Crypto Market Weekly Report: New Social Gameplay Emerges, ETH Ecosystem Performs Outstandingly

Market Overview

This week, the crypto market is showing an overall downward trend. The US dollar index is approaching a new high for the year, putting pressure on risk assets. The strength of the dollar is not only due to the ongoing inflation in the US and the delayed expectations of interest rate cuts, but also reflects market concerns about geopolitical risks. It is worth noting that despite this being an election year, the US stock market has remained relatively strong, while the crypto market appears to be relatively weak.

BTC has broken below the weekly support, and there has been significant selling pressure on multiple trading platforms recently. Meanwhile, the ETH/BTC exchange rate has strengthened, and altcoins are showing early signs of rebound. The main theme of the market rebound revolves around the ETH ecosystem.

It is worth noting that BLAST, as an ETH-based L2 project launched by the NFT platform BLUR, has recently attracted market attention. At the same time, KAS, as the first KRC-20 meme project on the POW public chain, is about to go live on the mainnet, drawing the attention of miners. In addition, LISTA, as a decentralized algorithmic stablecoin project on the BSC chain, has also launched new mining activities.

BTC Market Analysis

From the on-chain data, the market has entered a stage of exhaustion. Since June, the BTC price has fallen below the 3-month average holding cost. If this trapped structure continues, it may further deteriorate investor confidence and extend the market adjustment cycle. Historical data shows that similar major adjustments during a bull market occur on average five times.

The market capitalization growth rate of stablecoins has slowed down, reflecting a lack of new capital inflow into the market. Institutional funds have shown a net outflow for two consecutive weeks, but there has been an increase in inflow of altcoins. The long-term trend indicator MVRV-ZScore has fallen below the critical level of 1, indicating that holders are generally in a state of loss. The current indicator is 1.8, which is in the middle stage.

In the futures market, the funding rate has slightly decreased, and BTC open interest continues to decline. The long-short ratio is 2.4, indicating that retail investors have a high sentiment for bottom fishing, suggesting that the market may not have yet reached its bottom.

In the spot market, BTC has been in a sideways consolidation since hitting a historical high of $73,000 in March. The overall trading volume on centralized exchanges has decreased to levels seen at the end of last year, while the trading volume on decentralized exchanges remains stable. The ETH/BTC exchange rate continues to strengthen, and future market opportunities may be mainly concentrated in the ETH ecosystem.

Public Chain and DeFi Ecosystem

The total locked value (TVL) this week is $95.3 billion, down $5.6 billion from last week, a decrease of 5.6%. The TVL of mainstream public chains has almost all declined, with the ETH chain down 8%, the TRON chain down 6%, the BSC chain down 5%, the Arbitrum chain down 9%, the BASE chain down 4%, the BLAST chain down significantly by 27%, the Polygon chain down 5%, and the Optimism chain down 8%. Notably, the TON chain has risen 107% this month, becoming one of the few highlights.

The locked value of major protocols on various public chains has generally declined. In the Ethereum ecosystem, Lido, MakerDAO, and Aave still occupy the top three positions. On the BSC chain, Venus and PancakeSwap maintain their leading position. In the Polygon ecosystem, Aave and Quickswap perform relatively steadily. Major protocols on Layer 2 solutions such as Arbitrum, Optimism, and Base have also experienced varying degrees of decline in locked value.

NFT Market Dynamics

This week, the NFT market continues to show a downward trend, with the floor prices of blue-chip projects generally declining. 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 decreasing by about 20%. The number of first-time and repeat buyers is also showing a downward trend. Overall, the NFT market remains in a sluggish state, and the market environment is quite severe.

Nevertheless, the NFT sector is still constantly exploring new application scenarios and business models. The incorporation of social and gamification elements may bring new growth points to the NFT market. At the same time, with more traditional brands and institutions entering the NFT space, the market still has growth potential in the long term.