Frontier Lab Crypto Market Weekly Report | W31

Frontier Lab

5 min readAug 2, 2024

BTC and ETH Weekly Overview

Market Performance

This week, the cryptocurrency market reverted to a downward trend:

Bitcoin (BTC): Bitcoin experienced significant declines this week, primarily due to the impact of Mt. Gox compensation distribution event.
Ethereum (ETH): The actual volatility of Ethereum is decreasing, indicating that the negative impact of the spot ETF “Sell News” is rapidly diminishing. This is favorable for long-term prices.

Key Events

Mt. Gox Compensation Event

Overview: Mt. Gox bankruptcy compensation process continues, with the balance of the holding address at 32,899 BTC as of this Friday.
Analysis: While BTC prices did not experience significant fluctuations at the start of the compensation plan, the increasing distribution volume and rapidly declining market purchasing power have begun to amplify the impact of Mt. Gox compensation event on BTC prices.

Federal Reserve FOMC Meeting

Overview: On Thursday, the Federal Reserve announced that the interest rate would remain at 5.25%. Following this, Jerome Powell hinted that “the Fed might cut rates in September.”
Analysis: The announcement that the Fed would keep rates unchanged in July met market expectations. Powell’s hint at a possible rate cut in September also aligned with market expectations. After the FOMC meeting, traders fully priced in the potential for a September rate cut, with expectations shifting from a 25 basis point cut to a 50 basis point cut. Consequently, the U.S. The stock market began to rise, and yields in the U.S. The bond market fell across the board.

Escalation of Geopolitical Conflict

Overview: On July 31st, Hamas’ top leader, Ismail Haniyeh, was killed in an airstrike in Tehran, Iran.
Analysis: This unexpected event could further escalate the already unstable situation in the Middle East, causing U.S. stocks to experience varying degrees of decline upon market opening and leading to short-term increases in crude oil and gold prices.

Altcoin Weekly Overview

Overall Performance

This week, market sentiment dropped to 12%, entering the “extreme fear” stage, a significant retreat from last week’s 42%. The primary reasons include various macro and policy uncertainties, the escalation of geopolitical conflicts, and the ongoing Mt. Gox compensation event.

After the Federal Reserve hinted at a rate cut in September, market liquidity shifted towards U.S. bonds and stocks. This led to insufficient liquidity in the crypto market and a decrease in purchasing power. These factors heavily impacted altcoins, with investors starting to avoid risk and adopting a wait-and-see approach.

Top Gainers Overview

The top five tokens by gains over the past week (excluding tokens with very low trading volume and meme coins) are as follows, based on data from CoinMarketCap

The top gainers list did not show a “sector concentration” feature, with tokens spread across various sectors. Gains were lower than last week, indicating a lack of “profit-making effect” for altcoins this week.

Meme Token Top Gainers

The meme token sector performed poorly this week, with the overall trend being downward. Only three tokens managed to show gains this week.

Social Media Highlights

Based on the top five daily growth data from LunarCrush and the top five AI scores from Scopechat, the statistics for this week (7/27–8/2) are as follows: The most frequently appearing theme is Layer 1s (L1s). The listed tokens are as follows (excluding tokens with very low trading volume and meme tokens):

Sector Tracking

Based on weekly return rates, the best-performing sector is SocialFi, while the worst-performing sector is Meme.

SocialFi Sector Performance: The SocialFi sector has performed well this week. This is due to the limited number of projects in this sector, with TON (The Open Network) holding the largest market share at 93.62%. Despite the overall market decline, TON has remained strong with a weekly increase of 2.41%. In a market with poor profit-making effects, users are focusing on smaller projects within SocialFi for potential higher returns. TON has achieved an impressive annual return of 458.84%, solidifying its position as the leader in the SocialFi sector. However, other SocialFi projects are experiencing a downward trend.
Meme Sector Performance: The Meme sector has underperformed this week. With the overall market decline, high risk aversion among investors has led to reduced market investment and a cautious stance. This has resulted in lower liquidity and larger declines in the Meme sector compared to others.

Upcoming Major Crypto Events

Tuesday (August 6):

Asia Blockchain Summit
FTX vs. U.S. Commodity Futures Trading Commission (CFTC) Settlement Hearing
Asia Blockchain Summit

Wednesday (August 7):

The U.S. The Democratic Party is expected to finalize its presidential candidate.

Saturday (August 10):

VeeCon 2024

Sunday (August 11):

FORESIGHT 2024 Hong Kong Summit

Outlook for Next Week

Bitcoin (BTC): The Mt. Gox compensation process continues, with 32,899 BTC remaining. The recent increase in macroeconomic uncertainty and the complete pricing of a potential Federal Reserve rate cut in September have caused market liquidity to flow back from crypto to U.S. equities and bonds. This results in insufficient market purchasing power, likely leading to Bitcoin experiencing broad fluctuations.
Ethereum (ETH): With the spot ETF approval, investors continue to “sell the news,” and Grayscale’s ETHE is still selling large quantities, with over 40,000 ETH being sold daily. This sustained selling pressure will likely keep Ethereum under significant short-term selling pressure.
Altcoins: Due to increased uncertainty surrounding various market events and poor overall market performance, investor sentiment is low, and investment in individual tokens has become more cautious. With no new hot sectors or events emerging, altcoins are expected to follow the general market trend and may not experience independent movements.