Crypto Assets Market Weekly Report

Market Performance of BTC and ETH

This week, the Crypto Assets market is showing an overall fluctuating trend. Bitcoin did not follow the rise of the US stock market and other risk markets, but instead experienced a decline. The main reason is that it fell when liquidity was weak last weekend, and coupled with the movement of BTC from a certain exchange address this week, it has raised market concerns about a potential final payout, leading to the downward trend.

Ethereum also followed the market decline this week, but the drop was smaller than Bitcoin, showing relatively strong performance. From the perspective of spot ETFs, funds are still flowing out, reflecting that investors currently have low interest in investing in Ethereum.

Key Events

1. The Federal Reserve's expectation of interest rate cuts in September

The market has fully priced in the Fed starting to cut interest rates in September, and the current focus of discussion is whether to cut by 25 basis points or 50 basis points. Based on the U.S. economic data released this week, the market believes that a 25 basis point cut is more likely, which is considered a conservative defensive rate cut.

2. US Macroeconomic Data

The economic indicators released this week, including the one-year inflation expectations, CPI data, and the number of initial jobless claims in the United States, show that the U.S. economy is performing better than market expectations and remains resilient. This has reduced the market's expectations for a 50 basis point rate cut by the Federal Reserve in September.

3. Geopolitical tensions

The situation in the Middle East has deteriorated again, with the Iranian Revolutionary Guard attacking a U.S. military base in Lebanon. Ukraine has intensified its attacks on Russia and launched an assault on the Zaporizhzhia nuclear power plant, exacerbating the uncertainty of the Russia-Ukraine war.

4. Movement of BTC address on a certain exchange

This Wednesday, a certain exchange address saw a movement of BTC worth 2 billion USD. The market believes this may be a sign that it is preparing for the final BTC payout, which triggered a market downturn. However, from another perspective, this also means that the risks that have been buried for many years are about to come to an end.

Altcoin Market Performance

This week, the market sentiment index rose to 13%. Although it has improved compared to last week, it still remains in the fear zone. The rebound in Altcoin sentiment is mainly because its performance this week has been stronger than BTC and ETH, resulting in a catch-up rally. However, due to the lack of market hotspots and intense long-short battles caused by external factors, the funds flowing into Altcoin are relatively low, making this catch-up rally difficult to sustain.

The top five tokens on the rise are distributed across different tracks such as L1s, NFTs, ETH-L2, DEX, and cross-chain, with a rebound strength greater than last week. The overall rebound strength of Meme coins is not as strong as that of other tracks.

The hottest topic on social media is the L1s track, with related projects generally rising this week, outperforming BTC and ETH, but lacking special events to drive this, possibly compensating for last week's insufficient rebound.

According to weekly return statistics, the SocialFi sector performed the best, while the AI sector performed the worst. The SocialFi sector is mainly driven by TON, benefiting from positive news about a mining project launched by a certain trading platform. Most tokens in the AI sector showed sluggish trends this week, indicating that market attention and capital flow have shifted.

Important Events Next Week

• August 20: OORT Summit; a certain trading platform suspends services for users in Washington state.
• August 21: Devcom & Gamescon event
• August 22: US initial jobless claims released; Coinfest Asia 2024; Terraform Labs bankruptcy case concludes, initial encryption loss claims commence.

Market Outlook

1. Bitcoin: The expectations of a U.S. economic recession have eased, and the interest rate cut expectation for September has been adjusted to 25 basis points. However, the increased global geopolitical instability is expected to continue causing wide fluctuations before the Federal Reserve cuts interest rates.

2. Ethereum: The continuous outflow of funds from the spot ETF indicates insufficient attractiveness of the current price. It is expected to maintain a high correlation with Bitcoin and experience wide fluctuations.

3. Altcoin: After this week's rebound, it is difficult to sustain the rise due to a lack of new capital inflow. It is expected that the rebound trend may end next week, and it will fluctuate in sync with the overall market.