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Crypto market pullback faces new challenges after Bitcoin Halving
Crypto Market Weekly Report: Regulatory Developments Emerge Frequently, Emerging Stablecoins Attract Follow
Market Overview
This week, the crypto market continues to adjust. The U.S. economy remains strong, with persistent inflation, and the market expects the Federal Reserve's first rate cut to be delayed until September, with an annual reduction of no more than two times. Against this backdrop, long-term government bond yields may rise further to suppress demand until inflation consistently falls back to the target level of 2%. As a result, U.S. stocks have experienced a significant pullback, and the crypto asset market has followed suit.
Main Asset Performance
Bitcoin has shown a weak downward trend this week, with mainstream value coins generally declining. The market focus is concentrated on the Meme coin sector, which experiences less upward resistance and lacks significant VC selling pressure.
Several directions worth following:
The platform coin of a certain trading platform has broken through the monthly line against BTC. The platform's founder is about to face a US judicial ruling, and if the ruling is lenient, the platform coin may experience a significant rebound.
A trading platform will launch the ETH re-staking project RENZO, which belongs to the same track as ETHFI with a market value of $4 billion. Notably, the launch date for RENZO is April 30, while the airdrop claim date for retail investors is May 2.
The overall expectation for the BTC Rune ecosystem is relatively low. Rune stones airdropped DOG runes to holders, with a market value reaching 350 million USD at one point, and a large trading volume in the short term.
On-chain data of Bitcoin
The fourth Bitcoin halving has occurred, 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 funds flowing in, while interest rates are at a 20-year high, and approximately 94% of Bitcoin has been mined.
The market capitalization of stablecoins has increased by 2%, and the long-term funding fundamentals remain positive. The current MVRV-Z Score indicator is at 2.3, in a neutral range, indicating that the overall profitability of the market is tending towards balance. Institutional funds have shown a net outflow for two consecutive weeks, and investor interest has weakened, mainly influenced by 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, indicating a balance between long and short forces. The BTC futures open interest remains basically stable. The long-short ratio for futures is 1.7, still in the greedy zone, but the reference significance is limited.
Spot Market
The market has experienced a volatile downward trend after facing geopolitical risk tests. The BTC contract rate briefly turned negative, reflecting an overly pessimistic market sentiment. In the long term, although the Federal Reserve is unlikely to inject liquidity on a large scale in the short term, the overall market is still on a bullish trajectory, with growth momentum remaining in certain sub-sectors.
Public Chain Ecosystem
This week, the total TVL grew to around $93 billion, an increase of approximately 6.9%. Excluding the Bitcoin chain, the TVL of major public chains generally rose. Ethereum and Base chains increased by 7%, while TRON, Polygon, and Arbitrum chains all rose by about 5%. The Solana chain saw an increase of nearly 11%, and the BSC chain rose by 17%. Notably, the Merlin chain continues to experience 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's blue-chip projects mainly saw price increases above the floor price, with the overall 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, the NFT market transaction volume is still declining, with a slight increase in the number of first-time and repeat buyers. The market currently lacks blockbuster projects, and the sluggish sentiment continues.