Frontier Lab Crypto Market Weekly Report | W29

Overview of BTC and ETH This Week

Market Performance

The crypto market has been in a rebound trend this week, with a noticeable sector rotation effect.

Key Events

Mt. Gox Payout Event

• Overview: Mt. Gox bankruptcy compensation has begun, with over 50,000 BTC already paid out, leaving 90,344 BTC remaining in their addresses.
• Analysis: With the start of the payout plan, BTC prices did not show significant fluctuations and remained on an upward trend over the past week. This indicates that the negative expectations of Mt. Gox payout has already been “priced in” by the market, and the impact of this event on the market is gradually diminishing.

Trump Assassination Attempt

• Overview: On July 14, 2024, Donald Trump was attacked by a gunman during a speech.
• Analysis: Trump is known for his favorable attitude towards the cryptocurrency industry, and his campaign manifesto includes policies aimed at devaluing the dollar to promote exports. As such, the market believes that if he were to win the election, the Federal Reserve would significantly increase market liquidity, boosting the crypto market. The assassination attempt has increased his chances of winning the election, thereby driving the market upward.

Approval of ETH Spot ETF Expected Next Week

• Overview: The market has adjusted the expected approval date for the ETH spot ETF to July 23.
• Analysis: This week, the ETH/BTC exchange rate has risen as investors are betting on the approval of the ETH spot ETF next week. If approved, it is likely that a phenomenon similar to the BTC spot ETF approval, which led to sustained inflows, will occur, affecting ETH prices. This is a key point to watch next week.

Federal Reserve Expected to Cut Rates in September

• Overview: The market is fully priced with the expectation that the Federal Reserve will initiate the first rate cut in September.
• Analysis: This week, Federal Reserve Chairman Jerome Powell, Governor Christopher Waller, and voting members John Williams and Austan Goolsbee made statements suggesting an imminent rate cut. As a result, traders have increased the probability of a September rate cut to 100% and predict at least two rate cuts this year, boosting risk assets.

Rotation in the U.S. Stock Market

• Overview: The seven major tech stocks have shown varying degrees of pullback, but the three major indices overall have risen, with small-cap stocks taking over the market’s upward momentum.
• Analysis: The U.S. stock market’s rise has shown sector rotation, no longer dominated by high-tech blue-chip stocks. This indicates that the current bull market in the U.S. stocks are likely entering its latter half.

Overview of Altcoins This Week

Overall Performance

Market sentiment remained optimistic this week, rising significantly from last week’s 20%. Negative factors are gradually dissipating, and with the Federal Reserve expected to cut interest rates and various factors related to the U.S. election, investors are gradually regaining confidence in the market.

Despite the significant rebound in the Altcoin sentiment index, Altcoin prices are still below the levels seen before the German government sell-off. When the Altcoin sentiment index reaches 90%, it often triggers a price pullback. Therefore, we should remain cautious in the coming weeks and avoid blindly chasing high prices.

Top Gainers Overview

Top 5 Tokens with the Highest Gains Over the Past Week

(Data excludes tokens with low trading volume and meme coins, source: CoinMarketCap)

The top gainers list did not exhibit “sector concentration” characteristics, with the rising tokens spread across various sectors. Additionally, the gains were higher than last week, indicating a strong bullish sentiment for Altcoins this week.

Meme Token Top Gainers

Data Source: CoinMarketCap.com

This week, the market has shown an upward trend, and the Meme sector has regained market attention with outstanding performance. The gains this week have significantly increased compared to last week.

Social Media Hot Topics

Based on the top five daily growth metrics from LunarCrush and the top five AI scores from Scopechat for the week (July 13 — July 19), the most frequently mentioned topic is Layer 1 (L1) tokens. The tokens listed are as follows (excluding tokens with low trading volume and meme coins):

Data Source: LunarCrush and Scopechat

Topic Tracking

Sector

Data Source: SoSo Value

From the table above, it is evident that the best-performing sector by weekly return is payment, while the worst-performing is SocialFi.

In the Payment sector, XRP has the largest share at 63.53%. This week, XRP surged by 26.61% due to market speculation about a potential settlement with the SEC following a closed-door meeting. This drove the entire payment sector up. Other significant players in the Payment sector, such as BCH, LTC, and XLM, also saw positive growth due to the overall market recovery, making the Payment sector the standout performer among all sectors.

In the SocialFi sector, TON holds a 93.41% share. However, TON dropped by 2.01% this week, leading to SocialFi being the only sector to experience a decline.

Next Week’s Major Crypto Events

• Wednesday (July 24): Bank of Canada interest rate decision
• Thursday (July 25): Bitcoin 2024 event in Nashville, USA, with guests including Donald Trump, Robert F. Kennedy Jr., Michael Saylor, and Edward Snowden
• Friday (July 26): U.S. Core PCE Price Index for June; U.S. July Michigan Consumer Sentiment Index final; EDCON 2024; Solana Hacker House in Bangalore

Outlook for Next Week

1. Bitcoin: The Mt. Gox payouts have begun, with 50,000 BTC already paid out and 90,344 BTC remaining. The German government’s sell-off has been completed. The key points to watch are whether there will be any significant selling pressure after the Mt. Gox payouts and the performance of U.S. stocks. Bitcoin is likely to maintain a consolidation trend next week.
2. Ethereum: The approval of the Ethereum spot ETF has been delayed to July 23. It is expected to pass on that date, so attention should be on whether Grayscale’s ETH will see significant selling like BTC after its spot ETF approval.
3. Altcoins: With major negative factors in the market diminishing, investors are approaching a state of greed. Although Altcoins have shown significant rebounds this week, they are still below pre-decline levels. A broad range of oscillation and rebound is likely to remain the main market trend.