Crypto Market Weekly Report: Liquidity Tightens, Alts Rise Against the Trend

Market Overview

This week, the crypto market is showing an overall downtrend, with Bitcoin breaking through important support levels. The US dollar index is nearing a new high for the year, putting pressure on risk assets. The strength of the dollar is not only due to the resilience of US inflation and the potentially delayed rate cuts, but also reflects market concerns about geopolitical risks. Nevertheless, the Ethereum ecosystem is performing relatively strong, with the ETH/BTC exchange rate strengthening, and some alts rising against the trend.

Bitcoin Trend Analysis

The price of Bitcoin has fallen below the 3-month average holding cost, and the market has entered a stage of exhaustion. Historical data shows that if this trapped structure persists, it may lead to a further deterioration of investor confidence, making the adjustment deeper and more prolonged. It is worth noting that similar significant adjustments have averaged five occurrences in past bull markets.

On-chain data shows that the market capitalization supply growth of stablecoins is slowing down, indicating a lack of new capital inflows into the market. Institutional funds have shown a net outflow for two consecutive weeks, but there has been an increase in capital inflows into the altcoin sector. The MVRV-Z Score indicator has fallen below the key level of 1, showing that overall holders are currently in a state of loss.

Futures Market Dynamics

In the futures market, the funding rate has slightly decreased, but it still shows that there is a lot of long leverage. The open interest for Bitcoin futures continues to decline, reflecting a decrease in market participation. The long-short ratio in futures remains around 2.4, indicating that retail investors still have a strong willingness to bottom fish, which may suggest that the market has not yet reached its bottom.

Spot Market Performance

Bitcoin has been in a sideways consolidation since it reached a historical high of $73,000 in March. The overall trading volume on centralized exchange (CEX) has decreased to levels seen at the end of last year, while the trading volume on decentralized exchange (DEX) remains relatively stable. The ETH/BTC exchange rate continues to strengthen, suggesting that future market opportunities may be more concentrated in the Ethereum ecosystem.

Public Chain and DeFi Data

This week's total locked value ( TVL ) decreased to $95.3 billion, a week-on-week decline of 5.6%. The TVL of mainstream public chains almost all fell, with Ethereum down 8%, Tron down 6%, and BSC down 5%. It is worth noting that the TON chain's TVL increased by 107% this month, becoming one of the few bright spots.

NFT Market Trends

The NFT market continues to be sluggish this week, with the floor prices of blue-chip projects generally experiencing significant declines. CryptoPunks dropped by 13%, BAYC fell by 17%, and Pudgy Penguins decreased by 28%. Overall trading volume has slightly declined, and the number of first-time and repeat buyers is also gradually decreasing. The only exception is the Milady project, which saw a slight rise of 4% in its floor price. Overall, the NFT market remains in a state of extreme recession.

Conclusion

The current crypto market is facing multiple pressures, including tightening macro Liquidity and outflows of institutional funds. However, the Ethereum ecosystem has shown some resilience, with some alts rising against the trend. Investors should closely monitor market movements, operate cautiously, and pay attention to potential structural opportunities.