Weekly Web3 Research | Market Experienced 805 Plunge, Followed by a Short-term Decline and then a Rebound; Market Cap of Crypto Market Fell Below $1.9T for a Short Period

2024-08-09, 05:17

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![](https://gimg2.gateimg.com/image/article/1692587604touyanzhoubao.jpeg)
## Weekly Trend Overview
The <a href="/price" target="_blank" class="blog_inner_link">crypto market</a> situation this week was affected by the liquidation of yen arbitrage trading, resulting in a large-scale general decline on August 5th. The vast majority of mainstream cryptocurrencies experienced a rapid decline within the day but later showed a more obvious intraday rebound. Currently, the overall market volume for the week has decreased to some extent compared to last week. Due to fluctuations in the international financial market and intensified regional conflicts, the crypto market has experienced an unprecedented wave of volatility, indicating that the mainstream financial system is deeply influencing the overall crypto industry. Such profound market fluctuations were very rare in the crypto market's development process in the past. In a short period of time, the entire network's position explosion exceeded $1 billion. At present, the crypto market has returned to above $20,000, and the overall sharp decline trend has stopped, maintaining a new oscillation cycle. The overall market value growth of the crypto market has shown a significant decline compared to the same period last week. Currently, the total market value has reached around $2.09 trillion, with a 7.38% increase within 24 hours. The market sentiment remains around 43. This week, the trend of key mainstream currencies has shown a relatively unified situation, that is, entering the current fluctuation cycle after a rapid rise and fall at the beginning of the week.

Compared to last week, the performance of the crypto market this week is undoubtedly a profound intraday plunge low, especially for top cryptocurrencies represented by BTC, whose prices once fell below the $50,000 level. At present, the rise/fall ratio of mainstream currencies within one week is 1:9, and the market has been declining throughout the week without returning to the opening price. The <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">BTC price</a> has experienced multiple key price points within a week and is currently in an upward phase. As the weekend approaches, the price remains around $60,000, with a weekly decline of around 8%. ETH has experienced a greater decline, with a weekly drop of around 18%, currently maintaining around $2,580.

Overall market performance has been poor this week, with a few currencies experiencing relatively small upward movements. The ZEC has risen by around 13.83% in seven days, and the price curve shows strong fluctuations. Currently, the currency price remains around $36.

The overall crypto market will likely continue to rise this weekend and recover during the weekend, but the overall magnitude will be controlled within a moderate range.

## Crypto Market
🔥 On Monday, PROSHARES <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> Strategy ETF plummeted 15.7%, while ISHARES Bitcoin Trust fell 15.6% after Bitcoin hit a low in over five months.

🔥 <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> founder Vitalik posted on his personal social media platform, saying, "I think people will be surprised to find that cross L2 interoperability issues are no longer a problem. We are working on the entire Ethereum (including L1 rollrolls、validums， Even on the side chain, a smooth user experience has been achieved. I see a lot of energy and willingness to achieve this goal.

🔥 According to 8MarketCap data, Bitcoin fell below the support level of $50,000 at 805 and remains one of the top ten assets in the world.

🔥 On August 5, Matrixport released a chart on the X platform stating that Bitcoin funding rates have turned negative. August (and September) have always been months of Bitcoin's decline, and this year seems to be no exception. The significant fluctuations in Bitcoin futures positions drove up prices in May and July.

🔥 The total market value of the 805 crypto market briefly fell below $1.9 trillion.

🔥 Buffett's Berkshire Hathaway reduced its holdings of Apple stock by nearly half in the second quarter, from 789 million shares in Q1 to approximately 400 million shares, with an overall net sale value of $75.5 billion. This brought its cash reserves to a record high of $276.94 billion, including cash equivalents.

🔥 On August 5th, 10x Research pointed out in its latest report that although bullish sentiment is prevalent in the Bitcoin/crypto sector, it is crucial to protect wealth or take advantage of significant price declines to profit at certain times. On October 3, 2023, it predicted that Bitcoin would rise significantly, depending on whether the Federal Reserve maintains its current position, and recommended "selling when the Fed cuts interest rates for the first time." With the expected interest rate cuts now appearing to be driven by economic weakness rather than a decrease in inflation, this view has become increasingly prominent.

🔥 Since Monday, the redemption amount of Ethena's USDe stablecoin has exceeded $100 million. The severe market turbulence may have triggered user redemptions, putting some pressure on the agreement. At the same time, USDe can remain pegged to the US dollar.

🔥 The long-term options market indicators for Bitcoin still show a bullish bias. This key indicator shows signs of bottoming out during the period of price decline. Due to various factors, including the termination of yen financing transactions and concerns about the US economy, Bitcoin performed poorly in August, falling more than 13% and dropping as low as $50,000.

🔥 Matrixport released today's chart stating that the market tends to attribute the sharp decline in Bitcoin to the closing of yen arbitrage trades. Many financial market participants borrowing Japanese yen to invest in high-yield assets are now reversing their position direction, and Bitcoin has become a victim asset in this process. The unexpected interest rate hike by the Bank of Japan, coupled with market expectations of a rate cut by the Federal Reserve, has increased the uncertainty of central bank policies, leading to deleveraging of the financial system.

🔥 According to Circle's announcement, due to an upcoming network upgrade, Circle will cease support for USDC on the <a href="/price/flow-flow" target="_blank" class="blog_inner_link">Flow</a> (Cadence) blockchain at 3 am Eastern Time on September 3, 2024. The USDC coinage service will continue until noon on August 27, 2024 (Eastern Time).

🔥 On August 6, Vitalik stated on its social media platform that Arbitrarum and <a href="/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> are commendable as they were among the first to implement the first phase of full EVM rollups and look forward to seeing the first ZK-EVM rollups.

🔥 According to Grayscale's official website, Grayscale Ethereum's spot ETFETHE still holds 1.96 million ETH. ETHE was reported to hold 2.63 million ETH when it went online on July 23. There was a significant net outflow after the listing, which lasted for 11 days, but the outflow rate has gradually slowed down.

🔥 <a href="/price/cosmos-hub-atom" target="_blank" class="blog_inner_link">Cosmos Hub</a> has released Proposal 945, which allows sub-chains to initiate consumption chains through permissionless interchain security (ICS) after updates, simplifying governance processes. At the same time, the proposal introduces consumer chain owners to provide flexibility in on chain governance. The proposal has now received over 7.68 million ATOM votes in favor, accounting for 99.96% of the overall voting.

🔥 Digital currency research firm Matrixport has released an analysis chart stating that caution remains crucial due to ongoing macroeconomic and geopolitical risks, as well as poor earnings expectations for US tech companies. However, Bitcoin seems to be oversold, with its RSI reaching 30%.

🔥 Singapore-based crypto investment firm QCP Capital has issued a statement stating that Monday's market turbulence may seem like a nightmare for many, as most assets have recovered from large-scale selling. The VIX index trades over 65%.

🔥 Nate Geraci, President of The ETF Store, stated in an article on the X platform that spot Bitcoin and Ethereum ETFs still face significant regulatory barriers: 1. Physical sub_script_ion and redemption are not allowed; 2. Option trading is not allowed; 3. Pledges on spot Ethereum ETFs are not allowed. Nevertheless, these products still challenge and break the ETF industry record, which should indicate the demand of investors.

🔥 NASDAQ and BlackRock, the world's largest asset management company, plan to launch options for their spot Ethereum ETF and conduct trading. According to a document released on the website of the US Securities and Exchange Commission (SEC) on Tuesday, BlackRock and Nasdaq ISE, LLC have proposed rule changes to list and trade options on iShares Ethereum Trust Fund (code: ETHA).

🔥 10x Research stated in its latest report that Monday's Bitcoin crash was a key reference point in the recent history of the market. Traders pay attention to the technical aspects of price changes, and even the most optimistic crypto trader must admit that the decline has been increasing: the May low was $56,500, the July low was $53,500, and the August low was $49,100. Although Bitcoin is currently attempting to recover, strong resistance from a clear downward trend may become more challenging after the recent support level breakthrough.

🔥 Crypto recruitment company CryptoJobsList CEO Raman Shalupau stated that the <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> on chain Meme coin craze, which began in the first half of 2024, has led to an increase in demand for Rust engineers. Shalupau added, "This is also driven by broader technological trends, with Rust becoming a popular system programming language that many blockchain companies are adopting to write high-performance distributed systems.

🔥 Messari stated in an article on X that as of August, the DePIN field has continued to grow, with financing scale increasing by 296% year-on-year and total market value increasing by 400% to $20 billion. By market value, seven of the top eight DePIN protocols are digital resource networks (DRNs) with a total market value of $12.2 billion, and <a href="/price/helium-hnt" target="_blank" class="blog_inner_link">Helium</a> is the only physical resource network (PRN) to enter the top eight by market value.

🔥 Vitalik stated in X that more M31 and binary field support have been added to Zorch, and it is now possible to write STARK-proof code with reasonable performance that runs on GPUs using Python.

🔥 Chris Burniske, former head of crypto at Ark Invest and current Placeholder VC partner, said on social media that I usually focus most of my attention on a major dark horse project in each cycle.

🔥 Glassnode's weekly on chain insights study emphasizes the severity of the recent market downturn, linking it to the "correlation-1" event that caused major assets and stocks such as Bitcoin to plummet. According to Glassnode's data, this event led to a key psychological level of $51,400 in Bitcoin spot prices and triggered a significant 11% decrease in open Bitcoin futures contracts overnight. The report also shows that only 7% of short-term holders' supply is still profitable, a figure not seen since the FTX crash in 2022, which is more than one standard deviation below the long-term average of the indicator, indicating significant financial pressure on buyers in recent times.

🔥 ZK order book trading platform Vessel has completed a seed round financing of $10 million, with participation from Sequoia Capital, Scroll co-founders Sandy Peng and Ye Zhang, <a href="/price/avalanche-avax" target="_blank" class="blog_inner_link">Avalanche</a> Foundation, <a href="/price/algorand-algo" target="_blank" class="blog_inner_link">Algorand</a> Foundation, IMO Ventures, Folius Ventures, Incubation Alpha, and a group of angel investors.

## Regulatory & Macro Policies
🔥 A group of lawmakers in the United States are calling on the Commodity Futures Trading Commission (CFTC) to ban gambling in US elections, stating that such behavior is harmful to public trust. The letter emphasized that after the attempted assassination of former President Donald Trump and President Joe Biden's withdrawal from the 2024 presidential election, election-related bets on Polymarket reached a historic high, with trading volume almost doubling to $1 billion in July.

🔥 In a document dated August 7, US District Judge Peter Castel officially approved the $12.7 billion settlement agreement reached between FTX and Alameda to resolve the CFTC's 20-month-long lawsuit.

🔥Grayscale and Bitwise have submitted a rule change proposal to the US Securities and Exchange Commission (SEC) in collaboration with the New York Stock Exchange, proposing to allow trading of options on Bitwise Ethereum ETF, Grayscale Ethereum Trust, and Grayscale Ethereum Mini Trust. The document states that these options will provide investors with an additional, relatively low-cost investment tool, while also serving as a hedging tool to meet their investment needs for Ethereum products and positions.

🔥The Brazilian Securities and Exchange Commission (CVM) has approved the first Solana spot ETF. QR, a Bitcoin and Ethereum ETF management company, provides this investment product, which Vortx will manage. At present, the ETF is still in the early stage of operation, and due to regulatory reasons, it still needs approval from B3. It will be launched within a maximum of 90 days.

## Crypto Market Highlights
⭐️Last week, the overall crypto market showed a general downward trend, influenced by fluctuations in mainstream financial markets and regional political conflicts. This rapid downward trend occurs not only in the crypto market but also in the US stock market, Japanese yen, and other markets with corresponding violent fluctuations. Under the influence of external mainstream financial markets and environmental changes, although the current market has shown some recovery, it may be difficult to recover to the weekly opening volume in the short term, which increases the probability of the overall market experiencing sustained volatility. It is expected that this situation will continue for a period of time.

⭐️The number of mainstream currencies that have experienced significant increases in the market this week is relatively scarce, and even the currencies that are among the top performers have performed poorly. The actual increase is quite limited, and it is accompanied by severe price fluctuations. This week, the ZEC has increased by about 13.83%, and the current price is around $36. The high point of the currency's price in one week is the current price, and the weekly increase exceeds the rapid decline during the 805 period. It is currently in a relatively obvious upward trend and is expected to see further price rebound in the future of this week.
![](https://gimg2.gateimg.com/image/article/17231803171.jpg)
(Data Courtesy Of Coinmarketcap)

## BTC & ETH Weekly Performance
### Bitcoin (BTC)
![](https://gimg2.gateimg.com/image/article/17231803522.jpg)
(Data Courtesy Of TradingView)

The price of BTC as a whole experienced a rapid intraday decline followed by fluctuations and a rebound this week. The price went through multiple key levels continuously, and the currency showed a relatively stable price state after opening at the beginning of the week. However, after the 805 incident, the price continued to decline, briefly falling below the key price level of $50,000, and then began to rise again. This caused a significant fluctuation in BTC prices throughout the week. The currency will likely maintain a volatile upward trend this week, but the probability of a significant increase is low. BTC's weekly high point is around $61,100, while its low point is around $49,552.

Analysis suggests that BTC's price fluctuations this week represent the overall external impact on the market. After a clear bearish signal appeared in the market, BTC prices fell continuously for a short period and reached a bottom, followed by a continuous oscillation and rebound, accompanied by varying degrees of price fluctuations. After entering the weekend, BTC's price has once again returned above $60,000, and it is expected to experience further rebound, with a high probability of breaking through the opening price level.
### Ethereum (ETH)
![](https://gimg2.gateimg.com/image/article/17231803863.jpg)
Data Courtesy Of TradingView)

The high point of <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">ETH price</a> this week was $2,926, but it has fallen below $3,000 due to the impact of last week's market trend. This week, it has also been affected by the overall downward trend of the market, and the price fluctuation is more severe compared to BTC, with a weekly decline of about 18%. Even though the currency has shown a clear upward trend, the price remains above $2,600, significantly different from the opening price. Currently, it continues to fluctuate around $2,630.

Analysis suggests that the performance of ETH coin price this week is closely related to its sluggish performance in the past few weeks. In addition, the poor performance of spot ETFs and the recent decrease in Ethereum activity have significantly impacted this currency as one of the top mainstream currencies when the 805 incident occurred this week. At present, it is difficult for ETH to return to above $3,000 in the short term, and it will rise to around $2,800 at most this week.

## Web3 Project Trend
This week, the total market value of all seven categories of projects fell. Although the decline in each track is different due to changes in market cycles and external news, the current market trend is still similar to that of several consecutive weeks, within the same cycle range. It is expected that various sectors may experience a certain rebound during the weekend period.

| Project category	  | 7d Change  | Top 3 Gainers  | Comment  |
| ------------ | ------------ | ------------ | ------------ |
| Layer 1 | -9.3% | <a href="/price/<a href="/price/evmos-evmos" target="_blank" class="blog_inner_link">evmos</a>-evmos" target="_blank" class="blog_inner_<a href="/price/link-ln" target="_blank" class="blog_inner_link">link</a>">EVMOS</a>,GLQ,SUI | The Layer 1 track has experienced a significant decline this week, with limited gains for the top-growing currencies concentrated in the infrastructure network sector.|
| Layer 2  | -15.4%  |ZK,TOR,TAIKO|The overall decline of the Layer 2 sector this week is significant, although the top currencies have seen some increase, the concentrated project types are not in the application layer.|
| DeFi  | -16.5%  | WEX,$SHARBI,FLIP | The DeFi track has experienced a significant decline, but overall liquidity has increased significantly this week, with the top-growth currencies showing very exaggerated gains.|
| NFT  | -17.1% | SOCKS,SUPERBID,BWORM |The NFT market has also experienced a significant decline this week, with the top growing currencies concentrated in niche projects that rank lower within the week.|
| MEME  | -14.8%  | $SHARBI,SCHIZO,ZKGROK| The MEME coin market has experienced a significant decline this week, with top currencies experiencing a severe drop at one point. Currently, most of the top-growth currencies are dominated by non-mainstream currencies.|
| Liquid Staking  |-19.1% | ANKRMATIC,VSUI,HASUI| The overall decline of this sector is significant, with the top-growth currencies mainly related to the rising currencies of other tracks, showing a relatively fluctuating overall state.|
| AI  | -16.1%   | INX,NFAI,ARCX | The AI track has also experienced a significant decline , with relatively limited growth in top currencies and concentrated in different categories of popular projects from previous periods.|

<div class="blog-details-info">
<div>Author:**Charles T.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>