Frontier Lab Crypto Market Weekly Report | W34
BTC and ETH Weekly Overview
Market Performance
This week, the cryptocurrency market has shown a volatile trend:
- Bitcoin (BTC): This week, Bitcoin generally followed a volatile upward trend. Despite the movement of 13,264.69 BTC from the Mt. Gox address, which did not trigger market panic, Bitcoin still showed an upward trend. The main driver behind this was the dovish sentiment expressed in the Federal Reserve’s FOMC meeting minutes, indicating a potential rate cut in September. This bolstered market confidence in a rate cut, leading to a temporary rise on Wednesday. However, the market still lacks confidence in future expectations, causing prices to pull back slightly, resulting in an overall volatile upward trend.
- Ethereum (ETH): Ethereum also followed Bitcoin’s lead, showing a volatile upward trend, but its strength was weaker than Bitcoin’s. Additionally, trading volumes for Ethereum spot ETFs in the U.S. stock market showed outflows throughout the week. The Ethereum ecosystem has also lacked significant wealth creation effects. With the rise of Meme coins in the Tron ecosystem this week, funds within the crypto space have started to concentrate on Tron, while external investors remain skeptical and disinterested in Ethereum, leading to a particularly weak performance for Ethereum this week.
Key Events
Federal Reserve Releases July FOMC Meeting Minutes: The minutes from the Federal Reserve’s July FOMC meeting clearly stated that “the vast majority of Fed participants believe that if data continues to meet expectations, a rate cut in September may be appropriate.” This has led market participants to fully price in the possibility of a rate cut in September. Analyzing the previously released macroeconomic data, traders have priced at a 25 basis point rate cut in September, indirectly betting that the U.S. economy will not enter a recession in the short term.
U.S. Bureau of Labor Statistics Revises Employment Figures: On Wednesday, the U.S. Bureau of Labor Statistics revised the employment figures for the past year up to March, reporting a total of 818,000 jobs, marking the largest revision in 15 years. This indicates that the U.S. labor market is not as robust as previously reported, though it still falls short of the 1 million job revision projected by Goldman Sachs and others. While these figures might suggest a potential economic slowdown, market participants have not traded on recession fears. Instead, they believe that such low employment numbers will solidify the Fed’s resolve to cut rates in September.
Mtgox Address Continues to Move BTC: On Wednesday, the Mt. Gox address moved 13,264.69 BTC, which the market has interpreted as continued compensation to the victims of the original exchange collapse. However, this movement did not cause market panic. As the remaining BTC in Mt. Gox compensation address continues to decrease. It is expected that the impact of these movements on the market will also diminish.
Altcoin Market Overview
Overall Performance
This week, market sentiment has risen to 90%, a significant increase from last week’s 13%, moving from extreme fear to extreme greed. The Altcoin market continued its rebound from last week, outperforming both Bitcoin and Ethereum. The rebound in Altcoins was broad-based, with nearly all sectors experiencing gains.
However, trading volumes for these tokens were generally low, indicating that not much new capital has entered the market at this stage. As a result, this broad-based rally may not have the momentum to sustain itself. Especially given that market sentiment has reached 90%, history suggests that some pullback often occurs at these levels. Therefore, investors are advised to be cautious, recognize the risks in the near term, and prepare for defensive strategies.
Top Performers of the Week
Top 5 Gainers in the Market Over the Past Week (Excluding tokens with low trading volume and meme coins, data source: Coinmarketcap)
The leaderboard for this week’s gains did not exhibit a “sector concentration” characteristic, as the rising tokens were spread across various sectors, including DEX, POW, cross-chain, and stablecoin tracks. Although both RARE and DRIFT belong to the DEX sector, their reasons for rising differ: RARE saw gains due to Binance listing its perpetual contracts, while DRIFT’s rise was driven by its Polymarket-inspired launch of bets on the U.S. presidential election.
This also suggests that the current capital is not concentrated in a single sector but is instead being speculatively invested in projects with specific highlights or short-term positive news. However, this week’s gains were greater than last week’s, continuing the rebound trend from the previous week to some extent.
Meme Token Leaderboard
This week, the rebound in the Meme coin sector was generally weaker than last week. Although SUNDOG and SUN, which topped the leaderboard, saw significant gains due to Tron founder Justin Sun’s public endorsement of Meme coin projects on Tron, leading to a broad rise in Meme coins on the Tron network, Meme coins on other chains saw smaller gains. These gains were generally lower than those in other sectors, and it’s noticeable that Meme coins from other chains are rarely making it onto the leaderboard.
This trend indicates that the Meme coin frenzy is fading, with decreasing capital participation and increasing risk within the Meme coin sector at this stage.
Social Media Hotspots
According to the data from LunarCrush’s top five daily growth and Scopechat’s top five AI scores, here are the statistics for this week (August 17–23):
The most frequently mentioned theme was L1s, with the following tokens making the list (excluding tokens with low trading volume and Meme coins):
From the data, it’s clear that most L1s projects that received the highest social media attention this week were on an upward trend, with significant gains. The performance of L1s projects this week was generally stronger than the broader market.
However, since no major events occurred in the Crypto market this week, two possibilities could explain this trend: first, the continuation of last week’s rebound; second, the beginning of sector rotation within the Crypto market. The second scenario is less likely.
Topic Tracking
Based on weekly return rates, the AI sector performed the best, while the SocialFi sector performed the worst.
AI Sector: After several weeks of sluggish performance, the AI sector saw a rebound this week, with most tokens in the sector posting gains. However, it’s important to note that despite the upward trend, trading volumes remain low. Investors should approach AI sector projects with caution and primarily observe the market before making any decisions.
SocialFi Sector: The SocialFi sector’s dominant force remains TON, accounting for 95.21% of the sector’s market capitalization. Despite the positive impact of Binance’s Toncoin mining project launch last week, TON experienced a slight decline this week, making SocialFi the worst-performing sector. However, the overall positive returns in the SocialFi sector, despite TON’s decline, suggest that other projects within the sector performed well. The sector’s low overall returns are mainly due to TON’s pullback after last week’s positive news was fully priced in.
Next Week’s Crypto Events
- Tuesday, August 27: Exploring the Next Narrative; Global Meets Local in WebX
- Wednesday, August 28: Web3 Vision VCxIP Summit
- Friday, August 30: U.S. August Michigan Consumer Sentiment Index Final Reading; U.S. July Core PCE YoY
Outlook for Next Week
- Bitcoin (BTC): Despite the U.S. Bureau of Labor Statistics revising down employment figures by 818,000 jobs for the past year up to March, raising concerns about a potential U.S. economic recession, these concerns were offset by the Federal Reserve’s dovish tone in the July FOMC meeting minutes. As a result, the market has not begun trading on recession fears. However, traders remain cautious, hoping to minimize risk in the short term. Given this cautious stance, Bitcoin’s buying volume is not robust, and BTC is expected to continue trading within a broad range next week.
- Ethereum (ETH): This week saw continued outflows from Ethereum spot ETFs, and the Ethereum blockchain has lacked innovation and hot topics recently. The absence of significant wealth creation within the ecosystem has made it difficult for both internal and external investors to allocate funds to Ethereum. As a result, Ethereum is unlikely to break out independently and will likely continue to trade in tandem with Bitcoin, within a broad range, until the broader market rallies or new innovations emerge within the Ethereum ecosystem.
- Altcoins: Although Altcoins continued their rebound from last week, with positive indices across various sectors this week, the low trading volumes of leading tokens, despite their significant gains, are cause for concern. This suggests that the current rally may not be sustainable, and Altcoins could end their rebound next week, moving into a phase of broad market-linked volatility.
