Crypto Market Weekly Report: Sentiment Low, Stablecoin Rise Indicates Capital Inflow

This week, the cryptocurrency market has shown a trend of fluctuating decline, with the market sentiment index dropping from 11% to 8%. The market capitalization of stablecoins has begun to rise rapidly, with USDT reaching $142.7 billion and USDC reaching $57.2 billion, up 0.49% and 2.32% respectively. This indicates that institutional funds are re-entering the market, with the most significant increase in US funds.

Despite recent economic data and statements from the Federal Reserve alleviating concerns about a U.S. economic recession, the market has begun to anticipate that the Federal Reserve will cut interest rates three times this year, possibly starting in May. However, this has not improved market sentiment. On the contrary, the frequent recent policy changes have led to significant fluctuations in Bitcoin prices, increasing market panic, and altcoins generally underperformed against the market.

Bullish Underlying

BTC

Recently, the BTC and the entire crypto industry have shown weak trends, mainly influenced by the following factors:

1. Macroeconomic level: Trump's tariff policy has raised concerns about inflation, the US GDP forecast has been downgraded, leading to short-term recession risks, the US-Ukraine mineral agreement has been shelved, and there is uncertainty regarding the Federal Reserve's future interest rate cuts.

2. BTC itself: It has hovered at high levels for the past two months, with long-term holders and large investors beginning to reduce their holdings. There is a lack of positive news and incremental capital support. The Bitcoin strategic reserve signed by Trump has not met expectations, leading to a significant price drop and triggering panic selling.

Bullish Reasons:

1. Macroeconomics: Economic data and statements from the Federal Reserve alleviate recession concerns, with the market expecting three interest rate cuts this year and possibly starting in May.

2. BTC itself: After a rapid decline, panic selling occurred, but on-chain data shows that most holders did not sell and began accumulating.

S

Although the S token ended its recent strong performance and followed the market down this week, the fundamentals of Sonic remain unchanged:

1. TVL still rises by 9.23%, and major on-chain DeFi projects have all achieved growth.

2. The APY of on-chain DeFi projects remains high, with the main liquidity pools having an APY of about 30% and an average lending rate of 14%.

3. On-chain daily revenue is $210,000, ranking 6th among all public chains, far surpassing other public chains with similar TVL.

4. The decline of S token mainly follows the market trend, and the project's fundamentals remain unchanged, so the bullish logic still exists.

AAVE

This week, AAVE rose against the trend by 21.38%, standing out among the top 50 tokens by market capitalization. TVL rose by 5.86%, ranking second in growth among the top 20 DeFi projects. Main reasons:

1. Optimize governance and token economic model, including buyback tokens, increase staking rewards, optimize liquidity, etc.

2. The White House supports the abolition of DeFi trading report rules, reducing compliance burdens and promoting innovation.

Although it is only a proposal, Aave's financial situation is good and supports innovation, and it is expected to be implemented. This move may trigger a buyback frenzy in the DeFi industry, injecting vitality into the current sluggish market.

BERA

Despite the drop after BERA ended its strong performance this week, the on-chain data and fundamentals of Berachain remain unchanged and continue to rise:

1. The growth rate of the TVL of leading ecological projects has slowed down, but the LSD project Infrared Finance and the DEX project BEX still grew by 31.15% and 25.22% respectively.

2. Infrared Finance stabilizes the WBERA APY at around 120%, and the BEX stablecoin pool APY is about 16%, attracting investors with high returns.

3. The borrowing rate for the lending project Dolomite reaches 48.08%, increasing the demand for BERA.

The decline of BERA is mainly influenced by the market environment, while the project itself remains unchanged, and the logic for a rise still exists.

Bearish Underlying

APE

1. APE mainly involves the NFT and GameFi sectors, but currently these sectors' market share is occupied by Memes, leading to reduced attention and users, and a lack of new funds.

2. On March 16th, 15.37 million APE will be unlocked, accounting for 1.54% of the total locked amount, mainly from early VCs, which may lead to significant selling pressure.

APT

1. Although Bitwise's application for a spot Aptos ETF brings certain expectations, Aptos is not included in the cryptocurrency reserve list mentioned earlier by Trump.

2. If the White House crypto summit announces reserve details, selected tokens may attract market attention, which is unfavorable for Aptos.

3. On March 12, 11.3 million APT will be unlocked, accounting for 1% of the total locked amount, all held by institutions, which may continue to sell and create selling pressure.

MERL

1. Merlin TVL dropped significantly by 12.44%, mainly due to DEX, Restaking, and cross-chain projects.

2. As BTC-L2, the ecosystem is limited, and the decline in TVL reflects a massive withdrawal of funds from major projects.

3. Recently, the development of BTC ecosystem projects has been unsatisfactory, and the decline of BTC has led to a withdrawal of staking.

4. The MERL fell only 1.8% this week. Considering the continuous outflow of on-chain funds, there may be a further decline.

TON

1. Toncoin TVL has decreased significantly by 10.68%, and almost all ecosystem projects' TVL have declined.

2. Since the popularity of Telegram's on-chain mini-games has declined since last year, the TVL has continued to show a downward trend.

3. SocialFi projects have long been on the fringes of the industry, lacking blockbuster products.

4. The popularity of on-chain mini-games is declining, and user earnings are lower than ordinary DeFi projects.

5. The sentiment in the encryption industry is low, TON has significantly dropped, and investors are generally pessimistic about the Toncoin ecosystem.

Market Hotspots

Aave

Aave performed outstandingly this week, with a TVL rise of 5.86%, ranking second among the top 20 DeFi projects. The price of AAVE increased by 21.38%, showing excellent performance among the top 50 tokens by market cap.

Hot reasons:

1. Optimize governance and token economic model:

   • Weekly repurchase of 1 million USD AAVE injected into the ecological reserve
   • Establish Umbrella mechanism and AFC, optimize fund management
   • Launch Anti-GHO token to enhance staking rewards
   • Terminate LEND migration contract and recover 65 million USD AAVE
   • Optimize secondary liquidity using a hybrid model

2. The White House supports the abolition of DeFi trading report rules, reducing compliance burdens, attracting capital and talent, and promoting innovation.

Future outlook:

1. Aave, as a benchmark in DeFi, its actions will influence the development direction of the industry.

2. The current market lacks innovation, and investors are more focused on actual returns, with high APY projects favored.

3. Aave chooses the DeFi dividend rise model, showcasing multiple advantages:

   • Sufficient cash reserves ( 1.15 billion USD )
   • Diversified income structure
   • High-quality asset rewards

4. May trigger a trend of DeFi projects shifting towards dividend or buyback models.

5. Aave's price-to-earnings ratio ( is 60.86 times, which is far higher than Maker's ) at 20.75 times. AAVE's current value for money is lower than MKR.

( Berachain

This week, Berachain's TVL rose by 17.21%, reaching $3.449 billion, ranking sixth among public chains. However, the price of BERA has retraced by 12.94%.

Hot reasons:

1. The LSD project Infrared Finance) rose by 31.15%### and the DEX project BEX( rose by 25.22%), driving the growth.

2. Infrared Finance WBERA APY stabilizes at around 120%, BEX stablecoin pool APY is about 16%, high yields attract investors.

3. The lending project Dolomite has a borrowing rate of up to 48.08%, increasing the demand for BERA.

Future Outlook:

1. Berachain attracts users with high APY, providing high returns in unstable market conditions.

2. The key to ecological growth lies in forming a positive cycle: staking and locking → releasing liquidity → empowering DeFi → token appreciation → user return → re-staking → gathering developers.

3. Continuous attention is required on the APY performance of on-chain DeFi projects, reflecting ecological vitality and development potential.

4. The staking rate of BERA on the Berachain chain is about 30%, with room for rise, which is beneficial for reducing the circulation.

Important Events Next Week

• March 12 ( Wednesday ): US February CPI year-on-year announcement
• March 13th ( Thursday ): Web3 Amsterdam 2025 event will be held.

Summary

This week the crypto market has fluctuated and declined, with low sentiment. Despite the inflow of funds into stablecoins and the stable performance of some hot projects, the overall market is still affected by macro policy uncertainty and insufficient investor confidence. In the future, projects like BTC, AAVE, and Berachain may become highlights, and investors need to pay attention to on-chain data, macro policies, and unlocking events to seize opportunities and avoid risks.