Crypto market weekly review and outlook

BTC and ETH Performance This Week

This week, the overall crypto market is showing a volatile trend. Bitcoin failed to follow the rise of the US stock market and other risk markets, instead trending downwards. The main reason is the drop that occurred when market liquidity was weak over the weekend, coupled with the movement of BTC from a certain exchange address this week, leading the market to believe that it may be preparing for a final payout, triggering the downward trend. Ethereum followed the market down, but the decline was relatively small. From the perspective of spot ETFs, funds are still flowing out, indicating that investors have little interest in Ethereum.

Important Event Review

1. Federal Reserve's September Rate Cut Expectations: The market has fully priced in a rate cut starting in September, and the current discussion centers on whether to cut by 25 or 50 basis points. Based on economic data released this week, the market believes that a 25 basis point cut is more likely, which represents a conservative, defensive rate cut.

2. U.S. Economic Data: The 1-year inflation expectation released on Monday was 2.97%, lower than expected. The July CPI released on Wednesday was 2.9%, with the core CPI at 3.2%. The initial jobless claims released on Thursday were 227,000, below expectations. These data indicate that the U.S. economy is performing better than expected and remains resilient, reducing the expectation of a 50 basis point rate cut in September.

3. Geopolitical tensions: The Iranian Revolutionary Guard attacked three US military bases in Lebanon. The US deployed two aircraft carrier strike groups and a nuclear submarine to the Middle East, and the situation rapidly deteriorated. Ukraine intensified its strikes on Russia's Kursk region and attacked the Zaporizhzhia nuclear power plant, raising the risk of nuclear leakage and exacerbating the uncertainty of the Russia-Ukraine war.

4. Certain exchange address BTC movement: On Wednesday, a BTC movement worth $2 billion occurred at this address. The market believes this may be a test behavior in preparation for the final payout, triggering a market downturn. However, from another perspective, the risk buried for 10 years is about to end.

Altcoin Market Overview

This week, market sentiment has risen to 13%. Although this is an increase from last week's 9.2%, it still remains in the fear zone. The sentiment for altcoins has improved mainly because their performance this week has been stronger than BTC and ETH, showing a rebound compared to last week. However, due to the lack of market hotspots and external macro factors affecting the situation, the battle between bulls and bears is intense, and funds entering altcoins are relatively scarce, leading to weak sustainability for the rebound.

The top 5 tokens by increase in rank are distributed across L1s, NFTs, ETH-L2, DEX, and cross-chain tracks, with a rebound strength greater than last week. The overall rebound strength of meme coins is smaller than that of other tracks. L1 projects with high social media attention performed better than BTC and ETH this week, but lack special event support, which may 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 SocialFi sector is mainly contributed by TON, benefiting from a mining project launched by a certain trading platform. Most tokens in the AI sector have shown sluggish trends, indicating a decrease in market attention and capital inflow.

Important Events Next Week

• August 20: OORT Summit; a certain trading platform has suspended services for users in Washington State.
• August 21: Devcom & Gamescon
• August 22: U.S. initial jobless claims for the week released; Coinfest Asia 2024; Terraform Labs bankruptcy case concluded, initial encryption loss claims commence.

Market Outlook

1. BTC: The improvement in US economic data has adjusted the September interest rate cut expectation to 25 basis points. However, due to factors such as global geopolitical instability and differences in interest rate cuts, it is expected to continue to fluctuate widely before the Federal Reserve cuts interest rates.

2. ETH: Funds from the spot ETF continue to flow out, indicating insufficient price attractiveness. It is expected to maintain a strong correlation with BTC and undergo wide fluctuations.

3. Altcoin: After this week's rebound, due to the lack of continuous capital inflow, it is expected that the rebound may end next week, fluctuating in sync with the overall market.