BTC and ETH Overview This Week

Market Performance

The crypto market experienced wide fluctuations this week, with all sectors underperforming the broader market.

Key Events

Mtgox Payout Incident

• Overview: The bankruptcy payout process of Mtgox continues. This week, 10,000 BTC were transferred from their address to an exchange in preparation for compensation, leaving 80,128 BTC remaining in the address.
• Analysis: Although the BTC price did not show significant fluctuations when the payout plan began, other uncertainties emerged in the market this week. As these factors increased, market buying power decreased, and the Mtgox payout incident began to impact market prices.

US Presidential Election

• Overview: This week, Biden announced his withdrawal from the race, endorsing Harris for the election. Harris’s approval ratings have been rising.
• Analysis: Before Biden’s withdrawal, the market generally believed that Trump could defeat Biden and win the election. However, Biden’s withdrawal has introduced more uncertainty into the US presidential election. Harris, besides being the current Vice President, is also an Indian-American woman, gaining significant support in votes. As Harris’s approval ratings continue to climb, confidence in Trump’s victory has waned, leading some investors to adopt a wait-and-see approach to mitigate risks.

Approval of ETH Spot ETF

• Overview: Nine institutions’ ETH spot ETFs were approved in the US on Tuesday and began trading on Wednesday.
• Analysis: With the approval of the ETH spot ETFs on Tuesday, the anticipated event finally materialized. Following the approval, ETH’s price experienced a significant pullback as predicted by the market, with investors engaging in a “sell the news” response. Additionally, Grayscale’s ETF saw large outflows after approval, redirecting to other traditional institutions’ ETFs. The continuous decline in ETH’s price indirectly led to a market crash, exacerbating fear among investors.

Significant Decline in US Stock Market

• Overview: This week saw a substantial decline in the US stock market, with noticeable drops among the seven major tech giants.
• Analysis: The US stock market entered the Q2 earnings season this week. As earnings reports were released and generally fell short of expectations, various stocks experienced varying degrees of decline. The major tech giants also saw significant drops, with their price-to-book ratios at historical highs, generally exceeding 30. The downturn in the US stock market also indirectly contributed to the decline in the crypto market.

Altcoin Overview This Week

Overall Performance

Market sentiment has plummeted to 42% this week, entering the fear stage, compared to last week’s 90% — a significant pullback. This is mainly due to uncertainties around various macroeconomic and policy factors, a sharp correction in the US stock market, and the market’s reaction to the Mtgox payout incident. Additionally, the “sell the news” phenomenon following the approval of the ETH spot ETF and the outflow from Grayscale’s ETF have greatly impacted Altcoins. The drop in ETH prices has significantly affected Altcoins, leading investors to adopt a risk-averse, wait-and-see approach.

Top Gainers Overview

In the past week, the top 5 tokens by price increase (excluding low-volume tokens and meme coins) are listed below, with data sourced from CoinMarketCap.

The top gainers did not exhibit “sector concentration,” as the rising tokens were dispersed across various sectors, and their gains were lower than last week’s. This indicates that Altcoins underperformed the broader market this week, experiencing a significant pullback.

Meme Token Gainers

This week, the broader market exhibited wide fluctuations. The meme token sector performed well in the first half of the week but declined alongside the broader market after Tuesday. Compared to last week, the gain trend has decreased.

Social Media Trends

Based on daily top five growth data from LunarCrush and top five AI scores from Scopechat, the statistics for this week (7.20–7.26) are as follows: The most frequently appearing theme was Layer 1 (L1) blockchains. The tokens on the list are as follows (excluding low-volume tokens and meme coins):

Theme Tracking

From the table above, it is evident that, based on weekly returns, the best-performing sector is Payment, while the worst-performing sector is GameFi.

In the Payment sector, XRP has the largest share, reaching 66.93%. On the 26th of this week, XRP’s strong performance was attributed to market speculation that it might settle with the SEC following a closed-door meeting. As a result, XRP remained strong and increased by 3.15% this week, driving the entire payment sector upward. Other tokens in the sector performed modestly, following the broader market’s fluctuations, making the Payment sector the standout performer among all sectors.

The GameFi sector has performed poorly this year, not following the broader market trends. Unlike previous years, on-chain games have not shown significant excitement this year. Particularly, the current APY for GameFi is not high, and player rewards are not comparable to those of meme tokens, leading to a substantial decline in market attention. This year, the only somewhat popular project in GameFi is the clicker game on TON. Although it falls under the GameFi category, it is often considered part of the TON ecosystem. Therefore, GameFi has not garnered much market attention and has seen limited capital involvement.

Upcoming Crypto Major Events

• Monday, July 29: TOKYO UNBOXED — EMBARKING ON JAPAN’S WEB3 JOURNEY
• Wednesday, July 31: US July ADP Employment Report; First Malaysia Blockchain Week
• Thursday, August 1: Federal Reserve FOMC Meeting; US July ISM Manufacturing PMI
• Friday, August 2: US July Unemployment Rate; US July Seasonally Adjusted Non-Farm Payrolls

Outlook for Next Week

• Bitcoin (BTC): The Mtgox payout continues, with 80,128 BTC remaining in the address. Due to increased uncertainty from recent macro events and the downward trend in US stocks, market liquidity is poor, and investors are becoming more cautious, leading to insufficient market buying power. As a result, BTC is likely to continue its wide fluctuations next week.
• Ethereum (ETH): The ETH spot ETF has been approved. Investors have begun to “sell the news,” and Grayscale continues to act as a significant market seller, leading to substantial selling pressure on Ethereum in the short term. Combined with overall low market sentiment, this has resulted in a significant pullback. Ethereum is expected to stabilize and potentially recover next week.
• Altcoins: With increased uncertainty from various market events and the significant impact of Ethereum’s price decline, along with poor performance from the broader market, investor sentiment has sharply declined. Investment in various tokens has become more cautious. Additionally, there are no new hot sectors or events emerging, so Altcoins may continue to follow broader market trends without independent momentum next week.