You are reading the weekly industry highlights report generated for you by Gate.io AI Lab. Get a glimpse of the market trends and important events worth following this week, and receive investment analysis and financial strategies recommended for you.
Word Count: 11303 Characters | Reading Time: 19.1 Minutes.
Table of Contents:
Market trends
Fundamentals, price Fluctuation analysis
Hot Topics
Main Events
Global Policies
Investment Analysis
1. Market Overview
1.1. Market Sentiment
This week, the total Market Cap of Digital Money reached $2.18 trillion, with a rise of 1.39% compared to the previous period. The exchange volume rose by 3.21% compared to the previous period, reaching $1.02 trillion. BTC price fluctuated around $64,000, showing a Sideways trend overall. ETH price is running above $1,800 with active trading.
Today's market sentiment is greedy, with a fear and greed index of 60, indicating an overall optimistic market sentiment.
Crypto & Tradition Overview as of 10am UTC+8, Jul 19
1.2. Macroeconomic Impact
Recent data suggest that the pace of the global economic recovery has slowed and inflationary pressures persist. Eurozone CPI pumped 5.5% year-on-year in June, higher than expectations of 5.1% and the highest since records began in 1985. United States CPI pumped 3.0% year-on-year in June, in line with expectations but still at a high level. The Fed will hold its Intrerest Rate decision meeting at the end of July, and the market expects the Fed to raise interest rates by another 25 basis points, with a 70.2% probability that the Intrerest Rate range will reach 5.25%-5.50%.
Producer Price Index (PPI) and Consumer Price Index (CPI) remain high, reflecting sustained inflationary pressure. Eurozone's PPI rose by 25.6% year-on-year, hitting a historical high in June. The US PPI increased by 0.1% in June, lower than the expected 0.2%, but still at a high level. Purchasing Managers' Index (PMI) indicates a slowdown in economic activity. In June, Eurozone's Manufacturing PMI stood at 43.4, marking the sixth consecutive month in contraction territory. The US Manufacturing PMI for June was 46.0, also below the 50 threshold indicating contraction.
Overall, high inflation will force major Central Banks to continue raising interest rates to control inflation expectations. However, excessive rate hikes may pose the risk of a hard landing for the economy. The Cryptocurrency market may continue to experience fluctuations in the short term due to macroeconomic conditions.
1.3 Economic Calendar
Analysis and Summary:
The Richard Manufacturing Index, released on July 24, reflects the state of the manufacturing industry. Last month's data was -7.0, indicating that the manufacturing industry is in a contraction phase. If this month's data continues to be weak, it will increase the risk of an economic recession.
2. The US June new home sales annualized data announced on July 25th is an important indicator of the real estate market conditions. It is expected to decline slightly to around 670,000 households. If the data is significantly lower than expected, it will intensify concerns about the economic outlook.
3. The annualized seasonally adjusted data for US GDP in the second quarter announced on July 26th and the annual core PCE price index data are extremely important, and will directly influence the Fed's monetary policy orientation. The market expects the annual GDP rate to fall to around 1.8%, and the annual core PCE price index to decrease slightly to 4.6%. If the actual data is lower than expected, it will increase the possibility of a Fed rate cut in September.
Overall, the macroeconomic data released this week will provide important reference for the decision of the Federal Reserve's September policy meeting. The market will closely follow the changes in data in areas such as GDP, inflation, and manufacturing to assess the actual economic fundamentals.
2. Analysis of Fundamentals and Price Fluctuation
2.1. Price Fluctuation Analysis
BTC weekly Volatility
Based on the daily Closing Price of BTC in the past week, the weekly Volatility of BTC is 2.35%.
Price Fluctuation Analysis
This week, the price of BTC fluctuated within the range of $63,000 to $65,000. The price pump was mainly driven by continued buying from institutional investors and the approval of the ETH spot ETF, which brought favorable information. However, the distribution of compensation to Mt. Gox creditors also brought certain selling pressure.
volume Impact
The average daily volume of BTC this week is about $5 billion, an increase from last week. The increase in trading activity reflects the market's divergent sentiment, with some investors taking advantage of the opportunity to profit and others continuing to go long.
Market activity and price direction
Despite the increase in volume, the price is still hovering within a range. Market participants have different opinions on the future, waiting for further Favourable Information or Unfavourable Information to emerge. If BTC can effectively break through the $65,000 barrier, it will open up room for further pump.
2.2. Analysis of Financial Position
According to the latest fund flow data, we can see that there are some differences in the inflow and outflow of major cryptocurrencies. BTC and Ethereum, as the leaders in the cryptocurrency market, are worth paying special attention to their fund flow situation.
BTC Funds Flow
Data shows that the net inflow of funds into BTC was approximately 960 million US dollars last week. This indicates that institutional investors and Large Investors may be accumulating at the lows and increasing their BTC positions. However, at the same time, the outflow of funds from retail investors has also increased, reflecting some investors' concerns about the recent price Fluctuation.
ETH Fund Flow
On the ETH front, the net inflow of funds is about $516 million. In contrast, the outflow of funds from retail investors is relatively small. This may indicate that institutional investors are optimistic about the long-term prospects of Ethereum and are buying the dips when the price pulls back.
Other Cryptocurrency
In addition to the flow of funds for BTC and ETH, the flow of funds for other cryptocurrencies is also worth following. For example, the significant net inflows of funds for tokens such as MATIC, FTM, and NOT reflect investors' positive expectations for these tokens.
Overall, despite recent Fluctuation in the Cryptocurrency market, the net inflow of funds from institutional investors and Large Investors remains relatively strong. This may indicate an increase in market activity and a potential Rebound in prices. However, investors still need to closely follow market trends.
2.3. Smart Money Analysis
The flow of clever money often predicts market trends. By analyzing the changes in large orders and trading volume, we can observe the movements of institutional investors.
BTC
In recent weeks, the large single transaction volume of BTC has increased, indicating that institutional investors are gradually Building a Position. This means that the support strength of BTC may be enhanced in the future.
ETH
Similar to BTC, ETH's large orders Trading Volume is also on the rise, indicating that institutional investors are increasing their holdings of ETH. However, the selling pressure on ETH has also increased, and some volatility is expected in the future.
AltCoin
Overall, the Trading Volume of AltCoins' large orders is relatively low, reflecting a lack of interest from institutional investors. However, there has been an increase in the Trading Volume of certain popular AltCoins' large orders.
Overall, institutional investors are gradually increasing their positions in mainstream currencies, and it is expected that mainstream currencies will remain strong in the future. However, it is also necessary to be cautious about the increase in selling pressure.
3. Hot Topics
Solana: The Next ETF?
The innovation of public chain technology may have become widely Consensus
Recently, the Crypto market has caused panic among investors due to the Mtgox compensation and the selling off of governments in the United States and Germany. The vast majority of Tokens have experienced a decline of more than 20%, but there are also some Tokens that are relatively "resilient" in price, and SOL is one of them. Solana, as a public chain project, adopts a Consensus Mechanism that combines delegation Proof of Stake (PoS) and Proof of History (PoH). It introduces the Timestamp mechanism and uses multi-threaded parallel processing and state compression technology to enable Solana to have the advantages of high throughput and low Transaction Cost.
Solana has successively released three innovative technologies, Actions, Blinks, and ZK Compression, expanding into the field of SocialFi and significantly compressing the existing Transaction Cost. These three new technologies will boost Solana's future development and bring new expectations to the market. In addition, with the application for spot ETF, Solana's future expectations and narratives are full of imagination and potential, which is further enhanced.
Actions, Blinks, and ZK Compression successively released articles. Is Solana becoming a leader in L1 technology innovation?
Solana breaks through the limits of the ecosystem and leads the wave of Web3 innovation
The Solana ecosystem is currently in a rapid development stage, with innovative applications emerging like bamboo shoots after a spring rain. Among them, Actions, Blinks, and ZK Compression, three disruptive technologies, are particularly noteworthy, and can be called the "three treasures" of the Solana ecosystem's new era.
Actions is a revolutionary API that allows websites to seamlessly integrate with the Solana blockchain, making on-chain activities easily accessible. This not only greatly enhances the convenience of Solana application development and user transactions, but also injects powerful momentum into the efficient execution of on-chain smart contracts, and lays a solid foundation for Solana's entry into the SocialFi field.
Blinks is a new primitive that transforms on-chain operations into shareable links, which can convert any Solana Actions into spreadable links rich in metadata. This not only greatly enhances user experience, but also effectively increases Solana's traffic and significantly lowers the barrier for users to participate in Web3.
ZK Compression, as a compression technology built on Solana, can help developers and users build applications on a large scale. It reduces the system state cost by orders of magnitude while maintaining Solana's excellent security, outstanding performance, and strong composability, injecting tremendous power into the vibrant development of the Solana ecosystem.
It is worth mentioning that Solana also employs a unique technology called "Turbo Transactions", which uses long CPU cores to process transactions in parallel, greatly improving network throughput and execution speed. This undoubtedly injects strong vitality into Solana and makes it an essential leader in the Web3 revolution.
"Solana uses a technology called Turbo Transactions, which utilizes long CPU cores to process transactions in parallel, in order to improve network throughput and execution speed." - Solana official documentation
It can be seen that the Solana ecosystem is undergoing an unprecedented breakthrough evolution. The emergence of disruptive technologies such as Actions, Blinks, and ZK Compression is driving Solana to ride the wind and waves, leading the Web3 era to a new era.
Solana ETF Attack: Injecting New Energy into the Solana Ecosystem
With the continuous development of the Solana ecosystem and the introduction of innovative technologies, the call for Solana ETFization is growing. Once the Solana ETF is approved, it will have a huge impact on the Solana ecosystem:
With the continuous development of the Solana ecosystem and the launch of innovative technologies, the calls for Solana ETFization are getting louder. Once the Solana ETF is approved, it will have a huge impact on the Solana ecosystem:
It will attract more long-term institutional funds and promote further development of the Solana ecosystem. The launch of the Solana ETF will allow more long-term institutional investors to participate in the construction of the Solana ecosystem, injecting strong financial power into the Solana ecosystem.
Ordinary investors can more easily invest in Solana, lowering the investment threshold. Through Solana ETF, ordinary investors can easily invest in the Solana ecosystem without directly purchasing SOL tokens, greatly increasing participation.
Innovative projects in the Solana ecosystem will receive more long-term funding support, which is conducive to technological innovation. The fund pool of Solana ETF will provide ample financial support for projects within the Solana ecosystem, injecting powerful momentum into technological innovation.
It is conducive to further enhancing Solana's position in the public chain field. The launch of Solana ETF will increase Solana's exposure and recognition in the entire cryptocurrency market, providing strong support for Solana's position and influence in the public chain field.
"Bloomberg analyst Eric Balchunas said that the ETH spot ETF will pave the way for similar products, such as Solana ETF, to be long."
It is worth mentioning that, according to Bloomberg analyst Eric Balchunas, the launch of ETH Spot ETF will pave the way for similar products such as Solana ETF to go long. This undoubtedly brings more possibilities for the future development of Solana ETF.
Can Solana become the next ETF?
The key factors determining whether the next SpotETF will appear are three key factors: regulatory policies, the degree of Decentralization, and market demand.
From the perspective of policy regulation, the main reason why Solana ETF will not be launched in the short term is that the path to launch a Spot digital asset ETF in the United States is clear: there needs to be a federally regulated futures market. After years of observation, such as the absence of price manipulation, then the futures ETF is approved, and finally the Spot is approved. Except for BTC and ETH, there is no other federally regulated futures market for ETFs. Therefore, according to the above path, there is a greater possibility that there will be no crypto spot ETF in the short term. However, the U.S. presidential election softened the Democratic Party's Crypto policy, and Trump's presidency may bring about more positive changes.
From the perspective of Decentralization, there are 3 indicators that can be used as measurement factors:
Nakamoto Coefficient: the minimum number of independent entities that could collude to attack the network
Staking Requirements: The difficulty of participating in the network as a Node operator or validators
CCData Governance Rating: Various governance measures
Taking into account these three metrics, Solana's level of decentralization is currently second only to Ethereum, and its potential is undoubtedly worth recognizing.
If we start from the market demand, Solana will receive a large amount of capital injection in the future, which will affect its market indicators such as Market Cap, volume, and Liquidity, and then create a domino effect, causing a butterfly effect on existing financial products such as Trust's Asset Under Management. The greater wealth effect will also drive the rise of various activity indicators, such as DAU, Followers, and Txns. Based on the current situation, Solana is second only to Ethereum.
Taking into account the two dimensions of Decentralization and market demand, the weighted total possibility score is obtained. The weight of Decentralization is 33%, and the weight of market demand is 66%. It is conceivable that in the eyes of Wall Street, what is most important. The total score is obtained, and the score of Solana spot ETF is second only to ETH, and it is significantly ahead of other crypto tokens. Therefore, GSR holds a very optimistic attitude towards the launch of Solana spot ETF.
And if the solana spot ETF is approved, how much can the Sol price rise?
Compared with BTC, BTC rose from around $27,000 in October 2023 when market participants began to believe that the US Spot ETF approval was possible, to around $63,000 in June 2024, achieving a 2.3x rise. Considering that Solana's Consensus will not be as strong as BTC, GSR has provided its own estimate:
The impact of Solana spot ETF on the value of Solana is 1.4 times in Bear Market, 3.4 times in volatile market, and 8.9 times in Bull Market.
Looking ahead, the Solana ecosystem is still full of infinite possibilities. With its high performance and low cost advantages, coupled with the continuous introduction of innovative technologies, Solana will surely occupy a more important position in the public chain field. In addition, popular zones in the Solana ecosystem such as DePIN, AI, and GameFi will also set off investment frenzy in the future. The future of the Solana ecosystem is bright and will become a leading force in public chain technology innovation.
4. Main Events
The following are the Top 10 events that have had a significant impact on the Cryptocurrency market in the past seven days:
2024-07-19 FATF will assess Argentina's Money Laundering risk
Argentine leaders will meet with the Financial Action Task Force (FATF) in Paris in October, where the FATF will continue to assess Argentina's money laundering and terrorism financing risks.
2024-07-19 BTCWhaleincrease the position215.49 pieces
According to on-chain data analysts, Whale, with a 100% success rate in two previous BTC waves over the past 11 months, has once again increased the position. 10 minutes ago, the Whale withdrew 215.49 BTC worth $14 million from Binance.
2024-07-19 EigenLayer has the largest net outflow in a single day
According to Block data, on July 11th, EigenLayer experienced the largest single-day net outflow in history, with a net outflow amount of over $135 million, equivalent to approximately 43,550 ETH at that time.
2024-07-19 BTC breaks through $64000
OKX-BTC/USDT is now at $63,947.70, with a 24-hour decrease of 0.61%.
2024-07-19 The entire network Get Liquidated nearly 29 million US dollars
According to Coinglass data, the total amount of Get Liquidated in the past 1 hour is $28.8869 million, of which $26.9047 million comes from long orders and $1.9821 million comes from short orders.
2024-07-18 Sanctum open CLOUD Airdrop application
Solana ecosystem Liquidity stake protocol Sanctum has officially launched the Airdrop application. Eligible users can claim it through the Jupiter LFG page. CLOUD is now available on Jupiter, with a current price of $0.3033.
2024-07-18 ETH drops below $3400
OKX-ETH/USDT is now at $3,410.15, down 1.67% in the past 24 hours.
2024-07-17 Coingecko announces the top ten tokens with the highest growth in the second quarter
Coingecko released the top ten Token information with the highest price increase in the second quarter, namely BRETT, TON, KAS, XMR, PEPE, JASMY, ENS, ONDO, WBT and BGB.
2024-07-17 Lambda announces strategic upgrade
The Ethereum-based Layer 2 project Lambda announced a million-dollar Airdrop plan, complete the tasks to qualify for the Airdrop for free, and will establish a new social and storage ecosystem.
2024-07-17 Bitwise CIO: BTC ETF purchases exceed mining volume
Bitwise's chief investment officer said that since the launch of the spot BTC ETF, the amount of BTC purchased by related funds has reached approximately 263,965, while the BTC output from BTCMinerMining during the same period is 129,281.
5. Global Policies
The following is a list of new political dynamics, economic policies or regulations related to the Cryptocurrency industry, and an analysis of their impact on the industry and the market, based on the news from July 12th to July 19th, 2024:
1. South Korea's first encryption currency law fully takes effect, with a focus on investor protection
On July 18, 2024, South Korea's first Cryptocurrency regulatory framework, the Virtual Asset User Protection Act, officially came into effect. The law imposes stricter requirements on digital asset exchanges, including storing at least 80% of user deposits in cold wallets, entrusting user cash deposits to licensed local banks for safekeeping, holding Cryptocurrency reserves equivalent to the amount and type of customer deposits, etc. Exchanges must also purchase sufficient insurance or establish reserve funds to deal with Hacker attacks or Liquidity crises.
Analysis: The purpose of this bill is to strengthen the protection of investor funds and improve the transparency and security of exchanges. This will be beneficial in attracting more long-term investors to the Cryptocurrency market in Korea and promoting the healthy development of the industry. However, it may also increase the operating costs and compliance pressure of exchanges.
2. Argentina implements new policies to encourage encryption investors to register encryption assets with the government
This week, the Argentine government signed a fiscal plan that includes a tax amnesty for individuals declaring $100,000 (including registered encryption assets). The chairman of the Argentine Securities Commission stated that this move can ease the pressure from the Financial Action Task Force (FATF) and prevent Argentina from being gray listed.
Analysis: The policy aims to regulate the Cryptocurrency market and curb illegal activities such as Money Laundering. Although it may increase Compliance costs for investors, it is conducive to attracting more long-term institutional investors into the Argentine Cryptocurrency market and promoting the development of the industry. It also helps the Argentine government to grasp the flow of Crypto Assets and strengthen regulation.
3. SEC Commissioner: The possibility of ETH ETF participation in stake can be reconsidered
US Securities and Exchange Commission (SEC) Commissioner Peirce said that the possibility of ETH ETF participating in stake can be reconsidered.
Analysis: If the SEC ultimately approves the ETH ETF participation in stake, it will further promote institutional investors' participation in the Ethereum ecosystem and promote the pump of Ethereum prices. At the same time, it will also promote the development of the Ethereum ecosystem, attracting more long applications and users to join.
Summary
Recently, countries and regions such as South Korea and Argentina have introduced new Cryptocurrency regulatory policies and regulations, mainly aimed at strengthening investor protection, curbing illegal activities, and attracting institutional investors. At the same time, the US SEC has also begun to reconsider the possibility of ETH ETF participation in stake. The introduction of these policies and regulations will further regulate the Cryptocurrency industry, promote its healthy development, attract more long-term investors and applications to join, and drive the development of the entire industry.
6. Investment Analysis
6.1. Investment Recommendation
The Cryptocurrency market has recently presented the following hot zones:
Artificial Intelligence (AI) zone: With the popularity of AI applications such as ChatGPT, AI-related cryptocurrencies like FET (Fetch.ai) are highly followed. FET, as the core token of ASI (Artificial Superintelligence) Alliance, is expected to pump further in the process of ASI Token merger.
Highly followed Meme coins: Trump's choice of JD Vance, a Cryptocurrency supporter, as his running mate has sparked a following of Meme coins like MAGA (Make America Great Again). These types of coins have high volatility and speculative nature.
Stable Coin: With the development of the cryptocurrency market, Stable Coins such as USDT have increasingly prominent roles in payments and transactions, becoming an important source of Liquidity.
BTC(BTC): As a leading Cryptocurrency, BTC's price action has always been followed. Recently, BTC's price has stabilized and is expected to break through to new highs, potentially triggering short positions squeeze.
5 recommended Cryptocurrencies with rise potential:
Disclaimer: The above recommendations are based solely on current market analysis and are not financial advice. Investors should bear their own risks.
6.2 Investment Strategy
Hot Token Analysis of the Week
BTC experienced its deepest pullback since the end of 2022 this week, with the trading price dropping below the 200-day moving average at one point. Despite this, compared to previous cycles, this pullback is still relatively shallow in history. Worldcoin (WLD) broke through $3.2 in a short-term squeeze and with upcoming token unlocks, pumping over 22.89% in a single day. Although Cardano (ADA) is pumping in price and is about to undergo a technical upgrade, it still faces bearish sentiment.
Trading Bot Strategy Analysis
The trading robot strategies on Gate.io exchange have shown mixed performance this week. The contract grid strategies have generally yielded high returns, with the turbo_usdt strategy reaching a return rate of 25895.13%. However, some spot grid strategies have lower returns, such as the btc_usdt strategy with only 65.50%. Overall, the high-risk high-return contract grid strategies have the advantage, while the low-risk low-return spot grid strategies are relatively lagging behind.
Summary
This week, the Cryptocurrency market has seen increased Fluctuation, with high-risk, high-yield quantitative strategies such as contract grid and Spot Martingale performing well, while low-risk, low-yield Spot grid and smart reallocation strategies have lagged behind. Investors can choose the appropriate quantitative trading strategy based on their risk preferences.
6.3. Financial Investment Products
Simple Earn is a financial product that allows you to earn interest on your idle funds and withdraw them at any time. Its main features include:
Match idle assets with users in need of borrowing, and users can set a minimum loan Intrerest Rate.
Whether to lend successfully and the interest rate is determined every hour based on the user's set interest rate and the actual borrowing needs.
Successful lending can earn Interest for that hour, and the Interest will be automatically reinvested.
Supports on-demand purchase and redemption, with immediate redemption proceeds.
The total amount of USDT in the Wealth Management of Gate.io is 352,694,924.86 USDT, with an estimated Annual Percentage Rate of 9.64% + 8.87%.
Wealth Management is a one-stop comprehensive wealth management service center, including current and fixed-term investment plans. The main features include:
Provide a variety of Digital Money financial products.
Financial management requires a Lock-up Position for a period of time, and the funds without a Lock-up Position can be withdrawn at any time.
The income is calculated at the specified annualized Intrerest Rate, and the distribution time varies depending on the product.
Structured financial products are a new type of financial product based on the combination of fixed income and financial derivatives such as Options. The main features include:
The return is linked to the performance of the underlying assets during the investment period.
Can be divided into two types: capital preservation and aggressive.
Generally, Settlement redemption of principal and interest is carried out upon maturity and cannot be redeemed in advance.
4. Market Intrerest Rate
Annotation illustration:
TradFi is the Intrerest Rate data of the TradFi market
CeFi is the fund Intrerest Rate range of the centralized financial platform in Cryptocurrency
Decentralized Finance is the range of funds of Cryptocurrency Decentralization financial platform Intrerest Rate
Disclaimer: The above data is for reference only and does not constitute investment advice. Investors should conduct their own due diligence and carefully assess the risks before making any investment decisions.
6.4. Technical Analysis of Bollinger Bands Trading Strategy
Bollinger Bands is a common Technical Analysis indicator that identifies the Overbought or Oversold state of an asset by calculating the standard deviation of prices. This article will introduce how to use Bollinger Bands to conduct technical trading on ETH and analyze the backtesting results.
Calculation Method of Bollinger Bands
The midline is set as a 20-day arithmetic MA.
The upper rail is set to the price standard deviation of the middle rail + 2*20 periods.
The lower band is set to the price standard deviation of the middle band minus 2 times the 20-period.
Trading Strategy
When the ETH price approaches or breaks through the upper band, take a sell action, Position 20%.
When the ETH price approaches or breaks through the lower rail, make a purchase action, Position20%
The initial principal is 100,000 USDT
Backtest Results
According to the above strategy, backtest ETH, the results are as follows:
Final Yield: 32.17%
Maximum Drawdown: 18.92%
Annualized Volatility: 36.25%
From the backtesting results, the strategy performed well in the ETH market. Although there is some drawdown risk, the final yield reached 32.17%, far higher than the risk-free yield. It is worth noting that the strategy's annualized Volatility is relatively high, reaching 36.25%, and risk control is needed when operating.
In general, the Bollinger Bands technical trading strategy is effective in capturing the Overbought and Oversold states of ETH. By setting appropriate positions and stop-loss and take-profit levels, risks can be controlled to a certain extent, and good profits can be obtained. However, a single technical indicator often fails to capture the complete market changes, so in practical operations, it is necessary to combine other analysis methods and adjust strategies according to real-time market conditions.
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
AI Weekly Highlights Report (7.13-7.19)
Table of Contents:
1. Market Overview
1.1. Market Sentiment
This week, the total Market Cap of Digital Money reached $2.18 trillion, with a rise of 1.39% compared to the previous period. The exchange volume rose by 3.21% compared to the previous period, reaching $1.02 trillion. BTC price fluctuated around $64,000, showing a Sideways trend overall. ETH price is running above $1,800 with active trading.
Today's market sentiment is greedy, with a fear and greed index of 60, indicating an overall optimistic market sentiment.
1.2. Macroeconomic Impact
Recent data suggest that the pace of the global economic recovery has slowed and inflationary pressures persist. Eurozone CPI pumped 5.5% year-on-year in June, higher than expectations of 5.1% and the highest since records began in 1985. United States CPI pumped 3.0% year-on-year in June, in line with expectations but still at a high level. The Fed will hold its Intrerest Rate decision meeting at the end of July, and the market expects the Fed to raise interest rates by another 25 basis points, with a 70.2% probability that the Intrerest Rate range will reach 5.25%-5.50%.
Producer Price Index (PPI) and Consumer Price Index (CPI) remain high, reflecting sustained inflationary pressure. Eurozone's PPI rose by 25.6% year-on-year, hitting a historical high in June. The US PPI increased by 0.1% in June, lower than the expected 0.2%, but still at a high level. Purchasing Managers' Index (PMI) indicates a slowdown in economic activity. In June, Eurozone's Manufacturing PMI stood at 43.4, marking the sixth consecutive month in contraction territory. The US Manufacturing PMI for June was 46.0, also below the 50 threshold indicating contraction.
Overall, high inflation will force major Central Banks to continue raising interest rates to control inflation expectations. However, excessive rate hikes may pose the risk of a hard landing for the economy. The Cryptocurrency market may continue to experience fluctuations in the short term due to macroeconomic conditions.
1.3 Economic Calendar
Analysis and Summary:
The Richard Manufacturing Index, released on July 24, reflects the state of the manufacturing industry. Last month's data was -7.0, indicating that the manufacturing industry is in a contraction phase. If this month's data continues to be weak, it will increase the risk of an economic recession. 2. The US June new home sales annualized data announced on July 25th is an important indicator of the real estate market conditions. It is expected to decline slightly to around 670,000 households. If the data is significantly lower than expected, it will intensify concerns about the economic outlook. 3. The annualized seasonally adjusted data for US GDP in the second quarter announced on July 26th and the annual core PCE price index data are extremely important, and will directly influence the Fed's monetary policy orientation. The market expects the annual GDP rate to fall to around 1.8%, and the annual core PCE price index to decrease slightly to 4.6%. If the actual data is lower than expected, it will increase the possibility of a Fed rate cut in September.
Overall, the macroeconomic data released this week will provide important reference for the decision of the Federal Reserve's September policy meeting. The market will closely follow the changes in data in areas such as GDP, inflation, and manufacturing to assess the actual economic fundamentals.
2. Analysis of Fundamentals and Price Fluctuation
2.1. Price Fluctuation Analysis
BTC weekly Volatility Based on the daily Closing Price of BTC in the past week, the weekly Volatility of BTC is 2.35%.
Price Fluctuation Analysis This week, the price of BTC fluctuated within the range of $63,000 to $65,000. The price pump was mainly driven by continued buying from institutional investors and the approval of the ETH spot ETF, which brought favorable information. However, the distribution of compensation to Mt. Gox creditors also brought certain selling pressure.
volume Impact The average daily volume of BTC this week is about $5 billion, an increase from last week. The increase in trading activity reflects the market's divergent sentiment, with some investors taking advantage of the opportunity to profit and others continuing to go long.
Market activity and price direction Despite the increase in volume, the price is still hovering within a range. Market participants have different opinions on the future, waiting for further Favourable Information or Unfavourable Information to emerge. If BTC can effectively break through the $65,000 barrier, it will open up room for further pump.
2.2. Analysis of Financial Position
According to the latest fund flow data, we can see that there are some differences in the inflow and outflow of major cryptocurrencies. BTC and Ethereum, as the leaders in the cryptocurrency market, are worth paying special attention to their fund flow situation.
BTC Funds Flow Data shows that the net inflow of funds into BTC was approximately 960 million US dollars last week. This indicates that institutional investors and Large Investors may be accumulating at the lows and increasing their BTC positions. However, at the same time, the outflow of funds from retail investors has also increased, reflecting some investors' concerns about the recent price Fluctuation.
ETH Fund Flow On the ETH front, the net inflow of funds is about $516 million. In contrast, the outflow of funds from retail investors is relatively small. This may indicate that institutional investors are optimistic about the long-term prospects of Ethereum and are buying the dips when the price pulls back.
Other Cryptocurrency In addition to the flow of funds for BTC and ETH, the flow of funds for other cryptocurrencies is also worth following. For example, the significant net inflows of funds for tokens such as MATIC, FTM, and NOT reflect investors' positive expectations for these tokens.
Overall, despite recent Fluctuation in the Cryptocurrency market, the net inflow of funds from institutional investors and Large Investors remains relatively strong. This may indicate an increase in market activity and a potential Rebound in prices. However, investors still need to closely follow market trends.
2.3. Smart Money Analysis
The flow of clever money often predicts market trends. By analyzing the changes in large orders and trading volume, we can observe the movements of institutional investors.
BTC In recent weeks, the large single transaction volume of BTC has increased, indicating that institutional investors are gradually Building a Position. This means that the support strength of BTC may be enhanced in the future.
ETH Similar to BTC, ETH's large orders Trading Volume is also on the rise, indicating that institutional investors are increasing their holdings of ETH. However, the selling pressure on ETH has also increased, and some volatility is expected in the future.
AltCoin Overall, the Trading Volume of AltCoins' large orders is relatively low, reflecting a lack of interest from institutional investors. However, there has been an increase in the Trading Volume of certain popular AltCoins' large orders.
Overall, institutional investors are gradually increasing their positions in mainstream currencies, and it is expected that mainstream currencies will remain strong in the future. However, it is also necessary to be cautious about the increase in selling pressure.
3. Hot Topics
Solana: The Next ETF? The innovation of public chain technology may have become widely Consensus
Recently, the Crypto market has caused panic among investors due to the Mtgox compensation and the selling off of governments in the United States and Germany. The vast majority of Tokens have experienced a decline of more than 20%, but there are also some Tokens that are relatively "resilient" in price, and SOL is one of them. Solana, as a public chain project, adopts a Consensus Mechanism that combines delegation Proof of Stake (PoS) and Proof of History (PoH). It introduces the Timestamp mechanism and uses multi-threaded parallel processing and state compression technology to enable Solana to have the advantages of high throughput and low Transaction Cost. Solana has successively released three innovative technologies, Actions, Blinks, and ZK Compression, expanding into the field of SocialFi and significantly compressing the existing Transaction Cost. These three new technologies will boost Solana's future development and bring new expectations to the market. In addition, with the application for spot ETF, Solana's future expectations and narratives are full of imagination and potential, which is further enhanced.
Solana breaks through the limits of the ecosystem and leads the wave of Web3 innovation
The Solana ecosystem is currently in a rapid development stage, with innovative applications emerging like bamboo shoots after a spring rain. Among them, Actions, Blinks, and ZK Compression, three disruptive technologies, are particularly noteworthy, and can be called the "three treasures" of the Solana ecosystem's new era.
Actions is a revolutionary API that allows websites to seamlessly integrate with the Solana blockchain, making on-chain activities easily accessible. This not only greatly enhances the convenience of Solana application development and user transactions, but also injects powerful momentum into the efficient execution of on-chain smart contracts, and lays a solid foundation for Solana's entry into the SocialFi field.
Blinks is a new primitive that transforms on-chain operations into shareable links, which can convert any Solana Actions into spreadable links rich in metadata. This not only greatly enhances user experience, but also effectively increases Solana's traffic and significantly lowers the barrier for users to participate in Web3.
ZK Compression, as a compression technology built on Solana, can help developers and users build applications on a large scale. It reduces the system state cost by orders of magnitude while maintaining Solana's excellent security, outstanding performance, and strong composability, injecting tremendous power into the vibrant development of the Solana ecosystem.
It is worth mentioning that Solana also employs a unique technology called "Turbo Transactions", which uses long CPU cores to process transactions in parallel, greatly improving network throughput and execution speed. This undoubtedly injects strong vitality into Solana and makes it an essential leader in the Web3 revolution.
It can be seen that the Solana ecosystem is undergoing an unprecedented breakthrough evolution. The emergence of disruptive technologies such as Actions, Blinks, and ZK Compression is driving Solana to ride the wind and waves, leading the Web3 era to a new era.
Solana ETF Attack: Injecting New Energy into the Solana Ecosystem
With the continuous development of the Solana ecosystem and the introduction of innovative technologies, the call for Solana ETFization is growing. Once the Solana ETF is approved, it will have a huge impact on the Solana ecosystem:
With the continuous development of the Solana ecosystem and the launch of innovative technologies, the calls for Solana ETFization are getting louder. Once the Solana ETF is approved, it will have a huge impact on the Solana ecosystem:
It is worth mentioning that, according to Bloomberg analyst Eric Balchunas, the launch of ETH Spot ETF will pave the way for similar products such as Solana ETF to go long. This undoubtedly brings more possibilities for the future development of Solana ETF.
Can Solana become the next ETF?
The key factors determining whether the next SpotETF will appear are three key factors: regulatory policies, the degree of Decentralization, and market demand. From the perspective of policy regulation, the main reason why Solana ETF will not be launched in the short term is that the path to launch a Spot digital asset ETF in the United States is clear: there needs to be a federally regulated futures market. After years of observation, such as the absence of price manipulation, then the futures ETF is approved, and finally the Spot is approved. Except for BTC and ETH, there is no other federally regulated futures market for ETFs. Therefore, according to the above path, there is a greater possibility that there will be no crypto spot ETF in the short term. However, the U.S. presidential election softened the Democratic Party's Crypto policy, and Trump's presidency may bring about more positive changes.
From the perspective of Decentralization, there are 3 indicators that can be used as measurement factors:
Nakamoto Coefficient: the minimum number of independent entities that could collude to attack the network
Staking Requirements: The difficulty of participating in the network as a Node operator or validators
CCData Governance Rating: Various governance measures
Taking into account these three metrics, Solana's level of decentralization is currently second only to Ethereum, and its potential is undoubtedly worth recognizing.
If we start from the market demand, Solana will receive a large amount of capital injection in the future, which will affect its market indicators such as Market Cap, volume, and Liquidity, and then create a domino effect, causing a butterfly effect on existing financial products such as Trust's Asset Under Management. The greater wealth effect will also drive the rise of various activity indicators, such as DAU, Followers, and Txns. Based on the current situation, Solana is second only to Ethereum.
Taking into account the two dimensions of Decentralization and market demand, the weighted total possibility score is obtained. The weight of Decentralization is 33%, and the weight of market demand is 66%. It is conceivable that in the eyes of Wall Street, what is most important. The total score is obtained, and the score of Solana spot ETF is second only to ETH, and it is significantly ahead of other crypto tokens. Therefore, GSR holds a very optimistic attitude towards the launch of Solana spot ETF.
And if the solana spot ETF is approved, how much can the Sol price rise?
Compared with BTC, BTC rose from around $27,000 in October 2023 when market participants began to believe that the US Spot ETF approval was possible, to around $63,000 in June 2024, achieving a 2.3x rise. Considering that Solana's Consensus will not be as strong as BTC, GSR has provided its own estimate:
The impact of Solana spot ETF on the value of Solana is 1.4 times in Bear Market, 3.4 times in volatile market, and 8.9 times in Bull Market.
Looking ahead, the Solana ecosystem is still full of infinite possibilities. With its high performance and low cost advantages, coupled with the continuous introduction of innovative technologies, Solana will surely occupy a more important position in the public chain field. In addition, popular zones in the Solana ecosystem such as DePIN, AI, and GameFi will also set off investment frenzy in the future. The future of the Solana ecosystem is bright and will become a leading force in public chain technology innovation.
4. Main Events
The following are the Top 10 events that have had a significant impact on the Cryptocurrency market in the past seven days:
2024-07-19 FATF will assess Argentina's Money Laundering risk Argentine leaders will meet with the Financial Action Task Force (FATF) in Paris in October, where the FATF will continue to assess Argentina's money laundering and terrorism financing risks.
2024-07-19 BTCWhaleincrease the position215.49 pieces According to on-chain data analysts, Whale, with a 100% success rate in two previous BTC waves over the past 11 months, has once again increased the position. 10 minutes ago, the Whale withdrew 215.49 BTC worth $14 million from Binance.
2024-07-19 EigenLayer has the largest net outflow in a single day According to Block data, on July 11th, EigenLayer experienced the largest single-day net outflow in history, with a net outflow amount of over $135 million, equivalent to approximately 43,550 ETH at that time.
2024-07-19 BTC breaks through $64000 OKX-BTC/USDT is now at $63,947.70, with a 24-hour decrease of 0.61%.
2024-07-19 The entire network Get Liquidated nearly 29 million US dollars According to Coinglass data, the total amount of Get Liquidated in the past 1 hour is $28.8869 million, of which $26.9047 million comes from long orders and $1.9821 million comes from short orders.
2024-07-18 Sanctum open CLOUD Airdrop application Solana ecosystem Liquidity stake protocol Sanctum has officially launched the Airdrop application. Eligible users can claim it through the Jupiter LFG page. CLOUD is now available on Jupiter, with a current price of $0.3033.
2024-07-18 ETH drops below $3400 OKX-ETH/USDT is now at $3,410.15, down 1.67% in the past 24 hours.
2024-07-17 Coingecko announces the top ten tokens with the highest growth in the second quarter Coingecko released the top ten Token information with the highest price increase in the second quarter, namely BRETT, TON, KAS, XMR, PEPE, JASMY, ENS, ONDO, WBT and BGB.
2024-07-17 Lambda announces strategic upgrade The Ethereum-based Layer 2 project Lambda announced a million-dollar Airdrop plan, complete the tasks to qualify for the Airdrop for free, and will establish a new social and storage ecosystem.
2024-07-17 Bitwise CIO: BTC ETF purchases exceed mining volume Bitwise's chief investment officer said that since the launch of the spot BTC ETF, the amount of BTC purchased by related funds has reached approximately 263,965, while the BTC output from BTCMinerMining during the same period is 129,281.
5. Global Policies
The following is a list of new political dynamics, economic policies or regulations related to the Cryptocurrency industry, and an analysis of their impact on the industry and the market, based on the news from July 12th to July 19th, 2024:
1. South Korea's first encryption currency law fully takes effect, with a focus on investor protection
On July 18, 2024, South Korea's first Cryptocurrency regulatory framework, the Virtual Asset User Protection Act, officially came into effect. The law imposes stricter requirements on digital asset exchanges, including storing at least 80% of user deposits in cold wallets, entrusting user cash deposits to licensed local banks for safekeeping, holding Cryptocurrency reserves equivalent to the amount and type of customer deposits, etc. Exchanges must also purchase sufficient insurance or establish reserve funds to deal with Hacker attacks or Liquidity crises.
Analysis: The purpose of this bill is to strengthen the protection of investor funds and improve the transparency and security of exchanges. This will be beneficial in attracting more long-term investors to the Cryptocurrency market in Korea and promoting the healthy development of the industry. However, it may also increase the operating costs and compliance pressure of exchanges.
2. Argentina implements new policies to encourage encryption investors to register encryption assets with the government
This week, the Argentine government signed a fiscal plan that includes a tax amnesty for individuals declaring $100,000 (including registered encryption assets). The chairman of the Argentine Securities Commission stated that this move can ease the pressure from the Financial Action Task Force (FATF) and prevent Argentina from being gray listed.
Analysis: The policy aims to regulate the Cryptocurrency market and curb illegal activities such as Money Laundering. Although it may increase Compliance costs for investors, it is conducive to attracting more long-term institutional investors into the Argentine Cryptocurrency market and promoting the development of the industry. It also helps the Argentine government to grasp the flow of Crypto Assets and strengthen regulation.
3. SEC Commissioner: The possibility of ETH ETF participation in stake can be reconsidered
US Securities and Exchange Commission (SEC) Commissioner Peirce said that the possibility of ETH ETF participating in stake can be reconsidered.
Analysis: If the SEC ultimately approves the ETH ETF participation in stake, it will further promote institutional investors' participation in the Ethereum ecosystem and promote the pump of Ethereum prices. At the same time, it will also promote the development of the Ethereum ecosystem, attracting more long applications and users to join.
Summary
Recently, countries and regions such as South Korea and Argentina have introduced new Cryptocurrency regulatory policies and regulations, mainly aimed at strengthening investor protection, curbing illegal activities, and attracting institutional investors. At the same time, the US SEC has also begun to reconsider the possibility of ETH ETF participation in stake. The introduction of these policies and regulations will further regulate the Cryptocurrency industry, promote its healthy development, attract more long-term investors and applications to join, and drive the development of the entire industry.
6. Investment Analysis
6.1. Investment Recommendation
The Cryptocurrency market has recently presented the following hot zones:
5 recommended Cryptocurrencies with rise potential:
Disclaimer: The above recommendations are based solely on current market analysis and are not financial advice. Investors should bear their own risks.
6.2 Investment Strategy
Hot Token Analysis of the Week
BTC experienced its deepest pullback since the end of 2022 this week, with the trading price dropping below the 200-day moving average at one point. Despite this, compared to previous cycles, this pullback is still relatively shallow in history. Worldcoin (WLD) broke through $3.2 in a short-term squeeze and with upcoming token unlocks, pumping over 22.89% in a single day. Although Cardano (ADA) is pumping in price and is about to undergo a technical upgrade, it still faces bearish sentiment.
Trading Bot Strategy Analysis
The trading robot strategies on Gate.io exchange have shown mixed performance this week. The contract grid strategies have generally yielded high returns, with the turbo_usdt strategy reaching a return rate of 25895.13%. However, some spot grid strategies have lower returns, such as the btc_usdt strategy with only 65.50%. Overall, the high-risk high-return contract grid strategies have the advantage, while the low-risk low-return spot grid strategies are relatively lagging behind.
Summary
This week, the Cryptocurrency market has seen increased Fluctuation, with high-risk, high-yield quantitative strategies such as contract grid and Spot Martingale performing well, while low-risk, low-yield Spot grid and smart reallocation strategies have lagged behind. Investors can choose the appropriate quantitative trading strategy based on their risk preferences.
6.3. Financial Investment Products
The total amount of USDT in the Wealth Management of Gate.io is 352,694,924.86 USDT, with an estimated Annual Percentage Rate of 9.64% + 8.87%.
4. Market Intrerest Rate
Annotation illustration:
Disclaimer: The above data is for reference only and does not constitute investment advice. Investors should conduct their own due diligence and carefully assess the risks before making any investment decisions.
6.4. Technical Analysis of Bollinger Bands Trading Strategy
Bollinger Bands is a common Technical Analysis indicator that identifies the Overbought or Oversold state of an asset by calculating the standard deviation of prices. This article will introduce how to use Bollinger Bands to conduct technical trading on ETH and analyze the backtesting results.
Calculation Method of Bollinger Bands
Trading Strategy
Backtest Results
According to the above strategy, backtest ETH, the results are as follows:
From the backtesting results, the strategy performed well in the ETH market. Although there is some drawdown risk, the final yield reached 32.17%, far higher than the risk-free yield. It is worth noting that the strategy's annualized Volatility is relatively high, reaching 36.25%, and risk control is needed when operating.
In general, the Bollinger Bands technical trading strategy is effective in capturing the Overbought and Oversold states of ETH. By setting appropriate positions and stop-loss and take-profit levels, risks can be controlled to a certain extent, and good profits can be obtained. However, a single technical indicator often fails to capture the complete market changes, so in practical operations, it is necessary to combine other analysis methods and adjust strategies according to real-time market conditions.