spot ETF indicates that the current price attractiveness is low. It is expected to remain highly correlated with BTC and experience wide fluctuations.

3. Altcoin: Although it performed strongly this week, due to a lack of sustained upward momentum, it is expected to end the rebound next week and fluctuate in sync with the overall market.