Crypto Market Weekly Overview: Liquidity Improvement but Alts Show Weak Performance

Macroeconomic Environment

The Federal Reserve expects inflation to further ease, and the US dollar index is nearing a new high for the year. Global funds continue to flow into the US stock market, with approximately $30 billion in new funds entering over the past month. In contrast, the crypto market has significantly lagged behind the US stock market.

Market Trends

Bitcoin has fluctuated and declined this week, while the Ethereum to Bitcoin exchange rate has strengthened. The overall performance of alts is sluggish, and the European Cup events have distracted market attention. The Ethereum ETF is expected to be approved in early July, and the market rebound mainly revolves around the Ethereum ecosystem.

As the leader in Ethereum staking, LDO is expected to further expand its re-staking business in the future. Ethereum has been recognized by the US SEC as not being a security, which is beneficial for the subsequent ETF staking business.

ZK is Ethereum's ZK Layer 2 solution, and its market performance is average. The Gas fees on the Ethereum chain have reached an 8-year low.

ZRO is a well-known cross-chain bridge project, with a relatively conservative airdrop, and its market value is close to that of similar project W.

Bitcoin Market Analysis

on-chain data

The market as a whole is showing a trend of reduced volume consolidation. Despite the wide fluctuations in price, Bitcoin investors remain profitable. However, investor interest has decreased, with the spot and derivatives markets and on-chain trading volume continuing to shrink. Typically, after Bitcoin reaches a new high, the market needs sufficient time to digest the selling pressure.

The market value of stablecoins is basically flat, and the recent trend of capital inflow has slowed down. Institutional funds have seen continuous net outflows, but Ethereum has experienced a significant net inflow against the trend due to the upcoming launch of a spot ETF.

The MVRV-Z Score indicator is 2.1, entering the middle stage. This indicator is in the top range when greater than 6 and in the bottom range when less than 2.

futures market

The funding rate has slightly decreased this week. A rate in the range of 0.05-0.1% indicates that there is more long leverage, suggesting the market may be at a short-term top; a rate in the range of -0.1-0% indicates that there is more short leverage, suggesting the market may be at a short-term bottom.

The open interest in Bitcoin futures continued to decline this week. The long-short ratio for futures is 2.3, indicating that retail investors have a strong buying sentiment, and the market is likely not to have bottomed out yet. Retail sentiment is usually seen as a contrarian indicator; below 0.7 indicates panic, while above 2.0 indicates greed.

spot market

Both Bitcoin and Solana are showing weekly adjustments, which are expected to last until early August. Ethereum, TON, and the Base ecosystem are performing strongly. The Ethereum ETF is expected to be approved in early July, TON is about to be listed on a major exchange, and Base is introducing a new wallet to attract traffic. The Ethereum ecosystem is likely to become the main focus of the market in the next month.

Public Chain Locked Amount

This week's total locked value ( TVL ) is 100.9 billion USD, a decrease of 10.7 billion USD from last week, a drop of 9.6%. The TVL of mainstream public chains generally fell, with only the MERLIN chain rising by 3%. The TRON chain fell by 3%, the BSC chain fell by 5%, the SOLANA chain fell by 4%, the BASE chain fell by 2%, both the Bitcoin chain and the Polygon chain fell by 4%, the OP chain fell by 5%, and the AVALANCHE chain fell by 12%.

It is worth noting that the TON chain has risen 15% this week and has accumulated a rise of 108% this month. The market is currently entering an adjustment phase, and the short-term performance of TON and the SOLANA ecosystem is worth paying attention to.

NFT Market

This week, the floor prices of blue-chip projects in the NFT market have generally fallen sharply. CryptoPunks fell by 13%, BAYC fell by 17%, Pudgy Penguins fell by 28%, Space Doodles fell by 35%, Azuki fell by 23%, The Captainz fell by 16%, MAYC fell by 22%, and LilPudgys fell by 29%. Only Milady rose against the trend by 4%.

The overall trading volume of the NFT market has slightly declined, with blue-chip project trading volumes generally dropping by about 20% over the past week. The number of first-time and repeat buyers is also gradually decreasing. Overall, the NFT market remains extremely sluggish, with a harsh market environment.