Crypto Market Weekly Review: US Bond Selling and Rate Hike Expectations Drop, Alts Perform Outstandingly

Macroeconomic Environment and Market Overview

The liquidity of currencies is improving, and the Federal Reserve expects inflation to continue to improve moderately. The US dollar is strengthening, approaching a new high for 2024, influenced by interest rates and political factors. The US stock market is generally on an upward trend, with a significant influx of global capital, approximately $30 billion in new funds flowing into the US stock market over the past month. In contrast, the crypto market is significantly lagging behind the US stock market.

Market Trend Analysis

This week, Bitcoin fluctuated and dropped, while the Ethereum to Bitcoin exchange rate strengthened. The altcoin market performed poorly, partly due to the distraction caused by the European Cup events. The Ethereum ETF is likely to be approved in early July, and the market rebound mainly revolves around the Ethereum ecosystem.

Projects worth paying attention to include:

1. LDO: As a leader in Ethereum staking, it will continue to develop its re-staking business in the future. Ethereum has been determined by the US SEC not to be a security, which is beneficial for the future development of ETH ETF staking.

2. ZK: The ZK Layer 2 solution for Ethereum, supported by professional market makers, has had average performance since its listing. It is worth noting that the Gas fees on the Ethereum chain have reached an 8-year low.

3. ZRO: A highly anticipated cross-chain bridge project with a relatively conservative airdrop strategy, and its market cap is close to similar competitors.

Bitcoin Market Analysis

on-chain data

The market is in a phase of reduced volume consolidation. Despite the wide fluctuations in price, Bitcoin investors overall remain profitable. However, investor interest has declined, with spot and derivatives markets as well as on-chain trading volume continuing to shrink. This situation typically occurs after Bitcoin hits new highs, and the market needs time to digest the selling pressure.

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

The long-term trend indicator MVRV-Z Score is currently 2.1, which is in the middle stage. This indicator reflects the overall profitability of the market, with values greater than 6 indicating the top range and values less than 2 indicating the bottom range.

futures market

This week's funding rate has decreased slightly. Usually, a rate between 0.05-0.1% indicates a higher long leverage, which may suggest a short-term market top; a rate between -0.1-0% 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 1.3, and market sentiment is neutral. Retail sentiment is often a contrarian indicator, with below 0.7 indicating panic and above 2.0 indicating greed. However, the long-short ratio data is quite volatile, so its reference value is limited.

spot market

Bitcoin and Solana both show weekly adjustments, expected to continue until early August. Ethereum, TON, and BASE ecosystems are performing strongly. The Ethereum ETF is expected to be approved in early July, TON is about to be listed on a major exchange, and BASE is introducing a new wallet to bring traffic. The Ethereum ecosystem is likely to become the main theme of the market in the coming month.

Public Chain and DeFi Data

This week's total locked value ( TVL ) is $100.9 billion, a drop of $10.7 billion from last week, a decrease of 9.6%. The TVL of mainstream public chains generally declined, with the AVALANCHE chain dropping 12%, the worst performer, while the TON chain rose against the trend by 15%, accumulating a rise of 108% this month. The market is currently in a correction phase, and in the short term, the TON and Solana ecosystems are worth paying close attention to.

Overview of the NFT Market

This week, the floor prices of blue-chip projects in the NFT market have significantly dropped, and the overall market continues to decline. CryptoPunks dropped by 13%, BAYC dropped by 17%, Pudgy Penguins dropped by 28%, Space Doodles dropped by 35%, and Azuki dropped by 23%. Only Milady went against the trend and increased by 4%.

The overall trading volume of the NFT market has slightly declined, with the trading volume of blue-chip projects generally dropping by about 20%. The number of first-time and repeat buyers is also gradually decreasing. Overall, the NFT market remains sluggish, and the market environment is quite severe.