Crypto Market Weekly Report: US Monetary Policy Tightens, Alts Rise Against the Trend

Macroeconomic Environment

This week, macro liquidity has improved somewhat. The Federal Reserve is cautiously optimistic about the improvement in inflation. The US dollar index is nearing a new high for the year, supported by interest rates and geopolitical factors. The overall trend of the US stock market remains upward, recently attracting about $30 billion in new funds from around the world. In contrast, the performance of the crypto market has lagged significantly behind the stock market.

Market Overview

This week, Bitcoin has fluctuated and declined, while Ethereum remains relatively strong. The altcoin market has shown overall lackluster performance, with the European Cup events diverting some market attention. The market anticipates that the Ethereum ETF is expected to be approved in early July, making the Ethereum ecosystem the recent market focus.

The projects that performed well include:

1. LDO: As the leader in Ethereum staking, it benefits from favorable ETF news.

2. ZK: Ethereum Layer 2 solution, but the market performance is average. Ethereum on-chain Gas fees hit an 8-year low.

3. ZRO: A well-known cross-chain bridge project with a market value close to similar projects.

Bitcoin Trend Analysis

1. On-chain data

Despite the wide fluctuations in prices, Bitcoin investors overall remain profitable. However, market interest has declined, and both spot and derivatives trading volumes continue to shrink. This aligns with the pattern where Bitcoin requires a period to digest profit-taking pressure after reaching new highs.

The market value of stablecoins remains basically flat, with a recent slowdown in the trend of fund inflows. Institutional funds have seen a continuous net outflow, but Ethereum has experienced a countertrend inflow due to the expectation of ETF approval.

The MVRV-Z Score indicator is currently at 2.1, within the neutral range. This indicator is in the top range when it is greater than 6 and in the bottom range when it is less than 2.

2. Futures Market

This week's funding rate has slightly decreased. The futures open interest continues to decline. The long-short ratio is 2.3, indicating that retail investors are quite optimistic about bottom-fishing, and the market may still not have reached its bottom.

3. Spot Market

Bitcoin and Solana are both showing a weekly adjustment trend, expected to last until early August. Ethereum, TON, and the Base ecosystem are performing strongly, mainly supported by favorable factors such as ETFs, new exchanges, and new wallets. The Ethereum ecosystem is expected to become the market focus in the coming month.

Public Chain Ecosystem Development

This week's total locked value ( TVL ) is 100.9 billion USD, a decrease of 9.6% from last week. The TVL of mainstream public chains has almost universally declined, with only the TON chain rising against the trend by 15%, and a cumulative increase of 108% this month. The market has overall entered an adjustment phase, and in the short term, the TON and Solana ecosystems are worth关注.

NFT market

This week, the floor prices of blue-chip projects in the NFT market generally saw a significant decline, with well-known projects like CryptoPunks and BAYC dropping by more than 10%. The overall trading volume in the market has slightly decreased, and the number of first-time and repeat buyers is also gradually declining. Overall, the NFT market remains in a sluggish state, with a challenging market environment.

Summary

This week, the overall performance of the crypto market has been sluggish, with Bitcoin continuing to adjust while alts rise against the trend. The Ethereum ecosystem has become the market focus due to ETF expectations. The NFT market remains weak. In the short term, attention should be paid to the direction of the US monetary policy and its impact on the market.