The market is weak during the dual festivals, and Q1 next year may welcome a pump | Crypto market weekly report

Market Overview

This week, the crypto market is showing an overall downward trend influenced by the holiday season. The market sentiment index has slightly risen from 7% to 10%, but it remains in a state of extreme panic. Notably, despite the overall market weakness, USDC, which is primarily based in the US market, has still achieved a growth of 1.91%, indicating that institutional funds continue to enter the market, injecting some confidence into it.

The DeFi sector's TVL dropped slightly by 0.37% this week to $52.7 billion, but projects like machine gun pools and other stablecoin yield programs performed impressively. The overall supply of stablecoins continues to grow, indicating that despite the market correction, fundamental liquidity is still flowing in, and projects like machine gun pools are in high demand.

The AI Agent track continues to receive significant attention from the market, with a total scale reaching 10.9 billion USD. The aipool model, which combines TEE technology, has become a new focus in the market and is expected to become a new type of asset issuance method after "inscription hitting", demonstrating the development trend of deep integration between AI and blockchain technology.

Due to the impact of the holiday and the overall market decline, the performance of the Meme coin sector has been sluggish this week, with a noticeable decrease in investor participation and capital inflow, while market enthusiasm has temporarily shifted to other sectors.

The public chain sector shows strong resilience against downturns. Stacks has achieved an important milestone with sBTC, BOB is advancing the development of the BitVM Bridge, and Taiko has launched a new round of ecological plans, all indicating that major public chains are continuously making efforts in technological innovation and ecological construction.

Looking ahead, the market is expected to continue its sluggish trend during the New Year's holiday. Investors are advised to maintain a defensive allocation and increase the proportion of top assets, while moderately participating in high-yield gun pool projects. In the long term, the market generally anticipates a pump in the first quarter of 2025, with AI Agent and DeFi gun pool projects worthy of close attention.

Market Sentiment Index Analysis

The market sentiment index has risen from 7% last week to 10%, still in the extreme fear zone. Altcoins have performed weaker than the benchmark index this week, showing a significant downward trend. The sharp decline in liquidity due to the Christmas holiday has increased market price volatility, making sudden rises and falls more likely. Given the current market structure, it is expected that Altcoins will remain in sync with the benchmark index in the short term, with a low probability of independent trends.

When Altcoins are in a state of extreme panic, the market is often at a temporary bottom, and a reversal to the upside could happen at any time.

Overview of Overall Market Trends

• The crypto market is in a downtrend this week, and the sentiment index remains in extreme fear.

• DeFi-related projects have performed outstandingly, showing the market's continued focus on enhancing baseline returns.

• The AI Agent track project has received high attention this week, indicating that investors are actively looking for the next market breakout point.

Hot Track

AI Agent

This week, the market is in a downward trend, with all sectors in a state of decline. Although most token prices in the AI Agent sector have also fallen, it remains the most discussed topic in the market. This week, there has been a lot of discussion about the development of the aipool model, which combines AI Agent and TEE, and its impact on the future of the crypto market and Defi.

One of the boosters that triggers periodic rises in the crypto market is the new asset issuance methods. For example, past methods like ICO, IEO, INO, IDO, and打铭文 have rapidly propelled market development and price increases. In the context of the rapid integration of AI and encryption, aipool has become a highly popular asset issuance method at the moment, and it is also a continuation of "打钱FI" at the beginning of 2024. If the aipool model is widely accepted by the market, it may soon lead to a wave of asset issuance driven by it, which is worth paying close attention to.

DeFi track

TVL growth ranking

The top 5 projects with the largest TVL rise in the past week (excluding projects with a smaller TVL, the standard is over 30 million USD):

1. Resolv: 82.04%, TVL 239.01 million
2. USDX Money: 74.25%, TVL 446.42 million
3. Usual: 55.56%, TVL 1599.36 million
4. Hashnote: 52.54%, TVL 1652.47 million
5. Spectra: 51.81%, TVL 122.55 million

Overall performance of the track

• The market value of stablecoins is steadily growing: USDT has slightly decreased by 0.27%, while USDC has risen by 1.91%. The growth of USDC, which is primarily focused on the US market, indicates that institutional funds are continuously entering the market.

• Liquidity is gradually increasing: The risk-free arbitrage rates in traditional markets continue to decline with the interest rate cuts, while the arbitrage rates of on-chain Defi projects increase due to the rise in the value of crypto assets, returning to Defi will be a good choice.

• Fund Status: The TVL of Defi projects has slightly decreased by 0.37% to 52.7 billion USD. This is mainly influenced by the Christmas and New Year holidays in the Western markets, leading to a decline in trading volume and on-chain activity for various tokens. It is recommended to pay close attention to the overall TVL changes in January to observe whether the downward trend continues.

Other track performance

public chain

The top 5 public chains by TVL rise in the crypto market over the past week (excluding public chains with smaller TVL):

1. Stacks: 16.95%, TVL 130.62 million
2. BOB: 12.81%, TVL 232.55 million
3. Taiko: 4.22%, TVL 413.49 million
4. Cardano: 2.94%, TVL 503.44 million
5. Sei: 1.23%, TVL 224.31 million

Overview of the Gainers List

The top 5 tokens with the highest rise in the market over the past week (excluding tokens with very low trading volumes and meme coins):

1. ZEN (Horizen): 124.91%, circulating market cap $556,570,852, circulation rate 99.99%
2. MOCA (Moca Network): 108.87%, circulating market value $557,280,321, circulation rate 17.41%
3. PHA ( Phala Network ): 105.84%, circulating market value $216,306,693, circulation rate 77.14%
4. AGLD ( Adventure Gold ): 73.77%, circulating market value $170,111,563, circulation rate 100.00%
5. MOVE (Movement): 66.81%, Circulating Market Cap $2,581,550,729, Circulation Rate 22.52%

Meme Token Rise Leaderboard

1. LUNA (Luna by Virtuals): 60.21%, circulating market cap $116,514,426, belonging to public chain Base
2. KOMA ( Koma Inu ): 37.49%, circulating market value $108,799,371, belonging to public chain BSC
3. AIXBT (aixbt by Virtuals): 30.37%, Circulating Market Cap $360,123,237, Belongs to Public Chain BSC
4. SPX (SPX6900): 21.45%, circulating market value $749,449,535, belonging to the public chain Ethereum
5. TURBO (Turbo): 20.47%, circulating market cap $745,975,419, belonging to public chain Ethereum

This week, the Meme projects were significantly affected by the overall decline in the crypto market. During the Christmas holiday, the number of users participating in trading decreased, leading to capital withdrawals. There has been a noticeable reduction in investors in the Meme coin track, resulting in the current lack of attention and funds in this sector.

social media hot spots

According to data analysis, the L1s project has the highest attention on social media this week. Due to the Christmas holiday, the market, mainly driven by the United States, has entered a holiday phase, and market makers and institutions are on vacation, resulting in a significant decline in market liquidity. Ordinary investors have reduced on-chain investment activities and are accompanied by sell-offs, leading to a substantial drop in the market, but the decline of various public chains is relatively small.

When the overall market is experiencing a downturn, public chains usually perform better than other sectors. In addition to buying BTC and ETH for hedging, most funds are still invested in various public chains. After the decline ends and the market rises, public chains generally rise before other projects.

overall overview of market themes

According to weekly return rate statistics, the SocialFi track performs the best, while the RWA track performs the worst.

• SocialFi sector: The main player TON accounts for 91.07% of the market value, rising against the trend by 6.3% this week, leading the sector's performance.
• RWA track: Major projects OM, ONDO, and MKR account for 86.49%. This week, they dropped 10.76%, 19.86%, and 8.28% respectively, with significant declines leading to the worst performance in the track.

Next Week's Crypto Major Events Preview

• December 30: The European Securities and Markets Authority releases the MiCA encryption regulation implementation.
• January 2: The number of initial jobless claims in the United States for the week is announced.
• January 3: The court approved the FTX Chapter 11 restructuring plan to take effect.

Outlook for Next Week

Macro Factors Assessment

• Next week will enter the New Year's holiday, and fewer macro data will be released.
• In previous years during the New Year's Day holiday, the market, dominated by American buyers, usually continued the sluggish purchasing power seen during the Christmas period, and market volatility may increase.

Sector Rotation Trend

• DeFi track: Despite the current poor market environment, investors generally expect a potential pump in the first quarter of next year, and most investors are unwilling to sell their tokens. To increase their holding gains, they are participating in gun pool projects to enhance returns.

• AI Sector: The AI Agent track continues to attract market attention, with a scale reaching 10.9 billion USD. The aipool asset issuance model based on AI Agent + TEE has garnered widespread attention.

investment strategy suggestions

• Maintain a defensive allocation, increase the allocation ratio of top assets BTC and ETH, and enhance the risk-hedging properties of assets.
• While hedging risks, one can moderately participate in high-yield money gun pool Defi projects.
• It is recommended to remain cautious, strictly control positions, and manage risks effectively.