Crypto Market Weekly Report: US Bonds Sold Off, Lowering Rate Hike Expectations, Altcoin Market Rises

A. Market Viewpoints

1. Macroeconomic Liquidity

The liquidity of the currency has improved. The Federal Reserve expects inflation to continue to ease. The US dollar is approaching a new high for 2024, driven by interest rates and political instability factors. US stocks are generally on the rise, with global funds concentrating on US stocks, with approximately $30 billion of new funds flowing in over the past month. The crypto market is clearly underperforming compared to US stocks.

2. Overall Market Trends

This week, Bitcoin fluctuated downward, and the Ethereum/Bitcoin exchange rate strengthened. The altcoin market is sluggish, and the European Cup matches have diverted market attention. The Ethereum ETF is likely to be approved in early July, and the market rebound is centered around the Ethereum ecosystem.

Projects worth paying attention to:

1. LDO: As a leader in Ethereum staking, it will continue to develop its re-staking business in the future. The US SEC has classified Ethereum as a non-security, which is beneficial for the future development of Ethereum ETFs in staking.

2. ZK: Ethereum's ZK Layer 2 solution, providing liquidity from professional market makers, with average listing performance. Ethereum on-chain Gas fees hit an 8-year low.

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

3. Bitcoin Market

1. on-chain data

The market has entered a phase of low-volume consolidation. Despite the wide price fluctuations, Bitcoin investors remain in a profitable state. However, investor interest has declined, with spot and derivatives markets, as well as on-chain transaction volumes, continuously shrinking. Typically, after reaching a new high, the market requires sufficient time to digest the selling pressure.

Stablecoin market capitalization remains stable, and the recent trend of capital inflow has slowed down.

Institutional funds have begun to experience continuous net outflows. However, Ethereum has seen a significant net inflow against the trend due to the upcoming launch of a spot ETF.

The long-term trend indicator MVRV-Z Score is based on the total market cost and reflects the overall profitability situation. The current indicator is 2.1, which is in the middle stage. An indicator greater than 6 indicates a top range, while less than 2 indicates a bottom range. If MVRV falls below the critical level of 1, it indicates that holders are overall in a state of loss.

2. futures market

The futures funding rate has slightly decreased this week. A rate in the range of 0.05-0.1% indicates a larger long leverage, which may suggest a short-term top; a rate in the range of -0.1-0% indicates a larger short leverage, which may suggest a short-term bottom.

Futures open interest: This week, Bitcoin open interest continues to decline.

The futures long-short ratio is 2.3, indicating that retail investors are quite optimistic about bottom fishing, and the market may not have fully dropped yet. Retail sentiment is usually a contrarian indicator, with below 0.7 indicating panic and above 2.0 indicating greed. The long-short ratio data is highly volatile, making it of limited reference value.

3. spot market

Bitcoin and Solana are both undergoing 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 launch on a major exchange, and BASE is introducing a new wallet that will bring traffic. The Ethereum ecosystem is likely to become the main focus of the market in the coming month.

B. Market Data

Total Lockup Volume of Public Chains

The total locked value (TVL) is $100.9 billion, down $10.7 billion from last week, a decrease of 9.6%. The TVL of mainstream public chains generally decreased, with only the MERLIN chain rising by 3%. The TRON chain dropped by 3%, the BSC chain dropped by 5%, the SOLANA chain dropped by 4%, the BASE chain dropped by 2%, both the Bitcoin and POLYGON chains dropped by 4%, the OP chain dropped by 5%, and the AVALANCHE chain dropped by 12%. This month, only the TON chain rose against the trend, with a weekly rise of 15% and a monthly rise of 108%. The market has entered a consolidation period, and in the short term, attention can be focused on the performances of the TON and SOLANA ecosystems.

2. NFT market data

This week, the floor prices of blue-chip projects in the NFT market have significantly dropped, and the overall market continues to decline. CryptoPunks fell by 13%, BAYC by 17%, Pudgy Penguins by 28%, Space Doodles by 35%, Azuki by 23%, The Captainz by 16%, MAYC by 22%, and LilPudgys by 29%. Only Milady rose by 4%.

The overall trading volume of the NFT market has slightly decreased, with blue-chip projects experiencing a weekly decline of about 20%. The number of first-time and repeat buyers is also gradually decreasing. Overall, the NFT market is performing extremely poorly, and the market environment has deteriorated significantly.