TL;DR

• Bitcoin reached a weekly high of $65,650 before plummeting and forming a short-term resistance level around $57,000.
• Ethereum saw a massive drop of over 40% this week and is currently trading around $2,500 with a weak price rebound.
• The Ronin Bridge was exploited, resulting in a loss of 3,996 ETH, although the hacker has since returned $10 million worth of ETH.
• The altcoin market experienced a rapid rebound in market cap after the broader cryptocurrency downturn, increasing by over $167 billion in a single day.
• The cryptocurrency market crash led to a surge in on-chain liquidations and a spike in Ethereum gas fees.
• The top three performing categories this week were memecoins, the Solana ecosystem, and Bitcoin sidechains.
• This week’s funding rounds primarily focused on infrastructure, gaming, and tokenized asset systems.

Market Analysis

Review and Insights

• BTC Market — Bitcoin experienced a significant downturn this week, plunging below the $50,000 mark on Monday amid recession fears. It briefly dipped to $49,000 before rebounding to around $57,000, where it is currently consolidating. As of now, BTC is trading at $56,168. Although there has been some recovery, the $57,000 level remains a significant resistance point, and investors are on high alert for another potential drop.
• ETH Market — Ethereum’s performance has notably lagged behind Bitcoin. It has also been impacted by broader market sentiment and capital flow fluctuations. This week, ETH experienced a decline of over 40% and is currently consolidating around $2,500. Since August 5th, ETH’s market capitalization growth has been relatively weak.
• Altcoins — The altcoin market saw a substantial rebound on August 6th and 7th, with a daily market capitalization increase of over $167 billion. Notably, the meme coin sector, particularly Solana-based meme coins and Ton’s Tap to Earn projects, experienced daily gains of over 30%.
• Macroeconomic Data — The Bank of Japan surprised the market by raising interest rates by 15 basis points this week, setting the new range to 0.15%-0.25%. Meanwhile, the Federal Reserve kept interest rates steady during its July meeting, although several Fed officials have suggested a potential rate cut in September. Despite these indications, the consensus in the market is that inflation has not yet reached the desired level, suggesting that the September rate cut could be a precautionary measure.
• Stablecoins — The total market capitalization of stablecoins exceeded $165 billion this week, with USDT making up over $115 billion, strengthening its lead in the stablecoin market. Recent data indicates that USDT often re-enters the market after trading hours. However, official data shows that Asian and European funds are not consistently flowing into the market and are taking a more cautious approach.

Weekly Focus

“Black Monday”: Crypto and Global Stocks Plunge Simultaneously as Investors Seek Safety
Monday witnessed a severe shockwave through global financial markets, as both cryptocurrencies and traditional stocks experienced significant declines. Investor risk aversion intensified as the Japanese stock market suffered its largest single-day drop since 1987. Growing concerns over a US economic recession, the bursting of the tech bubble, and geopolitical risks led to a massive exodus of capital from risk assets. Bitcoin’s price plummeted below $50,000, marking an over 18.42% drop within 24 hours. Other major cryptocurrencies like Ethereum also suffered double-digit declines, causing the overall cryptocurrency market to shed nearly $200 billion in a single day.[1]

Last week, the Federal Reserve maintained its benchmark interest rate within the range of 5.25% to 5.5%, marking the highest level in over two decades. This decision was interpreted by the market as a key trigger for the sell-off. Despite inflation trending towards the 2% target and potential weakness in the job market, the Fed plans to keep interest rates elevated for over a year. Some market participants view this as a significant policy error.[2]

Over the past two years, US stocks, particularly in tech sector, have attracted a substantial amount of foreign investment, driving significant growth in the three major indices. This growth was largely fueled by the yen carry trade, where investors borrowed at near-zero interest rates in Japan and sought higher returns in global markets. However, with the recent interest rate hikes by the Bank of Japan, this carry trade has begun to unwind. This is the first time the Bank of Japan has raised interest rates since 2001, causing the yen to appreciate from 161.61 to 142.71 against the US dollar in a month, representing an 11% increase. This appreciation has prompted traders to sell overseas assets and convert them back into yen to mitigate exchange rate fluctuations. The appreciation of both the yen and the Chinese yuan has dealt a blow to carry trade strategies, making it less attractive to borrow low-interest-rate funds to invest in high-yield assets.

On August 7th, Bank of Japan Deputy Governor Shinichi Uchida stated in a speech that the Bank of Japan would temporarily refrain from raising interest rates to maintain market confidence in the face of instability. With the Bank of Japan abandoning rate hikes, the current crisis seems to have temporarily eased. However, “Black Monday” serves as a stark reminder for global investors. Most analysts remain cautiously optimistic about the long-term economic outlook. Investors should closely monitor inflation data and the policies of central banks to adjust their investment strategies accordingly.

Crypto Market Slowly Recovers After Sharp Price Drop
Following the “Black Monday” crash, financial markets saw a broad-based rebound on Tuesday. Both US stocks and cryptocurrencies experienced some recovery, although prices remained below pre-sell-off levels. By the end of the day, the S&P 500, Dow Jones, and Nasdaq had gained 1.04%, 0.76%, and 1.03%, respectively. Meanwhile gold declined by 0.63% as safe-haven demand eased.

According to data from Gate.io, Bitcoin climbed from its $54,000 support level to reach a high of $57,100 on Tuesday, regaining support from the low end of its trading range since late February. As of August 9th, Bitcoin was trading at $56,051, representing a 2.25% increase in the past 24 hours.

Altcoins experienced double-digit recoveries, with all top 200 coins by market capitalization seeing gains, except stablecoins. Among them, the meme token “cat in a dogs world” (MEW) saw the strongest rebound, surging 39.8% to trade at $0.00568. Notcoin (NOT) and AIOZ Network (AIOZ) also posted significant gains of 30% and 27.9%, respectively. The overall cryptocurrency market capitalization currently stands at $2 trillion, with Bitcoin accounting for 55.9%.

Jump Crypto’s Asset Transfers Spark Market Speculation
Arkham data has revealed significant asset movements from addresses associated with Jump Crypto since August 3rd. Approximately $400 million has flowed into Jump, primarily from exchange wallets. Concurrently, around $80 million has been transferred out to exchanges such as Coinbase, Gate.io, and Binance, predominantly in ETH. Since the launch of the US spot Ethereum ETF on July 25th, Jump has redeemed over $500 million worth of Lido’s wstETH for ETH. The firm currently holds about $130 million in staked ETH and has transferred nearly $200 million of unstaked ETH to exchanges. Additionally, Jump Crypto has moved USDC, USDT, UNI, and SHIB to exchanges. Given the sensitivity of the period following the ETF launch, this move has been interpreted as a bearish signal for Ethereum’s future.

Furthermore, Jump Trading executed another $116.7 million worth of sales on August 6th at 22:00 (GMT+8). Since initiating ETH sales on July 24th, Jump Trading has withdrawn 611.78 million USDC from Binance and deposited 558.2 million USDC into Coinbase.[3]

As shown in the figure below, Jump Trading’s addresses currently hold a significant portion of USDC and USDT. USDC accounts for approximately 74.3% of the total holdings, while USDT accounts for 25.7%.

Weekly Spotlight

A New Way to Meme on Solana: Tweet to Coin
MakeNow.Meme is a Solana-based token launch platform similar to Pump.fun that allows anyone to launch a meme coin directly from a tweet. Its most notable feature is the ability to issue tokens by simply posting a tweet on X. With MakeNow, users are theoretically on an equal footing with the token creator when it comes to buying the token, reducing concerns about insider trading. This approach could potentially become a primary method for celebrities to launch their own tokens.[4]

Using the platform is straightforward. Users simply tweet beginning with a $ sign and the ticker name, add a description of the coin, and tag @makenowmeme at the end of the tweet. In addition to text, users can also attach images or videos for more information.

Beyond its unique launch process, MakeNow.Meme offers several other key features:

• No Costs for Deployer. The platform subsidizes the deployment costs, eliminating the need for deployers to pay. Other platforms typically require deployers to pay a gas fee of around 0.02 SOL. Launching from an internal pool to Raydium usually incurs 2-3 SOL, which Pump.fun covers using 85 SOL collected from the internal pool. It’s unclear if MakeNow has a similar arrangement.
• Trade-off Between Reach and Low-Cost Tokens. Users posting on the X platform cannot obtain bottom-tier tokens but can maximize the token’s reach. In addition to X posts, MakeNow supports internal deployment on its website, similar to Pump.fun, allowing deployers to purchase tokens first and determine their purchase ratio. However, this requires additional steps to spread information about the token.
• Steeper Bonding Curve: While specific bonding curve algorithms vary among platforms, community feedback suggests that MakeNow’s curve is steeper compared to Pump.fun. This means early investors have the potential for higher returns.

Note: A Bonding Curve refers to the change in the price of the token during the sales process as it progresses.

Trending Categories

According to data from CoinGecko and CoinMarketCap, the three major categories that rebounded significantly this week are Meme tokens, Solana ecosystem tokens, and Bitcoin sidechains. On Monday, the overall cryptocurrency market valuation fell below 2 trillion dollars due to macroeconomic factors such as the Bank of Japan’s interest rate hike. Starting on Tuesday, the market began a recovery trend, with notable rebounds in the Meme token and Solana ecosystem categories.[5]

Meme Tokens — After Bitcoin briefly dipped below $50,000, it quickly rebounded above $55,000 on Tuesday, signaling improved market sentiment. Meme tokens, often seen as a barometer of market emotions, experienced significant gains this week. Cat-themed Meme tokens and those in the Solana ecosystem performed exceptionally well. Tokens like Popcat, MEW, and WIF saw price increases of over 20% within 24 hours as of 5:00 PM (GMT+8) on August 7.

Solana Ecosystem Tokens — Solana tokens experienced a strong rebound this week after briefly falling below $110. As of 5:00 PM(GMT+8) on August 7, Solana tokens posted a 24-hour gain of over 11.5%, with the SOL/ETH exchange rate exceeding 0.061, reaching historical highs. ETH’s price recovery was weak due to recent selling pressure from Grayscale’s ETH spot ETF, and altcoins generally underperformed. In this context, Solana stood out among public chains, benefiting from high-performance transactions, a robust DeFi ecosystem, a widespread airdrop plan, and the wealth effect of Meme tokens. Solana ecosystem tokens like JUP, JTO, Pyth, HNT, and RAY saw 24-hour gains of over 10%.

Bitcoin Sidechains — Bitcoin sidechains are independent blockchain systems that interact with the Bitcoin main blockchain. These sidechains can either operate as standalone chains on par with the Bitcoin blockchain or as sub-chains reliant on the Bitcoin main chain. Their most notable feature is the ability to freely transfer assets between the Bitcoin main chain and the sidechain using a two-way pegging mechanism. Sidechains can manage simple asset transfers, support asset exchanges, and even execute complex smart contracts. This technology provides a flexible extension to the Bitcoin ecosystem, enabling the Bitcoin network to adapt to a variety of applications. In July, the Total Value Locked (TVL) in Bitcoin sidechains surpassed 2 billion dollars. As of 5:00 PM (GMT+8) on August 7, according to CoinGecko data, the market value of the Bitcoin sidechain sector had increased by over 15% within 24 hours. The STX token, in particular, showed significant rebound strength and is currently ranked 32nd by market capitalization.[6]

Top Performers

According to CoinGecko, the top performers over the past 7 days are:

NEIRO — On July 28th, the owner of the Dogecoin prototype Shiba Inu, Kabosu, announced on social platform X that she had adopted a new Shiba Inu named “Neiro.” This news quickly stirred up the cryptocurrency community, leading to the creation of multiple tokens named NEIRO on Ethereum and Solana. According to CoinGecko, the market cap of NEIRO on Ethereum had exceeded $260 million by August 7th, representing a 120% increase within a week.

MAX — The MATR1X token, MAX, has recently shown strong performance. After dipping to around $0.18 on August 5th, it began an upward trend, reaching approximately $0.46 on August 7th, representing a 155% price increase. MATR1X has developed a comprehensive product line including four popular Web3 games: the classic shooting mobile game MATR1X FIRE, MATR1X BATTLE, Castile (an RPG and Roguelike 3A game), and Evermoon (a Web3 MOBA game). Additionally, MATR1X has completed multiple rounds of financing, with a publicly disclosed total funding exceeding $20 million.

Pendle — Pendle is a DeFi yield trading protocol deployed on Ethereum and Arbitrum that provides a market for trading the “future yield” of yield-bearing assets. By introducing the concept of “separating principal and interest” from traditional finance into DeFi, Pendle divides yield-bearing assets into principal tokens and yield tokens, providing liquidity for both. Users can maximize the utilization of their assets and earn multiple yields through Pendle. From a traditional finance perspective, Pendle’s core operations are similar to coupon stripping, and its swap function is akin to floating-to-fixed interest rate swaps. Currently, Pendle has achieved a total locked value of nearly $5 billion with its innovative yield structure.

Security Incident

On August 6th, the Ronin Bridge suffered a significant security breach when an unauthorized withdrawal of crypto assets occurred. According to on-chain data analysis, the root cause of this anomaly was due to the project team’s failure to properly initialize the operator weight required for cross-chain transaction confirmation during the contract upgrade. This led to the minimumVoteWeight parameter in the contract being set to zero, allowing any signature to pass cross-chain verification. [7]

The vulnerable function, _submitWithdrawal, is an internal function used to process withdrawals of cryptocurrencies or tokens. Due to the incorrect initialization of the weight parameter minimumWeight, its value was set to 0, allowing funds to be withdrawn without any multi-signature threshold checks. [8]

As a result of this exploit, approximately 3,996 ETH was drained from the Ronin Bridge and deposited into a MEV bot address starting with 0xc6a. As of August 8th, the white-hat hacker has returned approximately $10 million worth of ETH, and the USDC is expected to be returned later. [9]

Data Highlights

Macro Funds

As of August 8th, the total trading volume of BTC ETFs reached $2 billion, with a market capitalization of $51.9 billion and assets under management (AUM) totaling $47.62 billion. Although BTC ETFs experienced continuous net outflows this week, the outflow amount has decreased. The increasing risk-off sentiment in the macro environment has reduced investors’ appetite for high-risk assets like cryptocurrencies.[10]

ETH ETFs saw a total trading volume of $316 million and an AUM of $5.9 billion. This week, net inflows into ETH ETFs reached $69.08 million, while selling pressure from Grayscale’s ETHE is gradually decreasing.

While BTC ETF net inflows have decreased, the market capitalization of stablecoins has slightly increased by 0.14% to $164.2 billion, indicating a slowdown in the inflow of off-exchange funds. This phenomenon could be attributed to the unstable macro environment, prompting investors to adopt a more cautious stance. [11]

Ethereum Gas Fee

Ethereum gas fees remained in the single digits early this week, indicating low on-chain activity. However, gas fees surged to over 300 Gwei on the 5th when the cryptocurrency market experienced a sharp decline, triggering a wave of liquidations on-chain. [12] As the market recovered, Ethereum gas fees returned to single-digit levels. Circle ranked sixth among the top six gas consumers. Given that USDC is often used to redeem fiat currency on-exchange and can also be seen as a way for off-exchange funds to enter the market, a significant increase in ETH consumed by USDC may indicate substantial capital flows in and out of the exchanges.[13]

Bitcoin Rainbow Chart

The Bitcoin Rainbow Chart indicates that it is currently in the dollar-cost averaging phase, suggesting a relatively positive signal to consider buying BTC soon.

The Bitcoin Rainbow Chart is a visual tool that displays the historical price data of Bitcoin using colored bands. Each color band represents a specific price range. The intensity of the color is generally proportional to the amount of Bitcoin held within that price range; the deeper the color, the larger the holdings.

Market Opportunties

Project Airdrops

Airdrop Project to Watch This Week: Super Champs

Introduction

Super Champs, developed and operated by Joyride Games, is a collection of role-playing mobile games. Currently, two games have been launched: Bullet League and Racket Rampage, both of which are casual mini-games. According to AppBrain data, Bullet League has been downloaded over 1 million times with 43,000 ratings and an average score of 4.4. The Super Champs team consists of seasoned gaming industry veterans from companies such as Disney, EA, and Zynga (the world’s largest social game developer). As stated on the official website, the project has launched a reward event called “SEASON 1,” which will airdrop a certain percentage of tokens to early participants.[14]

How to Participate

1. Connect your Metamask wallet and complete the registration process to join the rewards program.
2. Earn quest points by completing various quests, such as social media interactions, in-game activities, and inviting friends.
3. Holding a Super Champs: Racket Rampage Genesis series Genesis NFT allows you to earn more points. At the end of the season, use your quest points to compete for $CHAMP.

Weekly Fundraising Report

Several projects successfully completed key fundraising rounds this week, covering a wide range of applications including infrastructure, AI, gaming, and tokenized goods systems. According to RootData statistics, from August 2nd to August 8th, a total of 10 projects announced funding, with one project securing over $10 million. Additionally, 3 of the top 10 fundings were seed rounds. Here are the top three fundraisers:

Cartridge – Game infrastructure provider Cartridge completed a $7.5 million Series A funding round, led by Bitkraft Ventures with participation from Fabric, Dune, StarkWare, Primitive, and Ergodic. Cartridge is a Starknet ecosystem game integration platform that simplifies playing games on Starknet. They also announced the launch of their open-source development toolkit and framework Dojo 1.0, which can be used to build verifiable games.[15]

Curio – Curio completed a $5.7 million seed funding round on August 6th. Curio is an on-chain real-time strategy (RTS) game. Players can harvest resources, build bases and fortifications, command armies, and capture opponent towers in a rich 2D world, similar to Sid Meier’s Civilization and Markus Persson’s Minecraft. Unlike other crypto games that focus on on-chain assets, Curio stores all game logic and state changes on the blockchain, replacing traditional game servers.

Andrena – Andrena completed an $18 million funding round on August 7th. Andrena uses cutting-edge radio technology to deploy a series of antennas, creating a wireless network that provides internet access across entire cities. This forms a city-wide wireless network that offers next-generation internet amenities to building owners for free, while providing affordable and attractive internet options to residents and local communities.

What to Watch Next Week

Token Unlock

According to Token Unlocks data, several significant token unlock events are scheduled for next week (August 9 - August 15). Notably, SEI will have a major release on August 15, unlocking roughly 3.18 billion tokens, which represents about 25.5% of its current circulating supply, valued at approximately $705.96 million. Similarly, SAND will unlock around 2.28 billion tokens, accounting for 86.2% of its current circulating supply, with a total value of around $518 million.

Details of the unlocks are as follows:

Crypto Calendar

The blockchain and cryptocurrency industry is set to experience several key events in the coming week. The release of some important macroeconomic data will significantly impact the industry. [16]

Previously, Terra’s official account on X announced that the general claims deadline for the Chapter 11 bankruptcy cases of Terraform Labs Pte Ltd (TFL) and Terraform Labs Limited (TLL) is for 5:00 AM Beijing time on August 10, 2024. If users have claims against TFL arising before January 21, 2024, they must submit them by this general claims deadline. Other key events to watch are as follows:

References

1. Gate.io，https://www.gate.io/price/bitcoin-btc
2. FED，https://www.federalreserve.gov/
3. Arkham，https://platform.arkhamintelligence.com/explorer/entity/jump-trading
4. MakeNow，https://makenow.meme/
5. CoinGecko，https://www.coingecko.com/
6. CoinGecko，https://www.coingecko.com/en/categories
7. Etherscan，https://etherscan.io/tx/0x2619570088683e6cc3a38d93c3d98899e5783864e15525d5f5810c11189ba6cb
8. X，https://x.com/Ronin_Network/status/1820846361945792751
9. Vscode，vscode.blockscan.com
10. Coinglass，https://www.coinglass.com/bitcoin-etf
11. DefilLama，https://defillama.com/stablecoins
12. Etherscan，https://etherscan.io/gastracker
13. UltraSound，https://ultrasound.money
14. Super Champs，https://app.superchamps.com/seasons/?r=airdrops2
15. Cartridge，https://cartridge.gg/
16. WallStreet，https://wallstreetcn.com/calendar

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