Crypto Market Weekly Report: Frequent Regulatory Developments, Emergence of New Stablecoins

Market Overview

macro environment

The U.S. economic growth continues to exceed expectations, and inflation remains sticky. The market expects that the Federal Reserve's first interest rate cut may be delayed until September, with no more than two cuts expected for the entire year. Before inflation clearly falls back to the 2% target, long-term Treasury yields may continue to rise to curb economic demand. Recently, U.S. stocks have shown significant adjustments, and the crypto market has fluctuated accordingly.

market performance

This week, Bitcoin showed a weak downward trend, with mainstream coins generally declining. The market's focus is concentrated on the Meme sector, which lacks substantial venture capital sell pressure, resulting in relatively small upward resistance. It is worth noting that the verdict involving the former CEO of a certain trading platform continues to attract market attention; if the final judgment is relatively lenient, it may trigger a significant increase in the platform's native coin.

In addition, the ETH re-staking project RENZO, which is about to launch on a certain trading platform, has also attracted attention. This project is in the same track as ETHFI, which has a market value of $4 billion, and is set to launch before the airdrop, presenting potential arbitrage opportunities.

In the Bitcoin ecosystem, the rune token DOG has sparked heated discussions due to its airdrop activity, 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 new annualized inflation rate dropping to 0.85%, lower than gold's 2.3%. The uniqueness of this halving lies in the simultaneous influx of a large amount of spot ETF funds, a high-interest-rate environment, and nearly 95% of Bitcoin already mined.

The market capitalization of stablecoins has increased slightly by 2%, indicating that the long-term funding situation remains favorable. The current MVRV-Z Score is 2.3, which is in the middle stage, reflecting a balanced overall profit status in the market.

Institutional funds have shown a net outflow for two consecutive weeks, reflecting investors' concerns about the Federal Reserve potentially maintaining high interest rates for an extended period.

futures market

The funding rate for futures is close to zero, indicating a relative balance between long and short forces. Bitcoin futures open interest has remained basically flat this week. The long-short ratio for futures is 1.7, still in a slightly greedy range, but its reference significance is limited.

spot market

The market has shown a volatile downward trend after experiencing the test of geopolitical risks. Although the likelihood of the Federal Reserve injecting large amounts of liquidity in the short term is low, in the long term, the market is still on a bullish trajectory, and some sub-sectors still have growth momentum.

Public Chain Ecosystem

The total locked value ( TVL ) increased by 6.9% this week to around $93 billion. Excluding the Bitcoin chain, the TVL of mainstream public chains generally rose. Ethereum and Base chains rose by 7%, TRON, Polygon, and Arbitrum chains saw an increase of about 5%, Solana chain rose nearly 11%, and BSC chain increased by 17%. Notably, the Merlin chain continues its strong growth at 22%, with an increase of over 2100% in the past month, and the total TVL has surpassed $1 billion.

NFT market

The NFT market has shown signs of moderate recovery this week. Most blue-chip projects saw an increase in their floor prices, with BAYC rising by 13% and Azuki by 8%. However, the overall trading volume in the market continues to decline, with no new blockbuster projects emerging yet. The number of first-time and repeat buyers has slightly increased, but the overall sentiment in the market remains sluggish.