Overview of BTC and ETH This Week

Market Performance

The crypto market lacks profit-making effects, and coupled with the continuous selling pressure on BTC, the overall price performance is poor.

Key Events

Mtgox Compensation Event

Overview: The Mtgox bankruptcy compensation plan is set to distribute 140,000 BTC and BCH to victim users starting in July 2024. However, the details and dates of the compensation have not been announced, causing market panic due to the uncertainty.

Latest Development: On July 5th, Beijing time, 47,000 BTC were moved from cold wallets, sparking speculation that the compensation distribution might start this Friday.

Analysis: The buy-in price for Mtgox victims was extremely low. Based on a compensation ratio of 16%, converted to the quantity held before the theft, their holding cost ranges from $100 to $5,800. At the current price of $57,000, the profit multiples remain significant. Therefore, the market fears that once compensated, victims may immediately sell off to realize their profits. Coupled with the overall poor market liquidity, it may not be able to absorb such significant selling pressure, severely dampening short-term buying expectations of investors.

U.S. Government, German Government

• Overview: This week, continuous selling activities by the U.S. and German governments have exacerbated market panic.
• Analysis: Although the sell-off quantities by the U.S. and German governments are not large. In the context of poor market liquidity and the Mtgox bankruptcy compensation event, these selling actions have intensified market panic. Consequently, many investors have followed suit, leading to a decline in the overall market.

Approval of ETH Spot ETF Expected Next Week

• Overview: The approval of the ETH spot ETF was delayed due to the U.S. Independence Day holiday. The market now expects approval to happen around July 15.
• Analysis: The price fluctuation of ETH has shifted to follow BTC. The positive impact of this event is fading.

U.S. June Unemployment Rate and Nonfarm Payrolls

• Overview: At 20:30 Beijing time on Friday, the U.S. will release the June unemployment rate and seasonally adjusted nonfarm payrolls.
• Analysis: The Federal Reserve closely monitors the unemployment rate and nonfarm payroll data. Although the dot plot indicates only one 25 basis point rate cut this year, the market generally expects two rate cuts. This leads to intense market speculation about the number of rate cuts. Therefore, any macroeconomic data that could influence the Federal Reserve’s rate cut decision will attract significant market attention before September.

Many Bitcoin Mining Machines on the Verge of Shutdown

• Overview: With the recent two-week decline in BTC prices, the total network hash rate has dropped to 588 EH/s, and the network difficulty has decreased from 88.11 T to 79.56 T, indicating that a considerable number of mining machines across the network have started to shut down.

• Analysis: Currently, only 11 types of mining machines remain operational in the market, with some even shutting down at a BTC price of 27.5J. According to historical data analysis, BTC prices have entered a phase of cyclical lows.

Overview of Altcoins This Week

Overall Performance

The market sentiment has sharply declined with the overall market prices, and the current market sentiment index has returned to the extreme panic stage. Investors should closely monitor whether Altcoins will experience an oversold rebound in the near term.

Overview of Top Gainers

Top 5 performing tokens in the market over the past week (excluding tokens with shallow trading volume and meme coins), data sourced from CoinMarketCap.

The list of top gainers did not show a ‘sector concentration’ feature; the rising tokens were scattered across various sectors, primarily consisting of tokens with smaller market caps.

Meme Token Gainers List

Due to the overall market weakness this week, speculation in the Meme token sector continues to cool down. Comparing the gains this week to last week, there continues to be a decrease in momentum.

Social Media Hot Topics

According to data from LunarCrush’s top five daily growth and Scopechat’s top five AI scores from this week (June 29th to July 5th):

The most frequent theme is AI. Listed token situations are as follows (excluding tokens with very low trading volume and meme coins):

Theme Tracking

According to the weekly return rates, the best-performing sector is SocialFi, while the worst-performing sector is AI.

The SocialFi sector’s strong performance is primarily due to the limited number of projects tracked in the SocialFi index, with TON accounting for the largest proportion, holding 93.77% of the index’s market cap weight. This week, TON only dropped by 5.86%, which is lower than BTC’s decline. Recently, TON’s mini-game has attracted significant traffic and attention, amidst a generally poor profitability environment in Crypto, prompting users to prefer focusing on SocialFi projects in pursuit of high returns. Looking at annual return rates, TON stands out with an impressive 429.85%, solidifying its leadership position in the SocialFi sector.

In contrast, the AI sector is facing challenges as the leading project WLD is about to experience a significant unlocking event. Market investors have expressed strong dissatisfaction, impacting the overall performance of the AI sector.

Next Week’s Crypto Major Events

• Monday (July 8): The U.S. Securities and Exchange Commission (SEC) requires Ethereum ETF issuers to address modification feedback and resubmit Form S1 by July 8.
• Wednesday (July 10): Infra Summer 2024
• Thursday (July 11): U.S. June CPI (seasonally adjusted annual rate); U.S. June CPI (seasonally adjusted monthly rate)
• Friday (July 12): Motion hearing for Tornado Cash co-founder Roman Storm scheduled at the U.S. Southern District Court of New York; ETHGlobal Brussels

Outlook for Next Week

1. Bitcoin: Details and timing of Mtgox distribution will eventually be finalized, gradually reducing its impact on the market.
2. Ethereum: Market expectations are adjusting the ETH spot ETF launch to around July 15, with attention to whether ETH ETF trading will begin next week.
3. Altcoins: Due to ongoing effects from the Mtgox event, U.S. and German government sell-offs, poor market liquidity, and panic sentiment continue to spread. A favorable market entry point is unlikely in the near term.