Market Overview
Market Overview
The cryptocurrency market showed a downward trend this week, with BTC falling. Ethereum, however, remained relatively strong, experiencing a volatile upward trend. Most Altcoin followed BTC's downward trend. The market sentiment index plummeted from 59% last week to 27.81%, entering a bearish range overall.
Stablecoin Market Dynamics
The total market value of stablecoins continued to grow, but the rate of growth slowed significantly, showing a trend of USDT increasing and USDC decreasing:
USDT: Market capitalization reached $163.8 billion, up 0.74% week-over-week, continuing its rapid growth. Although weekly incremental funds decreased compared to last week, they still remained above $1 billion, indicating a decrease in the intensity of capital inflows this week.
USDC: Market capitalization is $64 billion, down 1.68% week-on-week, ending a three-week upward trend and starting a larger downward trend, reaching $1.1 billion.
This phenomenon deserves investors' attention: USDT has continued to grow by more than US$1 billion per week in the past five weeks, indicating that institutional funds mainly from non-US users are still increasing their entry into the market; while USDC has fallen sharply, reflecting that US investors have ended their recent Fomo sentiment and have taken risk-averse actions because recent macroeconomic data is not ideal. This signal needs to be continuously monitored.
Market driving factor analysis
Impact of strong economic data: Wednesday’s ADP employment and GDP data exceeded expectations, showing that the US economy remains strong, which is not conducive to the Fed’s decision to cut interest rates.
The Fed’s hawkish stance: Powell’s hawkish remarks after the interest rate meeting caused the market’s expectations for a September rate cut to drop to 50%, and expectations for an October rate cut were abandoned.
Inflation remains stubborn: The core PCE price index remained at 2.58% in June, higher than the expected 2.7%, and showed no signs of a downward trend, further affecting expectations of a rate cut.
· Earnings report falls short of expectations: Coinbase’s second-quarter earnings report released after the market closed on Thursday fell short of market expectations, driving Crypto prices down.
Institutional demand support: ETH whales and listed companies continue to purchase ETH, which has stabilized market prices and sentiment to a certain extent.
International trade and political factors
Trade easing: The US and China reached a 90-day tariff freeze, while the US reached a tariff agreement with the EU, which had a positive impact on market sentiment.
Forecast of key events next week
Lack of macroeconomic data: With no major macroeconomic data releases next week, the market focus will shift to institutional buying.
Institutional purchasing power: Continue to monitor the purchases of BTC and ETH by listed companies and ETFs. Weakening purchasing power could lead to a market correction.
Investment strategy recommendations
Maintain a cautious stance: Investors should remain cautious in the current market environment.
Preventing “black swans”: Be prepared to respond to potential risk events.
Pay attention to institutional trends: Closely track the purchases of BTC and ETH by large institutions as an important indicator of market direction.
Market Outlook
Against the backdrop of the Federal Reserve's hawkish stance and stubborn inflation, the crypto market is likely to remain volatile in the short term. The Fed's cautious approach to the timeline for rate cuts will be a key factor influencing the market in the coming months. In particular, the reduction in the probability of a September rate cut from certainty to a 50% probability has already significantly dampened market risk appetite. Meanwhile, Coinbase's earnings report dealt a devastating blow. Institutional capital flows will be a key support for market stability. Currently, continued buying by ETH whales and publicly listed companies has provided some cushion, but if this trend weakens, a larger correction could be triggered. Especially when technical indicators already indicate the need for a correction, a decline in institutional buying could accelerate downward pressure.
The easing of international trade relations is one of the few positive factors currently. The temporary suspension of US-China trade tariffs and progress on a US-EU tariff agreement are helping to improve the global economic outlook and indirectly support risky assets. However, whether this positive factor can offset the negative impact of the Federal Reserve's hawkish stance remains to be seen.
Overall, the market may enter a period of consolidation, awaiting clearer signals on monetary policy. Investors should be prepared to hold positions for the medium to long term while maintaining sufficient liquidity to weather potential volatility. In the absence of a major catalyst, the market may take longer to digest previous gains and build momentum for the next phase of the rally.
Next week's forecast
Bearish targets: ATA, MOVE
ATA: Marginalized projects in the privacy track face dual challenges of unlocking selling pressure and fundamentals
Project fundamentals and positioning
Automata Network is a decentralized platform focused on privacy protection and cross-chain integration in the blockchain and Web3 space. Through its decentralized middleware protocol, it provides the infrastructure for building Web3 applications, with a particular emphasis on privacy and security. It aims to address key blockchain issues such as privacy, security, and interoperability.
Industry ecology and market position continue to weaken
The privacy track has a marginalized market positioning: The privacy track in which Automata Network is located is a niche area in the Crypto market. It has been on the edge of the market for a long time and has failed to gain attention and capital injection from the mainstream market.
Insufficient ecological integration: Although privacy technology has its application value in the Web3 field, Automata Network has failed to form an effective integration with the mainstream public chain and DeFi ecosystem, limiting its application scenarios and user base.
Fundamental data has deteriorated significantly
On-chain activity is close to stagnant: On-chain data shows that the number of on-chain proofs generated by the Automata Network project is only 20 per day. This core indicator directly reflects the platform usage rate, indicating that there are almost no active users on the chain.
· Extremely shrinking capital inflow: On-chain ETH deposit data shows that Automata Network has less than 1 ETH deposit inflow per day, reflecting that investor confidence in the project has dropped to a freezing point.
Low cross-chain application usage: Across all supported chains, Automata Network’s cross-chain integration feature only sees 68 transactions per day, indicating that the project’s actual application value and user base have almost disappeared in the entire Crypto ecosystem.
Token unlocking risk assessment
Unfavorable unlocking scale and timing: 25.22 million ATA tokens will be unlocked on August 6, accounting for 2.52% of the total locked supply, at a critical time when the project's fundamentals continue to deteriorate.
- The market's ability to absorb the tokens is seriously insufficient: The average daily trading volume of ATA tokens is only about US$700,000. The market liquidity is obviously insufficient to effectively absorb the amount of tokens to be unlocked, which will create significant selling pressure.
- Unlockees have strong incentives to sell: According to the linear unlocking plan, this unlocking phase primarily involves investment institutions and project teams. Given the project's current downturn, these holders have strong incentives to cash out and are likely to sell.
- Weak liquidity depth: The relatively small daily trading volume reflects insufficient market depth, which cannot effectively buffer the price impact caused by token unlocking.
Summarize
The Automata Network project faces multiple systemic risks: Market-wise, the overall appeal of the privacy sector is limited, and the project has failed to establish a leading position in this niche. Business-wise, on-chain activity has nearly stagnated, user activity is extremely low, and capital inflows are negligible. Furthermore, the upcoming unlocking of 25.22 million ATA tokens on August 6th will create significant selling pressure in a thinly liquid market with an average daily trading volume of only $700,000. Furthermore, the unlocking entities are primarily investment institutions and teams, with a strong incentive to cash out. These multiple negative factors are exerting sustained negative pressure on the ATA token price, making it difficult to reverse the downward trend in the short term.
MOVE: The Move language L2 project is facing a double crisis of collapsing fundamentals and selling pressure from unlocking tokens.
Project fundamentals and positioning
Movement is an Ethereum Layer 2 (L2) based on the Move editing language. It aims to bring the security and performance of the Move language to various blockchain ecosystems, including Ethereum. It builds an L2 solution to enhance the Ethereum network, improving transaction speed and efficiency while addressing issues such as scalability, interoperability, and security vulnerabilities.
Deteriorating market environment
-The value proposition of the L2 track is questioned: In the past year, the L2 track as a whole has been criticized by the market. It is believed that not only has it failed to bring the expected prosperity to Ethereum, but it has also led to the fragmentation of the Ethereum ecosystem. Movement, as a project on this track, has also been negatively affected.
- The overall track lacks a wealth effect: L2 ecological projects have failed to generate significant wealth creation effects in the recent market cycle, resulting in a decrease in investor interest and Movement failing to gain sufficient market attention and capital injection.
- Unfavorable market competition: In the crowded L2 market, Movement has failed to establish a clear differentiated advantage. Under the pressure of leading L2 projects such as Arbitrum and Optimism, its market share continues to shrink and its ecological development momentum is insufficient.
Fundamental data has deteriorated significantly
-TVL plummets: Movement's TVL has dropped sharply from its historical high of $166 million to $81.5 million, a drop of 50.91%, clearly reflecting that users are withdrawing from the Movement ecosystem on a large scale.
- The market capitalization of stablecoins continues to shrink: The market capitalization of on-chain stablecoins has dropped from US$34.98 million to US$30.8 million in the past month, a decrease of 11.95%, indicating that funds are continuing to flow out of the Movement ecosystem and market confidence is constantly weakening.
On-chain activity has almost stagnated: On-chain fee data shows that Movement's daily transaction fees are only between $10-20, which is at an extremely low level, directly reflecting the very low on-chain activity of Movement.
-DEX trading volume continues to decline: On-chain DEX trading volume has shown a continuous downward trend, currently maintaining at only US$4.66 million/day, indicating that on-chain trading activity continues to decline.
- Ecosystem project revenue is extremely low: The total daily revenue of all application projects on the Movement chain is only about US$2,000 and continues to decline, indicating that the ecosystem is on the verge of decline.
- New users have completely stagnated: On-chain data shows that Movement has had no new users entering the market recently, indicating that market interest in the project has dropped to a freezing point and user growth has completely stagnated.
Token unlocking risk assessment
Unfavorable unlocking scale and timing: 50 million MOVE tokens will be unlocked on August 8th, representing 1.5% of the total locked supply, at a critical time when the project's fundamentals continue to deteriorate.
- Severely insufficient market capacity: The average daily trading volume of MOVE tokens is only around $2.9 million. Market liquidity is clearly insufficient to effectively absorb the amount of tokens that will be unlocked, which will create significant selling pressure.
Unlockees have strong incentives to sell: Based on the linear unlocking plan, this unlocking phase primarily involves institutional investors and project teams. Given the project's current downturn, these holders have strong incentives to cash out and are likely to sell.
Weak liquidity depth: The relatively small daily trading volume reflects insufficient market depth, which cannot effectively buffer the price impact caused by token unlocking.
Summarize
The Movement project faces multiple systemic risks. Market-wise, the overall L2 track is facing skepticism, failing to deliver the expected value to Ethereum and lacking a wealth effect. Business-wise, the project's TVL has plummeted by 50.91%, its stablecoin market capitalization has shrunk by 11.95%, on-chain fees are only $10-20 per day, DEX trading volume continues to decline, ecosystem revenue is only $2,000 per day, and new user growth has completely stagnated. Capital-wise, the upcoming unlocking of 50 million MOVE tokens on August 8th will create significant selling pressure in a thinly liquid market with an average daily trading volume of only $2.9 million. Furthermore, the unlocking will primarily be done by investment institutions and teams, with a strong incentive to cash out. These multiple negative factors are exerting sustained negative pressure on the MOVE token price, making a short-term downward trend unlikely to be reversed.
Next week’s token unlock schedule (amounts exceeding $1 million)
Market Sentiment Index Analysis
The market sentiment index fell from 87% to 59%, BTC fell 2.72% this week, ETH rose 1.36% this week, TOTAL3 fell 2.21% this week, and Altcoin as a whole entered the bearish range.
This week's hot projects
Ethena Ecosystem Analysis: USDe Market Share Expansion and Steady Growth in the Stablecoin Sector
Recently, with the passage of the GENIUS Act in the United States, the market has been heatedly discussing stablecoin projects, and the market's attention has begun to shift to stablecoin projects. At the same time, the market has been in a volatile range this week, and most altcoin projects have been in a volatile downward trend. However, Ethena has seen a strong rise, and its performance is very strong compared to other Altcoins, which has attracted widespread attention from the market.
On-chain data analysis
TVL
Due to the recent rapid rise in ETH prices, we calculate Ethena's TVL using ETH as the unit. This shows a rapid increase in TVL, from a short-term low of 1.65 million ETH to 2.19 million ETH, a 30.91% increase. In US dollar terms, it has surpassed $8 billion, reaching a new all-time high and demonstrating the project's strong appeal.
Fees
As can be seen from the above figure, Ethena's Fees are increasing week by week, especially in recent weeks, with a more significant increase, reaching a recent high of US$19.68 million. This data shows that Ethena's user base is continuing to expand and the platform activity is constantly increasing.
On-chain capital flows
As can be seen from the above figure, Ethena's on-chain funds have been maintaining a large-scale inflow recently, with an average daily inflow of more than US$300 million, indicating that the market's confidence in USDe continues to increase and investors are optimistic about its prospects.
USDe Supply
As can be seen from the above figure, the supply of USDe has suddenly increased rapidly in recent times, reaching US$7.839 billion, setting a historical high. The growth rate in the past month was 47.93%, reflecting a significant increase in market demand for USDe.
Comparison of major decentralized stablecoins
As can be seen from the data in the above figure, the APY of sUSDe has recently dropped to 10.24%, but its APY still remains at the forefront of the returns of major decentralized stablecoin projects, and its scale is the largest of all mainstream decentralized stablecoins, reaching US$5.012 billion.
sUSDe's weight
As can be seen from the above figure, the proportion of sUSDe has exceeded that of USDe, accounting for 53.4%. It can be seen that most users use USDe to obtain stablecoin returns, and the number of users who actually use USDe for on-chain transactions is not the majority.
USDe trading volume and number of buyers
As can be seen from the above chart, USDe's trading volume has increased significantly in the past month, reaching $1.79 billion, second only to November 2024. The number of purchasing users has also increased significantly, reaching 16,016, indicating that new funds and users have been entering the market recently.
USDe volatility
As can be seen from the figure, the volatility of USDe has remained very stable, with no obvious decoupling, demonstrating excellent stability, which is one of the core competitive advantages of stablecoin projects.
Summarize
Ethena and its stablecoin, USDe, have demonstrated outstanding performance and strong growth potential in the current crypto market. Leveraging the favorable policies of the US GENIUS Act, Ethena has successfully capitalized on the growing market demand for stablecoins, achieving comprehensive increases in TVL, trading volume, and user base. $8 billion in TVL, $7.8 billion in supply, and continued large-scale capital inflows underpin Ethena's steady growth. sUSDe's market share exceeding 53% reflects user acceptance of its yield model, while its leading APY of 10.24% continues to attract yield-oriented investors. Furthermore, USDe's exceptional price stability has earned market trust and become a core competitive advantage.
As stablecoins continue to gain importance in the crypto ecosystem, Ethena is expected to continue expanding its market share and solidifying its leading position in the decentralized stablecoin space. However, the project must remain vigilant to potential risks such as changing regulatory environments and intensified market competition, and continuously optimize its products and services to maintain long-term sustainable development.
Overall overview of market themes
Based on weekly returns, the SocialFi track performed best, while the AI track performed worst.
SocialFi: TON and CHZ account for a large proportion of the SocialFi track, totaling 96.05%. This week, their gains and losses were 11.83% and -7.96%, respectively. Because TON accounts for a large proportion of the SocialFi track, accounting for 91.93%, TON's rise has driven SocialFi's performance better than other tracks, making the SocialFi track the best performer.
AI Track: TAO, RENDER, WLD, and FET account for a large proportion of the AI track, totaling 75.61%. This week, their price fluctuations were -15.16%, -9.36%, -12.78%, and -7.63%, respectively. It can be seen that the performance of these projects is lower than that of projects in other tracks, making the AI track the worst performer.
Crypto Events Next Week
Solana Mobile's second phone, the Seeker, began shipping on Monday (August 4).
Tuesday (August 5) 2025 Blockchain Science Conference
Thursday (August 7) U.S. initial jobless claims for the week ending August 2
Summarize
The cryptocurrency market saw a downward trend this week, with ETH showing volatile movements while Bitcoin and most Altcoin emerged from a volatile decline. The market sentiment index fell from 59% to 27.81%, entering bearish territory. Stablecoin market growth slowed, with USDT's market capitalization reaching $163.8 billion, a weekly increase of 0.74%. USDC's market capitalization reached $64 billion, down 1.68% from the previous week, ending a three-week upward trend. Multiple factors influenced the market: US employment and GDP data exceeded expectations, while hawkish comments from Federal Reserve Chairman Jerome Powell lowered expectations for a September rate cut to 50%. The core PCE price index remained at 2.58%, showing no signs of decline. Coinbase's weaker-than-expected earnings report also contributed to the overall market decline. On the positive side, the US and China reached a 90-day tariff suspension, while the US also reached a tariff agreement with the EU. Continued buying by ETH whales and publicly listed companies stabilized market sentiment to some extent.
The Ethena ecosystem performed particularly well this week, successfully capitalizing on the growing market demand for stablecoins. USDe supply surged to a record high of $7.839 billion, representing a 47.93% increase over the past month, far outpacing other stablecoin projects. Ethena's TVL (TVL) surpassed $8 billion, rising 30.91% from a recent low of 1.65 million ETH to 2.19 million ETH. On-chain fund flows show that Ethena maintains a significant daily inflow of over $300 million, reflecting continued market confidence in USDe. Notably, sUSDe now accounts for 53.4% of the total, exceeding USDe itself, indicating that most users primarily use USDe for stablecoin yields. While its APY of 10.24% has declined, it still leads the pack among major decentralized stablecoins. USDe's trading volume has reached US$1.79 billion in recent months, and the number of purchasing users has increased to 16,016. At the same time, it has maintained excellent price stability and no obvious decoupling has occurred, consolidating its leading position in the field of decentralized stablecoins.
In the short term, the crypto market is likely to continue its volatile consolidation, with the Federal Reserve's cautious approach to the timeline for rate cuts being a key factor. Institutional flows are a key support for market stability. Currently, continued buying by ETH whales and publicly listed companies is providing a buffer, but if this trend weakens, a larger correction could be triggered. While the easing of international trade relations is a positive factor, whether it can offset the negative impact of the Fed's hawkish stance remains to be seen. Investors should plan for medium- to long-term holdings while maintaining sufficient liquidity to weather volatility. In the absence of a major catalyst, the market will need more time to digest previous gains and build momentum for the next phase of the rally. Overall, investors should maintain a cautious stance, guard against "black swan" events, and closely monitor institutional buying of BTC and ETH as a key indicator of market direction.
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