Cryptocurrency daily summary:
Analysts believe BTC will continue to perform negatively until June
Runes Protocol transaction activity drops significantly
Layer 3 will release token airdrops
Let’s first look at the trading activities of Bitcoin ETFs. According to Farside Investor data, on May 10 (last Friday), Grayscale Bitcoin Spot ETF (GBTC) continued to outflow $103 million; at the same time, Fidelity Bitcoin Spot ETF (FBTC) inflowed $5.3 million, iShares Trust Bitcoin Spot ETF (BITB) inflowed $12.4 million, and WisdomTree Bitcoin Spot ETF (BTCW) had a net inflow of $600,000.
In recent weeks, the cryptocurrency market has entered a state of digital asset consolidation, which is a test of investor confidence. Charles Edwards, founder of cryptocurrency hedge fund Capriole Investment, said in a release on Thursday that Bitcoin is currently in the "Bore you to Death" Phase and expects that this state may last for 1-6 months.
Earlier, the price of Bitcoin plunged nearly 5% from $63,000 to just over $60,000 amid gloomy inflation data expectations and hawkish comments from Federal Reserve policymakers. Blockchain activity data also showed low participation and a sharp drop in transactions on the Bitcoin network, while Ethereum saw inflation.
The current market performance is similar to the period from April to September 2023, when Bitcoin prices hovered in the $25,000 to $30,000 range for six months, which was a scorching market. However, in the end, the cryptocurrency market experienced a multi-month rise, and Bitcoin finally hit a new all-time high in March this year.
Edwards explained that in this market phase, Bitcoin prices will fluctuate in a low volatility range until market participants lose patience. He added that market sentiment is likely to remain depressed until the consolidation ends. The lack of confidence in the market could be a strong signal that a bottom is near.
The Runes protocol ecosystem does not look optimistic either; the Runes protocol is a solution that can implement different token standards on the Bitcoin blockchain. It uses Bitcoin's UTXO model and OP_RETURN opcode to provide a more efficient Bitcoin tokenization solution than the BRC20 standard, becoming the first choice for many memecoin transaction activities on Bitcoin and recently processing its 1 billionth transaction.
But the Runes protocol has been in decline for the past two weeks; since the Runes protocol was launched on April 19, it has been active on the blockchain for three weeks, just in time for Bitcoin's latest halving event. At that time, Runes attracted many excited investors to use it, and Bitcoin miners created extremely high transaction fees. In the first week, the Runes protocol generated more than $135 million in Bitcoin transaction fees.
However, according to the Dune analytics dashboard compiled by Runes Is, there has been a general slowdown in transaction activity since its peak. On May 10, the Runes Protocol reached its lowest level of activity, with the lowest number of new coins minted and new wallets interacting with the protocol since its launch.
According to data from The Block, the fees generated by the Runes protocol have been steadily declining, with total fees exceeding $1 million only twice in the past two weeks, indicating a decline in transaction and etching activity.
The Layer3 Foundation, a distribution and identity protocol, announced on the X platform that it will launch the L3 token in early summer this year, with a total of 300 million tokens, of which the community allocation accounts for 51% of the total supply. Detailed token economics will be released in June. Token holders will be able to participate in governance and obtain the benefits of products built on the protocol through staking.
According to Layer3, “the initial airdrop will distribute 5% of L3’s total supply to early adopters and CUBE minters.” The company also stated in the post that “there will be multiple airdrops, with more details to come.”
The protocol aims to decentralize Layer3’s $1 trillion “attention market.” According to Layer3, it has facilitated 96 million interactions across more than 500 ecosystems.
“The opportunity to enable crypto attention and identity infrastructure is enormous,” Layer3 said. The company aims to “provide identity and monetization infrastructure for human and AI agents as millions of ecosystems adopt token-based distribution models.”
Market analysis: The market fluctuates, PEPE has four consecutive positive weekly lines
Market trend:
$BTC The market is still in a volatile state, BTC spot ETF continues to flow out, and the market lacks sustained hot spots. Currently, nearly 80% of the mainstream mining machines on the market are near the shutdown price. In terms of macroeconomics, US stocks rose, and the market is waiting for the CPI data on May 15.
Market hot spots:
1. Meme concept leader$PEPE The price continues to rise, and the weekly line has achieved 4 consecutive positives. The whales on the chain continue to buy PEPE.
2、$GMX The surge came after GMX announced its migration to the Solana public chain. This week, the overall transaction volume of the Solana chain DEX exceeded the sum of the five chains including Ethereum, BSC, Arbitrum, Optimism, and Base.
3. The tokens of the leader in the re-staking track, Eigenlayer, are available now. The OTC futures price predicts a market value of $12 billion and is likely to start trading at the end of September. In addition, Puffer Finance announced that staking EIGEN on its platform will earn Puffer points.
4. Bouncebit token BB will be launched on Gate.io at 18:00 today. BB is a BTC re-staking protocol, and plans to make a stablecoin similar to Ethna in the future. Bouncebit's current TVL is $1 billion, and a total of 2.1 billion BBs have been issued. The market predicts that its valuation is around $2 billion. Just three months ago, Bouncebit's VC round of financing was valued at $60 million.
The cryptocurrency market is currently in a stage of shock adjustment, and investors should remain cautious, especially when dealing with highly volatile assets. Investors are advised to pay close attention to market trends, especially the performance of Meme coins. At the same time, users should strengthen risk management, adjust investment strategies in a timely manner, and make corresponding decisions based on market changes.
Macro: Wall Street ends higher ahead of inflation data; Asian stocks climb to 15-month high
Wall Street closed higher on Friday as earnings expectations were optimistic; U.S. stocks rose slightly on May 10, with all three major indexes posting weekly gains as investors analyzed comments from Federal Reserve officials and looked forward to important inflation data next week. The S&P 500 and Dow Jones Industrial Average rose slightly, while the Nasdaq was basically flat. The blue-chip Dow posted its biggest weekly gain since mid-December this week.
In terms of the three major indices, the Dow Jones Industrial Average rose 0.32%, the S&P 500 rose 0.16%, and the Nasdaq fell 0.03%. As the first quarter earnings season is coming to an end, according to LSEG data, 77% of the 459 companies in the S&P 500 that have announced results have performed better than market expectations.
Analysts expect the key CPI report will likely show core prices rising to 3.6% year-on-year. Separately, the University of Michigan's preliminary assessment of consumer sentiment in May showed that U.S. consumer confidence suffered its biggest monthly drop since August 2021, falling to a six-month low, while near-term and long-term inflation expectations rose.
Asian stocks climbed to a 15-month high on Monday. As before, markets are keeping a close eye on inflation data this week that could determine hopes for an early U.S. rate cut, while Chinese activity data will also test optimism about a sustained global economic recovery.
Beijing said inflation rebounded to an annualized 0.3% in April, helping to ease concerns about a prolonged period of deflation. Retail sales and industrial output data for April due on Friday are expected to show further gains.
In addition, Chinese authorities plan to sell 1 trillion yuan (about 138.24 billion U.S. dollars) of long-term bonds to support domestic stimulus spending. While improving sentiment helped push Chinese blue-chip stocks to a seven-month high, they fell 0.1% on Monday as reports that the White House was about to announce new tariffs on Chinese goods weighed on some sectors.
MSCI's Asia Pacific stock index is currently up 0.2%, marking three straight weeks of gains. Japan's Nikkei was flat, still facing the possibility of a rate hike if the yen falls further. Meanwhile, the Bank of Japan on Monday cut the amount of Japanese government bonds it buys in regular operations, sending a hawkish signal to the market and pushing yields higher.
The Reserve Bank of India also expects inflation to return to its 4% target next quarter, a Reuters poll showed, and will cut rates then. However, as economic growth remains good, the RBI may want to wait for the Fed to cut rates before taking action to prevent the rupee from falling to a record low against the dollar.
In commodities, oil prices fell last week as U.S. gasoline and distillate inventories rose. Brent crude fell another 22 cents to $82.57 a barrel, while U.S. crude fell 17 cents to $78.09 a barrel.
Gold prices rose 2.5% before easing slightly to $2,358 an ounce, driven by demand from momentum funds and talk of continued Chinese buying.
