Crypto Market Weekly Report: BTC and ETH fluctuate downward, Altcoins see a rebound

Performance of BTC and ETH Markets

This week, the crypto market overall showed a volatile trend:

• Bitcoin failed to follow the rise of U.S. stocks and other risk markets, instead experiencing a decline. The main reasons are the drop that occurred over the weekend when market liquidity was weak, and the movement of BTC from a certain exchange address this week, which triggered market speculation about a possible final payout, leading to the downward trend.

• Ethereum follows the market and shows a downward trend, with no independent market performance, but the decline is relatively smaller than that of BTC. From the perspective of the spot ETF, funds are still flowing out, indicating that most investors currently have little interest in investing in Ethereum.

Important Events

1. Federal Reserve's interest rate cut expectations in September

The market has fully priced in the Federal Reserve starting to cut interest rates in September, with the current focus of discussion being 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 the probability of a 25 basis point cut is higher, which is considered a conservative defensive rate cut.

2. US Economic Data

Several economic data from the United States released this week exceeded expectations, including inflation expectations, CPI data, and initial claims for unemployment benefits. This indicates that the U.S. economy remains resilient, not as bad as the market had anticipated, reducing expectations for a significant rate cut by the Federal Reserve in September.

3. Geopolitical Situation

New uncertainties have emerged in the Middle East situation. This week, the Iranian Revolutionary Guard attacked a U.S. military base in Lebanon, and the United States subsequently dispatched military forces to the Middle East. Additionally, Ukraine's attacks on Russia have also escalated, even affecting the safety of nuclear power plants, further increasing the uncertainty of the Russia-Ukraine war.

4. Movement of BTC address on a certain exchange

This Wednesday, a transaction involving the movement of BTC worth $2 billion occurred at a certain exchange address. The market generally believes this could be a test action by the exchange in preparation for its final payouts, leading to a market downturn. However, from another perspective, this also signifies that a related risk lasting for 10 years is about to come to an end.

Altcoin Market Overview

This week's market sentiment index rose to 13%. Although it has improved compared to last week, it remains in the fear zone. The sentiment for altcoins has rebounded mainly because their performance this week was stronger than that of BTC and ETH, representing a catch-up to last week's rebound.

However, due to the overall lack of hotspots in the crypto market and the impact of external macro factors, the competition between bulls and bears is intense, resulting in less capital flowing into Altcoins; therefore, this rebound may lack sustainability.

Popular Sectors and Tokens

This week's top-performing tokens are scattered across multiple sectors including L1s, NFTs, ETH-L2, DEX, and cross-chain, with a rebound strength greater than last week, indicating that multiple projects are starting to catch up.

In terms of social media attention, L1 projects have received considerable focus, and most are on an upward trend, performing better than BTC and ETH. This could be a补涨 for last week's insufficient rebound.

According to weekly return rate statistics, the SocialFi sector performed the best, while the AI sector performed the worst. The main player in the SocialFi sector, TON, surged due to the launch of a mining project on a certain trading platform, driving the entire sector's outstanding performance. In contrast, the AI sector has remained sluggish, indicating a shift in market attention and capital flow.

Outlook for Next Week

1. Bitcoin: It is expected to continue to fluctuate widely before the Federal Reserve cuts interest rates. Improvement in U.S. economic data has alleviated recession expectations, but geopolitical instability and differences in future interest rate cuts still exist.

2. Ethereum: The continuous outflow of funds from spot ETFs indicates a lack of attractiveness, and it is expected to maintain a strong correlation with Bitcoin, resulting in wide fluctuations.

3. Altcoin: Although there was a rebound this week, the lack of new capital inflow has resulted in insufficient momentum for continued growth. It is expected that the rebound may end next week, oscillating in sync with the overall market.

Important events to watch for next week include the OORT Summit, adjustments in services by a certain trading platform, Devcom & Gamescon, the release of initial unemployment claims data in the United States, and progress in bankruptcy cases related to a certain project.