Written by Metrics Ventures
Review and comments on the overall market situation and market trends
The past month's market has been a torment for most holders. The repeated convergence of volatility and the resonant downward trend of asset prices have exploded in early July under the stimulation of various external selling pressures. The decline in contract positions on a single day is close to that of FTX on the same day. As of the time of writing this month's report, the market has stabilized on the basis of Friday's macro data and formed an inertial rebound on Saturday. The following phenomena have occurred in this round of leverage liquidation:
① A large number of altcoins stabilized for the first time after a sharp drop;
② Bitcoin is supported near the middle track of the previous upward channel and the miners’ cost line;
③SOL's overall structure is relatively strong, but ETH has given up all the gains stimulated by ETFs;
So far, Bitcoin has formed a diffuse consolidation structure, but it has not fallen below the upward trend. Following our analysis in June, the diffusion here is conducive to the re-consolidation of chips, which is healthy for the long-term trend. Considering that we still believe that interest rate cuts are inevitable this year, we believe that around US$50,000 is a good medium- and long-term chip reabsorption position. For most cottage industries, we believe that the short-term increase in volatility does not form a reversal trend, but there are also MM-strong currencies among them, which still need further observation.
In summary, the market is healthier than last month, but the accumulation of momentum still needs to occur through fluctuations and re-convergence. It is a good idea to remain patient.
Sector ecology
ETH ecosystem and Defi: The Defi sector remains weak, and the entire ETH sector has been unable to rebound.
Funds in the circle will be attracted by SOL and TON, and there is little buying of ETH. In addition, due to the continued low gas fee on the ETH chain, which has been below 10gwei for a long time, ETH is in a state of net issuance, and the potential selling pressure is 2x that of BTC.
The net inflow of funds for BTC ETF is 50 billion US dollars, which digested the selling pressure of GBTC of 15 billion US dollars in 6 months. The scale of Grayscale ETH is 1/3 of BTC, which means that ETH ETF needs to have 1/3 of the attractiveness of BTC ETF to achieve the same effect as BTC. However, the inflow of ETH ETF may be difficult to exceed 1/3 of BTC.
Overall, the ETF will be mainly BTC net inflow, supplemented by ETH. We believe that ETH's net inflow will be much worse than BTC, so the price performance will not be as strong as BTC. At the same time, ETH's output selling pressure cannot be digested, and the continuous issuance will also weaken the confidence of ETH ETF holders. Therefore, the ETH/BTC trading pair is still not optimistic in the medium term.
Layerzero: $ZRO has a good chip structure, and retail investors have almost no chips. There may be market trends in the future, but we will not allocate any more chips at this position.
TON: As one of the two alpha ecosystems in this round, TON ecosystem is still worthy of attention. Currently, the only secondary target of TON ecosystem is $NOT. Buy it at the bottom and continue to pay attention to it.
SOL: Solana is still the ecology we are optimistic about in this round, and SOL’s strong support level at the 120-130 line is still confirmed to be effective. Multicoin Capital will donate 1M worth of SOL to the Sentinel Action Fund (pro-cryptocurrency candidate for US Senate)
The better alpha tokens in the SOL ecosystem are $JUP and $JTO.
There are several good memes in the SOL ecosystem that you can pay attention to: $Billy/$Aura/$Retardio
AI: The AI sector basically followed the overall market this month and its performance was average, but we believe that as the main line of this round of speculation, we will still pay close attention to the subsequent performance of the AI sector. The leading projects in the sector are TAO and RNDR.
