Crypto Assets Market Weekly: Highlights and Shadows in the Downward Trend

This week, the Crypto Assets market has shown a rapid fall trend, with the market sentiment index plummeting from 33% to 11%. The market capitalization of stablecoins has basically stagnated, indicating that as the market falls sharply, institutional funds have stopped entering and started to exit. The market panic is mainly due to a large-scale asset theft incident at a certain exchange, as well as Trump's proposed aggressive tariff policy exacerbating inflation concerns, reducing the likelihood of a Federal Reserve rate cut, and increasing worries about a U.S. economic recession, which has strongly impacted market sentiment. Overall market sentiment has plunged into extreme panic, with most coins performing worse than the benchmark index.

Next Week's Forecast Targets

Bullish targets: LTC, S, SOSO, BERA

LTC has risen against the trend this week, mainly benefiting from the increased market expectations for its ETF approval. The spot LTC ETF has been listed in the DTCC system, with an approval probability of 87% on prediction platforms. In the short term, the market may continue to speculate on the LTC spot ETF theme.

The price of the S coin has risen against the trend, mainly due to Sonic's expansion into the DeFi space, attracting a large number of users and funds through high APY. The on-chain liquidity staking project offers a maximum APY of up to 123%, with a lending rate of 10.21%, allowing users to obtain a return rate of over 20%. This high yield has attracted more users to participate, driving up the demand and price of the S coin.

The SOSO project team can adjust its development direction based on market trends, shifting from an AI investment platform to a high APY wealth management service center. The recently launched second season mining activity offers staking rewards plus additional airdrops, with a maximum of 42% APY, attracting more users to participate and enhancing bullish expectations for the SOSO token.

Although BERA was once affected by market falls, the Berachain project team quickly adjusted the staking yield of the on-chain LSD project, with a maximum APY of 123% and a lending rate of 23.68%, allowing arbitrage users to achieve a 100% risk-free annual return, thus curbing the downward trend and turning it into an upward one. Berachain employs a high APY strategy to attract users and funds, increasing the demand for BERA tokens and promoting price growth.

Bearish assets: ETH, SOL, ADA, AI, TKO, RUNE

Although the stolen funds of ETH have been replenished, there are still concerns in the market. The exposure of safe technology vulnerabilities has also raised questions about the security of Ethereum ecosystem projects. The Pectra upgrade is about to go live on the test network, but it has failed to inject enough momentum into the ETH price. A pullback is expected after the upgrade goes live.

SOL has significantly fallen as the surge of Meme coins retreats, with a large outflow of on-chain funds, and both TVL and trading volume have shown a notable decline. The upcoming large-scale token unlock may bring further selling pressure, exacerbating market panic.

The on-chain TVL of ADA has significantly decreased, and ecosystem projects are generally experiencing capital outflows, indicating negative sentiment among users towards the Cardano ecosystem. Both the on-chain DEX trading volume and lending activity have dropped sharply, and ADA is expected to remain under pressure.

The AI project Sleepless AI, which is in the AI and GameFi sector, has experienced a significant pullback in this round of fall. The market generally believes that the valuation of AI projects is too high, and with a substantial proportion of token unlocks approaching, it may face downward pressure in the short term.

TKO, as an exchange token, has performed poorly due to a certain exchange's hacking incident. The upcoming large-scale token unlock may also bring selling pressure.

RUNE experienced a brief increase early on due to hackers using its platform for money laundering, but with trading volume decreasing and market concerns about money laundering behavior, the price is expected to remain under pressure.

Market Sentiment Index Analysis

The market sentiment index fell from 33% last week to 11%, overall nearing the extreme fear zone.

Hot Track

Sonic

The TVL of Sonic chain maintains rapid growth, with a growth rate of 10.32% this week, reaching 683 million USD. Its token S rose 7.63% this week, standing out against the backdrop of the overall market fall.

Sonic has recently shifted its focus to DeFi, adopting high APY strategies to attract users. Major on-chain projects can provide up to 123% APY, with lending rates around 10%, allowing users to achieve over 100% arbitrage profits, significantly boosting the demand for S coins.

Future development must focus on whether its economic flywheel can operate efficiently and sustainably, achieving a positive cycle of staking, liquidity release, DeFi empowerment, token appreciation, and user return. Caution is needed regarding the risk that new funds cannot cover the selling pressure brought by arbitrage.

Berachain

Berachain's TVL increased by 4.66% this week, reaching $3.194 billion, ranking sixth among public chains. Its token BERA price rose by 7.26%, showing strong performance.

Berachain attracts users by increasing the APY of on-chain LSD and lending projects to as high as 190.12%(, allowing arbitrageurs to obtain 100%+ risk-free returns, thus reversing the downward trend of TVL.

The future development also faces the challenge of whether the inflow of arbitrage funds can cover the selling pressure. Attention should be paid to whether high-quality projects can be incubated on-chain, and whether high APY can be sustained.

Overall Market Overview

This week, the Sociafi track performed the best, while the PayFi track performed the worst. In Sociafi, the fall of TON and CHZ was relatively small; while in PayFi, the fall of XRP and XLM was significant.

Important Events Preview for Next Week

• March 3: US February ISM Manufacturing PMI
• March 5: US February ADP employment numbers; Ethereum Pectra upgrade launched on the testnet
• March 7: U.S. February non-farm payroll data and unemployment rate

Summary

This week, the Crypto Assets market has significantly fallen, causing widespread concern among investors. Some projects like LTC and Sonic are attracting users through high APY strategies, but long-term development still requires attention to market stability and the emergence of new projects. Investors are advised to closely monitor market dynamics and operate cautiously.