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Quick read (see below for detailed interpretation)
Market sentiment index: 65 (last week's index: 65)
Comprehensive judgment
Reason: US CPI and unemployment rate declined, inflation was suppressed, and expectations of a rate cut in September increased.
Reason: Nasdaq has a large correction at the daily level, which has brought great pressure on the upward movement of BTC prices.
Last week's market review
The funding situation has improved slightly, the contract rates of mainstream currencies have remained stable this week, and there are no abnormal characteristic values in the fundamentals of the chain
From a technical perspective, as we analyzed, last week's market was bullish, but was suppressed and bearish, and the market was volatile.
This week's outlook
At present, there is no obvious signal of stopping the decline in the weekly line, and the transition is not sufficient. It is difficult for the weekly line to show a strong rise. If it does, it will be stronger than expected. The daily line also has no obvious signal of stopping the decline, so the idea for next week is to be cautious, neutral and directionless. From a trading perspective, we pursue the risk-reward ratio and will not short. However, if this price of BTC can go sideways for three days, we can try to go long. If this price goes directly up, we will continue to wait and see.
? Popular tracks
Panic continued to spread in the market during the week, with the fear index falling to 25, a one-year low.
From the perspective of funds, the track with the largest transaction volume this week is the game track, followed by L2 and MEMEs. In terms of net inflow, it seems that only Ethereum tokens have a large net inflow this week. The altcoins have also performed relatively well with the slight rebound of BTC and have received certain support.
The tracks that dominated the trend this week include modularization, BTC side chain, EVM parachain, node network, application chain, DA layer, etc., all of which have increased by more than 10%.
This wave of TIA's increase may be due to the recent modular conference "Modular Summit", which is a market-making strategy to increase exposure and market heat.
This week, the market was dominated by the Infra track, and some tokens performed well. With the slight rebound of BTC, altcoins received certain support and the market fundamentals showed signs of recovery.
? Popular projects
1. Unisat
On-chain activity and revenue plummeted
Important update: Introducing Sats into the trading system
2. DOGS
Sunshine Airdrop
The eating is ugly, 0 turns into IEO
3. SEND IT
Blink Important Applications
Solana Bigwigs Stand Up
Key data release date
WolfDAO-Jul.15 Important data release reminder
1. Macroeconomic Research
1. BTC market analysis
Source：Tradingview
As we said last week, 58,000 has become an important support-resistance swap level. Whether the current price can stand firm at 58,000 is the key to determining whether there will be a reversal between long and short positions.
Source：Coinglass
According to the liquidation map, there are many liquidation orders at 56,000, which will provide support for the price to go down. There are many high leverage orders at 57,000 above. If this point is reached, it is expected to test 58,000 to clear the high leverage above.
Source：Coinglass
It can be clearly seen in the options market that the number of call options between 9.27 and 12.27 is much higher than that of put options, and the nominal value is much higher than the value last week. The market's expectation of a rate cut in September has become an important factor driving the price forward.
Rainbow Chart
Source：Coinglass
The current rainbow chart shows that you can consider buying BTC in the near future, which is a relatively positive signal.
2. Expectations of interest rate cuts
After Powell's speech yesterday, the market expects the probability of the first rate cut in September to reach 70%, and it is expected that there will be two rate cuts this year. This round of bull market is taking place against the background of high US dollar interest rates. There has always been a bottleneck of relatively tight liquidity, and liquidity is concentrated in a few hot tracks. It is expected that the supply of USDT will accelerate after the interest rate cut begins, becoming one of the main driving forces of the overall bull market.
3. Market changes
The CPI data released today was lower than expected, and expectations for interest rate cuts have increased significantly. The S&P and Nasdaq fell sharply, while small and medium-sized stocks rose sharply. Looking at the distribution of chips, the chips at the bottom have decreased. When large-cap stocks rise to a certain level, the capital deposited in them will flee for profit. It is best to flee to small-cap stocks, which means that capital is still in the market and will not cause a liquidity crisis. In the end, large-cap stocks will rest and small-cap stocks will take over.
Source：Tradingview
Do you want to participate in this round of micro-cap stock market?
The Russell 2000 Growth Index IWO has 1,065 constituent stocks. The stocks that perform well are only a small part of them, so I don't think the overall performance will continue to be good. In addition, the market of small stocks can be unfounded. Many stocks soar not based on fundamentals, and it is difficult to be sustainable. Whether there is a market depends entirely on capital speculation and following the trend. The market of many stocks may end in one step. Ordinary investors who follow the trend and chase the rise are likely to be cut off. The uncertainty is very high, and it is very difficult to step on the rhythm.
4. Fund Inflow/Outflow
The inflow has slowed down recently, and the inflow of ETFs has not played a role in supporting the price of the currency. The expectations and funds in the market have not been fully released. We need to wait for further economic data or interest rate hike expectations to stimulate more effective capital inflows.
Source：Coinglass
5. Coin Circle Atlas (Capture and Identification Manual -1 update)
Butterfingers & Takeover Dog Diagram - WolfDAO
5.1 When you are making a profit, you are a risk-averse person, and when you are losing money, you become a risk-seeker. This mentality prevents us from making long-term profits in the trend market, but once the price drops sharply after buying, we may suffer huge losses. Therefore, we need to pay attention to the moment of risk reversal and return to the market to make judgments.
5.2 Losses are a process of gradual numbness. Every time a new floating loss is added, the pain is reduced. Therefore, it is necessary to set a conditional stop loss on the market and a mental stop loss in the mind.
2. Market data analysis
1. USDC & USDT Stablecoin Circulation
The number of stablecoins is 146.269 billion, and the number of stablecoins increased by 714 million last week. Although the graph shows that it is sideways, the market capital side has increased slightly in terms of value, which is slightly improved compared with recent periods. In the past five trading days, the net inflow of US ETF funds was 880 million (5-11). Overall, the situation is improving.
Source：Glassnode
2. USDC & USDT OTC discount and premium
Source：OKX
Last week, the OTC premium and discount experienced a V-shaped trend, and this week the premium level fell back.
3. Contract market data - perpetual contract funding rate
Source：Glassnode
After the market fell last week, it entered a state of rebound and sideways this week, and the contract market sentiment was relatively stable.
4. BTC on-chain chip data
We have used a lot of words to interpret this chip data structure in the past few weeks. The current chip structure fluctuates completely with short-term fluctuations this week, without any obvious characteristic values. However, there is an abnormal movement of 13,000 BTC chips at the price of 26501, but the proportion is only 0.07%, and it is not an abnormal movement in the entire range, so there is no need to pay special attention.
Source：Glassnode
5. Daily and four-hour technical analysis of the past week
We mentioned last week that the daily bulls have a need for a technical rebound, and the weekly line is still strong, but I think the daily decline is neither too high nor too low, and the short position will tend to be volatile, and the long position may be suppressed by 58,000-59,000. Next week's trend is in a chaotic situation in my opinion, but the overall operation should be based on cautious bullish thinking, and the bottom line inverted pyramid strategy can be used to increase positions to 52,000.
This week, the market fluctuated sideways and widely. The lowest price fell to 54,200 on Monday, and rose to 59,500 on Thursday. It is currently trading sideways at 57,700. After the CPI data was released on the evening of July 11, the market surged slightly, but then it was immediately beaten back by the market. The US stock market also fell significantly that night. It is currently in a sideways state.
Outlook for next week
At present, there is no obvious signal of stopping the decline in the weekly line, and the transition is not sufficient. It is difficult for the weekly line to show a strong rise. If it does, it will be stronger than expected. The daily line stop falling signal is not obvious either. The short-term technical game is divided into two stages. One is the game process, in which both long and short positions perform well. The second is the result of the game, in which long and short positions reach a consensus and produce a short-term consistent direction. The idea for next week may be that the short position continues to perform, and it is difficult to produce a consistent direction, so the idea for next week is a cautious, neutral and directionless idea. From a trading perspective, I haven't seen a clear game at present, so I won't have any ideas in the short term, and I won't short. If it goes sideways or pulls back, and doesn't fall below 56,000 for three days, I may try to go long. If it breaks, I may have to wait until the market is clearer. If the entire position continues to rise directly, then I will leave the market and continue to wait and see.
3. Judging the trend of public opinion
1. Sorting out hotly discussed keywords and events
This week's hot keywords - WolfDAO
Hot keywords and event interpretation
?️ Hot events
Binance Turns 7 (binanceturns7 / binance): During the event, there were a lot of discussions about Binance’s strengths, functions, currencies, and advantages. At the same time, there was also a prominent discussion on the functions of Binance Academy, which was considered to play a great role in education and learning blockchain.
German government and Saxony move and sell large amounts of BTC following action on Bitcoin exchanges
? Policy market fluctuations
Federal Reserve Chairman Jerome Powell's statement on inflation, interest rates, and the economy
Former US President Donald Trump is scheduled to speak at the world's largest Bitcoin conference in Nashville this month
The U.S. CPI inflation rate fell to 3% in June, lower than expected! Investors speculated that the Federal Reserve might cut interest rates, causing the price of Bitcoin to surge. The impact of inflation rates on the cryptocurrency market has been highlighted.
?️ Project Hotspots
Binance plans to delist MDX on 2024-07-22. The token price plummeted along with $BOND, $DOCK, and $POLS due to delisting;
Dogs: used for buying and selling on the TON platform, with large price differences;
Paxos: The U.S. Securities and Exchange Commission has officially concluded its investigation into Paxos’ issuance of the BUSD stablecoin and declared that BUSD is not a security
2. This week's hot topics
This week's hot projects - WolfDAO
Interpretation of popular projects
Interpretation of popular projects - compiled by WolfDAO
3. Popular tracks
This Friday, the Fear and Greed Index was 25 (extreme panic), down 65% from the previous month and 72.3% from the greed peak of 90 in April this year, setting a new low in a year, indicating that the overall panic in the market is still spreading.
Fear Greed Index_7.12 (Source: Alternative)
Fear Greed Index_1 year (Source: Alternative)
If we extend the timeline a little bit, we can see that the current level of panic is close to the panic value when the market crashed due to the LUNA explosion in 2022, but the biggest difference between now and that time point is that we are currently in a bull market cycle, and the bull-bear transition began in 2022 and the market fell to the bottom.
Fear Greed Index_All (Source: Alternative)
Combined with the fact that bulls are still the main force in the options market, it can be explained to a certain extent that the bottoming out of the panic index is only a short-term phenomenon, and bulls are still optimistic about the market in the medium and long term.
Therefore, we believe that market panic caused by non-major black sky events in the mid-term bull market is a signal for bargain hunting, which is suitable for left-side trading and medium- and long-term layout.
BTC options positions (Source: Coinglass)
From the perspective of funds, the track with the largest transaction volume this week is the gaming track, followed by L2 and MEMEs.
Transaction volume ranking_7days (Source: Coinglass)
The transaction volume of the gaming track surged by 76%, mainly due to the booming Telegram ecosystem that boosted the price and transaction volume of Notcoin. We have previously made a detailed TON report on the TON ecosystem, so we will not go into detail here. You can learn more about it in our report.
Game track transaction volume distribution_7days (Source: Coinglass)
NOT price trend (Source: Tradingview)
In addition, the new project DOGS that appeared on Telegram this week has once again focused the market's attention on TG through its sunny airdrop. Currently, the number of fans of its TG channel has exceeded 3 million. The following hot projects of the week will conduct a detailed analysis of DOGS.
In terms of net inflow of funds, it seems that only Ethereum tokens have a large net inflow this week ??
Its main trading volume is focused on ETH itself, followed by altcoins with better liquidity such as WLD, ONDO and RNDR, which also have considerable trading volumes.
As for altcoins, they performed relatively well this week as BTC rebounded slightly, and received certain support. Some tokens such as OM, NOT, and TIA even saw an increase of more than 40%, which was a very impressive performance.
The rise and fall of spot prices in the market during the week (Source: Crypto Bubbles)
Specifically in terms of tracks, according to Coingekco's 7-day track ranking, we can see that the tracks that dominated the trend this week include modularization, BTC side chain, EVM parallel chain, node network, application chain, DA layer, etc., all of which have increased by more than 10%.
It can be found that the common feature of these tracks is that they are all infrastructure-oriented tracks. We believe that this phenomenon, in addition to the promotion of some market makers, to a certain extent, actually reflects that the fundamentals of the crypto market are gradually correcting from the shadow of previously relatively strong sectors such as AI, MEME, and the decline of BTC.
Track performance ranking_7 days (Source: Coingecko)
When the market's attention and liquidity gradually shift from some tracks with weak fundamentals (not derogatory, weak fundamentals do not mean there is no wealth effect) to some fundamentals-oriented and strongly technology-oriented Infra projects, the overall market prosperity and fundamentals will be repaired with a lag. It is currently estimated that this repair cycle will take some time. In the short term, on the premise that BTC does not fall further, it may gradually form a stage bottom and lay the foundation for the start of the subsequent bull market's main upward wave.
But on the other hand, while we are optimistic about the market situation, we also need to pay attention to and analyze the reasons for the rise of the leading track and its leading tokens this week.
This week's top track is modular blockchain, with a total market value of $2.25 billion and a 24-hour trading volume of $259 million. The leading project in the track is Celestia, with a token name of TIA, a market value of $1.289 billion, a Coingecko market value ranking of 67, a current price of $6.5 (July 12, 2024), and a FDV of $6.919 billion.
Track Narrative:
Modular blockchain aims to solve the scalability and performance problems of blockchain through innovative technology and design, thereby promoting the development of the blockchain ecosystem.
Modularity refers to breaking down the network into different functional layers, including execution, data availability (DA), consensus, and settlement.
The DA layer is responsible for storing the data required to verify the validity of transactions. It is essential to ensure that all transaction data can be publicly accessed and verified on the network, which is crucial to maintaining the integrity and security of the blockchain system. Therefore, the DA layer is also an important layer in modularization.
Modular Split Logic (Source: Gate Learn)
Track layout
List of modular track projects (Source: Coingecko)
From the list of track projects, we can clearly see that TIA has an absolute leading position with a market share of 57%. Compared with the subsequent Dragon 2 DYM and Dragon 3 SKL, it has a huge lead. Therefore, we can conclude that the modular track is currently monopolized by TIA, and the remaining projects pose little threat to TIA's market share.
Modular track layout (Source: WolfDAO)
Leading target: TIA
Celestia is the first project to adopt a modular data availability network, designed to scale to the growth of the number of users in a secure manner. Its modular design makes it easy for anyone to launch an independent blockchain.
As a leading project of modular public chains, Celestia is developed based on Cosmos SDK and is committed to improving data availability.
On the monthly level, TIA started to move on July 5 and temporarily peaked on July 10, with the highest increase of about 67%. It has now fallen back slightly, and the 7-day increase has narrowed by 50.2%.
TIA price trend_1 month (Source: Coingecko)
According to our observations of the market and targets, the Celestia protocol itself has not announced any major updates or released good news, and its fundamentals have not changed significantly yet. Therefore, we believe that this surge in TIA may be due to the recent holding of the modular conference "Modular Summit", which is a market-making strategy to increase exposure and market popularity.
Modular Summit Conference (Source: Maven 11)
In general, the market showed signs of recovery this week, and is gradually digesting the market selling pressure caused by Mt.Gox and the German government's continuous market crash last week. Although the TIA's pull this week is mainly to cooperate with the meeting for speculation, the track movement is mainly in some Infra-oriented tracks. The fundamental repair viewpoints in the previous article still have certain reference value. Coupled with the approaching macro interest rate cut expectations, we believe that the main uptrend of the bull market will be in the near future.
4. Hot Projects
Project 1: Unisat (Bitcoin ecosystem, Inscription wallet)
UniSat Wallet is a browser extension wallet that allows users to store, send and receive Bitcoins and Ordinals on the Bitcoin blockchain.
On-chain data
Unisat daily transaction volume and cumulative revenue source: dune
Due to the sluggish BTC ecosystem, especially the inscription runes, Unisat’s on-chain transactions have basically stagnated. The current daily transaction volume is around 50,000, down more than 95% from the peak in the first quarter. Considering the water injection factor, the actual situation may be worse. The protocol revenue is basically negligible.
Recent Events
New round of financing announced
Unisat investors source: rootdata
On July 4, UniSat announced that it had completed its Pre-A round of financing in May this year, led by Binance. The specific amount of financing has not been disclosed yet.
Unisat's last round of financing was in March this year, with participation from Japanese cryptocurrency investment firm CGV, but the specific amount was also not disclosed.
Its financing rounds were basically during the inscription boom period, driven by the overall popularity of the track, and have little reference value for the current financing situation. Analogous to the situation of Opensea, its valuation was over 10 billion when NFT was the hottest, but its current valuation has dropped sharply and may even be less than 10 million.
product update
On July 7, UniSat said that most of the development work on Swap based on the Bitcoin mainnet has been completed. The expansion plan Fractal Swap is scheduled to be launched in September and will implement a competitive rollup mechanism that allows users to package their rollup results into the sorter and earn transaction fees (brc-20 sats) generated by all transactions in the rollup. This process is similar to miners submitting packaged transactions to the network and receiving block rewards. Stimulated by this news, sats rose by 18% in a short period of time.
Sats price trend source: Binance
In the case of a weak inscription market, the radiation effect of technological updates in a short period of time is limited. However, it is noteworthy that Sats has been introduced into the trading system as a Gas Fee, which has a practical application scenario and gives it a relatively long-term imagination space.
Project 2: DOGS (TON ecosystem meme, large-scale airdrop)
DOGS is inspired by the mascot Spotty created by Pavel Durov, the founder of TON. The official introduction states, "Dogs is the meme coin that best fits the spirit of Telegram, embodying the spirit and culture of our vibrant community. We bring the legend of Spotty to the world of cryptocurrency to create a fun, community-driven and unique product."
Massive Airdrop
A few days ago, many KOLs posted on X that DOGS airdropped different amounts of tokens to all Telegram accounts.
As long as you enter the Dogs bot channel, the robot will rate your account based on the registration time and activity of your tg account, and distribute points according to the level. At the same time, accounts that open Premium will also receive additional points.
The number of DOGS received by users with an account age of one year is generally around 838, and more tokens can be obtained through invitations and other activities.
800 tokens rank close to 7 million, the threshold for the top 100 is around 500,000, and the highest is over 8 million. A rough estimate is that the total number of tokens issued should be close to 100 billion.
DOGS hastily launched Telegrams stars without any features or plans, with a 1:1 exchange rate, and Telegram Stars can be purchased directly with legal currency. I thought the project, which was originally 0-for-nothing, now looks like a disguised IEO.
In addition, considering such a huge distribution volume and such dispersed chips, market value management will also be a problem even if it is launched online later.
Project 3: SEND IT (NFT, Solana blink)
On July 3, SEND posted on X and launched 100,000 Send It series NFTs. Combined with Blink’s function, users can directly click the Collect button on the X page to mint.
Blink is a very popular concept recently launched on Solana. Blink allows on-chain functions to be embedded directly on Twitter. By clicking on a tweet, various actions on the chain such as Swap, Mint and Donate can be completed.
Price performance
source：tensor.trade
At present, the floor price of SEND IT is 0.63 Solana, which has increased nearly 6 times in two days, and the market value is close to 10 million USD. The liquidity is relatively good, and the daily trading volume accounts for 20% of the total. The floor is relatively thin, with about 4,000 pending orders accounting for 4% of the total. If there is a large amount of capital coming in, it can be quickly absorbed.
Analysis of the reasons for the rise
The biggest application of the Blink concept. The concept of Blink has been highly anticipated in the Solana community recently. Last week, the meme called Star Cat became popular in the community just because it was related to Blink, and its market value once exceeded 10 million. The 100,000 NFTs on SEND IT can be sold and purchased directly on X through Blink, which is undoubtedly a step further. At the same time, it was the first to mention this word one day before Blink was officially announced, which made the community suspect that it was actually supported by the Blink-related behind-the-scenes team.
Airdrop expectations. SEND said that every player holding NFT will have the opportunity to win a lottery with a 6.9 SOL bonus and that more airdrop rewards will be announced later, directly raising expectations.
Solana founder stands on the platform. Solana founder Toly’s current top tweet is another 100 use cases of Blinks proposed by the SEND team. With the current popularity of SEND IT, it is likely that more bigwigs will come out to express their support for this project in the future.
Well, that's all for this issue of the weekly report. Thank you for your support.
