Crypto Assets Market Weekly Report: Signs of Exhaustion Emerge, ETH Series May Become the Rebound Main Line

Macroeconomic Environment and Market Overview

The current macro liquidity environment is showing signs of deterioration. The US Dollar Index is approaching a new high for the year, placing significant pressure on risk assets. The strength of the dollar is not only due to the resilience of US inflation and the potentially delayed rate cut timetable but also reflects a reassessment of geopolitical risks by the market. Notably, in this election year, the US stock market has performed well. In contrast, the crypto market appears to be more fragile.

This week, Bitcoin has fallen below an important technical support level, with significant selling pressure on major exchanges. The exchange rate of Ethereum against Bitcoin has strengthened, and altcoins have led the way in the rebound. The mainline of the market rebound revolves around the Ethereum ecosystem.

Hot Project Analysis

1. BLAST: An Ethereum Layer 2 solution launched by the NFT platform BLUR, recently completed an airdrop but has not yet been listed on mainstream exchanges. BLAST pioneered the currently popular points airdrop model, backed by the operations of the Paradigm fund. However, the Layer 2 narrative is gradually losing market attention.

2. KAS: This is a PoW public chain project that plans to launch its first KRC-20 meme coin by the end of June. Recently, large miners from the United States have started participating in KAS mining.

3. LISTA: As a decentralized algorithmic stablecoin project on the BSC chain, there is almost no venture capital involvement. Recently, the project has launched new mining activities.

Bitcoin Market Analysis

On-chain data shows that the market has entered a stage of exhaustion. Since June, the price of Bitcoin has fallen below the 3-month average holding cost. Historical experience indicates that if this trapped structure persists, it may lead to a deterioration of investor confidence, making the adjustment deeper and more prolonged. In past bull markets, similar significant adjustments have averaged five occurrences.

The growth of stablecoin market capitalization supply has slowed, indicating a lack of new capital inflow in the market. Institutional funds have shown a net outflow for two consecutive weeks, but altcoins are beginning to attract more capital inflow.

The long-term trend indicator MVRV-Z Score has fallen below the key level of 1, indicating that holders are overall in a state of loss. Currently, this indicator is at 1.8, which is in the middle stage.

Overview of the Futures Market

The futures funding rate has decreased slightly this week. A rate between 0.05% and 0.1% indicates a higher long leverage, which may suggest a short-term market top; a rate between -0.1% and 0% indicates a higher short leverage, which may suggest a short-term market bottom.

The Bitcoin futures open interest continued to decline this week. The futures long-short ratio is 2.4, indicating that retail investors are highly optimistic about the bottom, and the market may not have hit the bottom yet. Retail sentiment is usually seen as a contrarian indicator; a long-short ratio below 0.7 indicates market panic, while a ratio above 2.0 indicates market greed.

Spot Market Dynamics

Bitcoin has fallen below a key technical support level, and the market has been in a sideways consolidation since it hit an all-time high of $73,000 in March. The overall trading volume on centralized exchanges (CEX) has dropped to levels seen at the end of 2023, but the on-chain trading volume on decentralized exchanges (DEX) remains stable. The Ethereum/Bitcoin exchange rate continues to strengthen, and future major investment opportunities may revolve around the Ethereum ecosystem.

Public Chain and DeFi Market

This week's total locked value (TVL) is $95.3 billion, a decrease of $5.6 billion from last week, representing a drop of 5.6%. The TVL of major public chains has almost universally declined, with Ethereum down 8%, TRON down 6%, BSC down 5%, Arbitrum down 9%, Base down 4%, Blast plummeting 27%, Polygon down 5%, and Optimism down 8%. Notably, the TON chain's TVL has risen 107% this month.

Overview of the NFT Market

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

The overall trading volume of the NFT market has slightly declined, with the trading volume of blue-chip projects 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 in a sluggish state, and the market environment is extremely severe.