Crypto Market Weekly Report: Frequent Regulatory Developments, New Stablecoins Rising

Market Overview

macro environment

The US economy continues to perform better than expected, with persistent inflation. The market expects that the Federal Reserve's first interest rate cut may be delayed until September, and the total number of rate cuts for the year may not exceed two. Before inflation consistently falls back to the 2% target, long-term treasury yields may continue to rise to curb economic demand. Recently, the US stock market has shown significant adjustments, and the crypto market has fluctuated accordingly.

market performance

This week, Bitcoin is showing a weak downward trend, and most value coins are generally declining. The main focus of the market is on the Meme sector, which has less resistance to rising and lacks significant venture capital selling pressure.

Several trends worth noting:

1. The native token of a certain trading platform has broken through the monthly line against Bitcoin. The recent court ruling results for the platform's founder in the United States continue to simmer, and if the ruling is lenient, the token may see a significant increase.

2. A trading platform is about to launch ETH re-staking business related coins, with similar projects reaching a market value of 4 billion USD. It is particularly important to note that the launch time is earlier than the airdrop receiving time.

3. The overall expectations for the Bitcoin rune ecosystem are low. A rune stone project airdropped new runes to holders, with a market value reaching 350 million USD at one point, and significant short-term trading volume.

Bitcoin Analysis

on-chain data

The fourth Bitcoin halving has been completed, with the supply inflation rate dropping to 0.85%, lower than gold's 2.3%. Unlike previous years, this year saw over $12 billion in spot ETF inflows, the interest rate environment is at its highest in over 20 years, and about 94% of Bitcoin has been mined.

The market value of stablecoins has increased by 2%, and the long-term funding fundamentals continue to show a positive trend.

The MVRV-Z Score indicator is currently at 2.3, which is in the middle stage. This indicator is in the top range when it is greater than 6 and in the bottom range when it is less than 2.

Institutional funds have shown a net outflow for two consecutive weeks, mainly due to investors' expectations that the Federal Reserve may keep interest rates elevated for a longer period.

futures market

The funding rate is close to zero this week. Typically, a rate of 0.05-0.1% indicates more long leverage, which could be a short-term top; while a rate of -0.1-0% indicates more short leverage, which could be a short-term bottom.

The Bitcoin futures open interest has remained basically flat this week.

The futures long-short ratio is 1.7, still in the greed zone. Generally speaking, this indicator indicates panic when it is below 0.7 and greed when it is above 2.0. However, it should be noted that this data is highly volatile and has limited reference value.

spot market

The market has shown a volatile downward trend after undergoing the test of geopolitical risks. The Bitcoin contract rate briefly turned negative, reflecting an excessively pessimistic market sentiment. In the long term, we are still on a bullish track, although the likelihood of the Federal Reserve injecting large amounts of liquidity in the short term is low, there still exists growth momentum in some sub-markets.

Public Chain Ecology

The total locked amount ( TVL ) has risen to around 93 billion USD this week, an increase of about 6 billion USD, with a growth rate of 6.9%. Except for the Bitcoin chain, mainstream public chains have seen varying degrees of increase in TVL. Ethereum and Base chains increased by 7%, TRON, Polygon, and Arbitrum chains all rose by about 5%, Solana chain increased by nearly 11%, and BSC chain rose by 17%. Notably, the Merlin chain continued to surge strongly by 22%, with a growth rate exceeding 2100% in the past month, and the total TVL has surpassed 1 billion USD. Polygon and Optimism chains have dropped out of the top ten in TVL.

NFT market

This week, the floor prices of blue-chip projects in the NFT market generally increased, with the market stabilizing and slightly rebounding. BAYC rose by 13%, MAYC by 3%, Pandora by 14%, Space Doodles by 26%, Azuki by 8%, and LilPudgys by 8%. However, both CryptoPunks and Defrogs fell by 8%.

Overall trading volume is still declining, while the number of first-time and repeat buyers has seen a slight increase. The market has recently lacked blockbuster projects, and the sluggish sentiment continues.