Foresight Ventures: Market liquidity retreats, altcoin index plummets

Due to regulation and being at the end of liquidity, the cryptocurrency market is much weaker than the US stock market.

Author: Jonas

A. Market Outlook

Monetary liquidity is tightening. The U.S. May CPI inflation index increased by 4% YoY, better than the expected 4.1%. The Fed suspended rate hikes in June but hinted at two rate hikes later this year, which is more hawkish than expected. The U.S. dollar index oscillated lower. The U.S. stock market continues to maintain strong upward momentum, with the S&P and NASDAQ both hitting one-year highs. Due to regulation and being at the end of liquidity, the cryptocurrency market is much weaker than the US stock market.

B. Market Trends

Top 100 Market Cap Gainers:

The market suffered a big drop this week. BTC market share hit a 2-year high, further concentrating liquidity to BTC. The Altcoin Season Index is close to an all-time low, with many popular altcoins suddenly dropping by 20-30%. Market hotspots are scarce, mainly revolving around BNB regulation and meme coins.

  1. UNI: The innovation of v4 is not as good as v3. The main change is that v4’s hook is similar to a customized module, and the creator of the liquidity pool can make various independent innovations.

  2. MAV: Binance launched a new coin mining project. MAV is a decentralized exchange in the spot-to-pool mode. Based on Uniswap v3, it has launched directional liquidity pools, and LPs can move according to the expected direction of asset prices to increase fund utilization. MAV’s main competitor is DODO, which now has a total market value of $100 million. MAV’s latest round of financing is valued at $240 million.

  3. OX: A credit trading platform created by Zhu Su, the founder of Three Arrows Capital, can pledge OX to get trading fee refunds.

  4. RAPTOR: A meme coin from the foreign 4chan community, similar to Reddit, which is the birthplace of meme culture. RAPTOR is fairly launched with no transaction tax.

3. BTC Market

1) On-chain data

Amid the major charges filed against it in the United States, Binance exchange faced a run on withdrawals. In the past week, Binance’s stablecoins have dropped by $1.6 billion, accounting for about 21% of its total balance. BTC and ETH reserves have also declined by 6% and 7%, respectively. In contrast, Coinbase, which has also been under scrutiny, has not seen such dramatic changes in net reserves. The balance of stablecoins has remained relatively stable, BTC reserves have only dropped by 1%, and ETH reserves have dropped by 8%. On the other hand, BTC long-term holders have been very calm and have not shown any significant reaction to the news.

Stablecoin balances continued to decline overall. However, the market value of USDT continued to increase slightly, indicating that funds were flowing out of the U.S. region and into the Asia-Europe region.

The long-term trend indicator MVRV-ZScore, based on the total market cost, reflects the overall profitability of the market. When the index is greater than 6, it is in the top range; when the index is less than 2, it is in the bottom range. MVRV has fallen below the key level of 1, indicating that holders are generally in a loss state. The current index is 0.36, indicating a recovery phase.

2) Futures Market

Futures funding rate: Neutral this week, market sentiment slightly bearish. Rates of 0.05-0.1% indicate more long leverage, which is a short-term market top; rates of -0.1-0% indicate more short leverage, which is a short-term market bottom.

Futures open interest: Total open interest declined this week, with main funds withdrawing from the market.

Futures long/short ratio: 2.2. Retail investors have a high buy-the-dip sentiment. Retail investor sentiment is often a contrarian indicator, with below 0.7 indicating panic and above 2.0 indicating greed. The long/short ratio data fluctuates greatly, reducing its reference value.

3) Current market situation

Both BTC and ETH began adjusting their weekly lines this week, and the market is likely to continue to fluctuate weakly in the next 2-3 months. As can be seen from the history of SEC crackdowns, the market tends to rise after a crackdown. Considering that the Fed’s interest rate cut timetable has been delayed, the real start of the bull market will have to wait until later this year. The spring of the crypto market will definitely come, but be careful not to fall in the winter when it is not over yet.

B. Market Data I. Total lock-up volume of public chains

II. Proportion of TVL in each public chain

The total TVL this week fell by 4.2 billion, a decline of 9.25%, which is the largest decline in recent weeks, mainly due to the impact of market liquidity withdrawal. This week, the proportion of ETH chain TVL continued to rise by 0.3% to 58.7%.

Looking at the TVL data for the past seven days, affected by SEC’s crypto regulation and collective liquidity withdrawal, both L1 and L2 are showing a trend of significant decline, and the decline in the TVL of popular public chains is mostly above 10%. BSC chain’s TVL fell sharply by 13.9%. Moreover, the TVL of the core public chains of all Ethereum Layer 2 networks have declined, with Arbitrum falling by 9.8% this week, Optimism falling by 10.12%, Polygon falling by 14.7%, and Avalanche falling by 10.08%.

III. Lock-up volume of each chain protocol

1) ETH lock-up volume

2) BSC lock-up volume

3) Tron Lock-up Situation

4) Avalanche Lock-up Situation

5) Polygon Lock-up Situation

6) Arbitrum Lock-up Situation

7) Optimism Lock-up Situation

IV. Historical ETH Gas Fee

The current on-chain transfer fee is approximately $0.72, Uniswap transaction fee is approximately $6.64, and OpenSea transaction fee is approximately $2.58. Compared to last week, gas fees have significantly decreased, and it can be seen that the overall gas fees have remained at their lowest point due to the withdrawal of market liquidity and lack of hotspots in recent times.

The deposit fees on the Layer 2 network are as follows: Arbitrum $3.28, Optimisim $5.42, Polygon $5.37, and ZkSync $5.16.

V. NFT Market Data Changes

1) NFT-500 Index:

2) NFT Market Situation:

3) NFT Trading Market Share:

4) NFT Buyer Analysis:

5) Number of Active Projects:

From the total volume of the market, it can be seen that it has increased compared to last week. The NFT market share shows Blur accounting for approximately 86.5%, an increase of 4.2% compared to last week. Opensea accounts for approximately 8.2% of the market share, a decrease of 3% compared to last week.

From the number of active projects, there has been a slight rebound after several weeks of decline, especially for projects with a volume of 10 eth and above.

Analysis of NFT buyers shows a significant increase in returning buyers this week, but first-time buyers have decreased and are at their lowest point.

From an overview of the NFT market, the floor price of blue-chip NFTs has generally fallen this week, returning to levels from two weeks ago. Azuki fell 5.28%, MAYC fell 8.07%, BAYC fell 3.48%, and Milady fell 16%.

VI. Latest Project Financing

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