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

Market Observation

macro environment

The U.S. economic growth exceeded expectations, and inflation remains stubborn. The market expects the Federal Reserve's first interest rate cut may be delayed until September, with the total number of cuts for the year likely not exceeding two. Before inflation continues to fall back to the 2% target, long-term Treasury yields may continue to rise to curb economic demand. As a result, U.S. stocks have continued to decline, and the crypto market has adjusted accordingly.

Market Overview

This week, Bitcoin showed a weak downward trend, and value coins generally declined. The market is mainly focused on the Meme sector, which has become the direction with the least resistance for market growth due to the lack of substantial venture capital sell pressure.

It is worth noting that:

1. The platform coin of a certain trading platform has broken through the monthly line against BTC. The founder of the platform is about to face a verdict, and if the punishment is relatively light, the platform coin may experience a significant increase.

2. A certain trading platform will launch the ETH re-staking business related coin, which will go live on April 30, and the retail investors can claim the airdrop on May 2, which has attracted considerable attention in the market.

3. The overall expectation for the Bitcoin Rune ecosystem is relatively low. A certain project airdropped DOG runes to holders, and its market capitalization once reached 350 million USD, with considerable short-term trading volume.

Bitcoin market analysis

On-chain data

The fourth Bitcoin halving has occurred, reducing supply inflation by 50%. The new annual inflation rate is 0.85%, lower than gold's 2.3%, further highlighting its scarcity. Unlike previous years, this year has seen over $12 billion in spot ETF inflows, while facing the highest interest rate environment in over 20 years, and approximately 94% of Bitcoin has been mined.

The stablecoin market capitalization has increased by 2%, and the long-term capital fundamentals remain on a positive trend.

The MVRV-Z Score indicator is currently at 2.3, indicating a middle stage. This indicator reflects the overall profitability of the market, with values greater than 6 indicating a top range and values less than 2 indicating a bottom range. Currently, the MVRV has fallen below 1, indicating that holders are in an overall state of loss.

Institutional funds have shown a net outflow for two consecutive weeks, and investor interest continues to weaken, primarily due to market expectations that the Federal Reserve may maintain high interest rates for an extended period.

Futures Market

The futures funding rate is close to zero this week. Typically, a rate between 0.05% and 0.1% indicates that there is a lot of long leverage, which may suggest a short-term market top; whereas a rate between -0.1% and 0% indicates that there is a lot of short leverage, which may suggest a short-term market bottom.

This week, the Bitcoin futures open interest remains basically unchanged.

The futures long-short ratio is 1.7, indicating that market sentiment is still leaning towards greed. Generally speaking, this indicator is below 0.7 signifies panic, while above 2.0 indicates greed. However, it should be noted that the reference value is somewhat reduced due to significant data fluctuations.

spot market

The market has undergone the test of geopolitical risks, showing a fluctuating downward trend. 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 it is unlikely that the Federal Reserve will inject liquidity on a large scale in the short term, there are still growth drivers in certain areas of the market.

Market Data

total locked value of public chain

This week, the total TVL is approximately $93 billion, an increase of $6 billion from last week, with a growth rate of 6.9%. Except for the Bitcoin chain, the TVL of mainstream public chains has all increased. Ethereum and Base chains rose by 7%, TRON, Polygon, and Arbitrum chains each rose by about 5%, Solana chain rose nearly 11%, and a certain trading platform chain rose by 17%. It is noteworthy that the Merlin chain continues to be strong, increasing by another 22% this week, with a growth rate of over 2100% in the past month, and the total TVL has surpassed $1 billion. The Polygon chain and Optimism chain have fallen out of the top ten.

Locking situation of various chain protocols

The protocol lock-up amounts on various major public chains have changed to different extents, reflecting the activity levels of different ecosystems and user participation.

NFT market dynamics

The NFT-500 index shows that the market has warmed up. The floor prices of blue-chip projects have generally risen, and the market has shown a stable and slight recovery trend. BAYC is up 13%, MAYC is up 3%, Pandora is up 14%, Space Doodles has surged 26%, and both Azuki and LilPudgys are up 8%. However, both CryptoPunks and Defrogs have fallen by 8%.

In terms of trading volume, the overall market is still declining, but there has been a slight increase in the number of first-time and repeat buyers. Currently, there are no new blockbuster projects in the market, and the sluggish sentiment continues.