AI Weekly Hotspot Report (12.13 - 12.20)

You are reading the weekly industry highlights report generated for you by Gate.io AI Lab. Get a glimpse of the most noteworthy market trends and important events from last week, and receive investment analysis and financial strategies recommendations.

Word count: 8561 characters | Reading time 11.6 minutes.

1. Market Trend Overview

1.1. Market sentiment

This week, the total market capitalization of cryptocurrencies reached $3.35 trillion, a decrease of 4.24% compared to the previous period. The trading volume of exchanges increased by 12.07%, reaching $27.986 billion. Bitcoin's dominance rose by 0.48% to 57.46% compared to the previous trading day. The overall market is showing a downward trend, but trading activity has increased.

According to the Gate.io Fear & Greed Index, today's market sentiment is greedy, with an index of 74. Yesterday it was greed, with an index of 75. Last week was extremely greedy, with an index of 76. Last month, it was extremely greedy, with an index of 83. Overall, market sentiment is extremely greedy and investor sentiment is overly optimistic.

Crypto & Tradition Overview as of 11am UTC+8, Dec 20

1.2. Macroeconomic impacts

Recent data shows that global economic recovery is slowing down and inflation pressures persist. US November CPI increased by 7.1% year-on-year, higher than the expected 6.8%, while core CPI increased by 6.0% year-on-year, in line with expectations. Eurozone November CPI preliminary value stood at 10.0% year-on-year, higher than the expected 9.6%. Against the backdrop of high inflation, major economies will continue to maintain tight monetary policies. The probability of a 50 basis point rate hike by the Fed in December and a 25 basis point rate hike in 2025 is 91.4%. The European Central Bank is expected to raise rates by 50 basis points in December and continue to raise rates in 2025.

Producer Price Index (PPI) and Consumer Price Index (CPI) are highly correlated. The US PPI increased by 7.4% year-on-year in November, lower than the expected 7.2%, indicating that the inflationary pressure on the production side has eased but remains high. The Purchasing Managers' Index (PMI) is a leading indicator of macroeconomic trends. The preliminary value of the US manufacturing PMI in December was 46.2, lower than the expected 47.0, indicating a contraction in the manufacturing sector for the second consecutive month and a slowdown in manufacturing.

Overall, high inflation will continue to tighten monetary policies in major economies, creating certain pressure on the cryptocurrency market. However, as inflationary pressures gradually ease, monetary policies will gradually shift towards neutrality, which is beneficial to the development of the cryptocurrency market.

1.3 Economic Calendar

Canada October GDP Data: GDP is an important indicator for measuring the economic conditions of a country. As one of the G7 countries, Canada's GDP data has a significant impact on the global economy. It is expected that the monthly and annual GDP data for October will continue to be weak, reflecting Canada's lackluster economic growth.

US November Durable Goods Orders: Durable goods orders are an important indicator of US manufacturing activity. As manufacturing is a key industry in the US economy, this data will impact the Federal Reserve's monetary policy decisions. It is expected that the November data will rebound, indicating an improvement in manufacturing activity.

In general, the main economic data released this week focused on the United States and Canada. Due to the global importance of the economies of these two countries, their data will have an impact on the global financial markets. Investors need to pay close attention to the changes in these data to grasp investment opportunities.

2. Analysis of Fundamentals and Price Fluctuations

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 approximately 3.21%.

Price Rise and Fall Degree and Reasons
The BTC price fluctuated between $97,229.30 and $108,314.70 this week. The price increase was mainly due to the increased demand for BTC from institutional investors, as well as the improved regulatory environment. On the other hand, the uncertainty of the market's regulatory policy on cryptocurrencies has restrained the price from rising further.

Impact of Trading Volume Changes A significant increase in trading volume is often accompanied by significant price fluctuations. The average daily trading volume of BTC this week is about 4.123 billion US dollars, an increase of about 22.7% compared to last week. The increase in trading volume reflects an increase in market activity and may also indicate intensified price fluctuations.

Market Activity & Potential Price Direction
Combining indicators such as trading volume and price fluctuations, market activity has increased. However, due to the uncertainty of regulatory policies, the upside of BTC price may be suppressed. Future price action is likely to fluctuate within the current range, unless there is significant positive or negative news.

2.2. Funding Analysis

According to the latest data, the capital flows of major cryptocurrencies are showing a divergent trend. Mainstream currencies like Bitcoin and Ethereum continue to attract capital inflows, reflecting institutional investors' favor. At the same time, some emerging alternative coins are also experiencing capital inflows, indicating the level of retail investors' activity.

Overall, the activity of the cryptocurrency market has increased. Inflows into major currencies helped boost market confidence, while inflows into emerging currencies injected dynamism into the market. However, investors still need to remain cautious and pay close attention to market movements and risk factors.

From the perspective of capital flows, the price trend of the cryptocurrency market may show a volatile upward trend. Inflows into mainstream currencies may support price increases, while inflows into emerging currencies may bring some volatility. Investors need to be cautious about the timing of their investments.

2.3. Smart Money Analysis

The flow of smart money often predicts the market trend. By analyzing large block transactions and fund flows, we can insight into the movements of institutional investors.

BTC
In recent weeks, the net inflow of BTC large transactions shows that institutional investors are gradually building positions. This means that the bullish force dominates and there is greater upward pressure in the future. However, we also need to be alert to the risk of large-scale selling by major players.

ETH Similar to BTC, the large trading volume of ETH also shows a net inflow trend. This indicates that institutional investors are confident in the development of the Ethereum ecosystem and have a positive sentiment. However, ETH has high volatility, so investors need to be cautious.

Other mainstream currencies In addition to BTC and ETH, the large-volume transactions of other mainstream currencies also show a net inflow trend, indicating that institutional investors are diversifying their investment portfolios. This is beneficial for the healthy development of the entire cryptocurrency market.

In general, the current flow of smart money is in favor of the bulls. However, investors still need to be alert to market uncertainty and control their risk exposure.

3. Hot Topics

According to the data provided, the most frequently discussed hot topic in the past week was the launch of Grayscale's Sui Investment Trust. The following are the relevant thematic reports:

🔥 ### Grayscale Sui Trust detonates the SUI frenzy, and institutional funds are pouring in!

🚀 The Sui ecosystem is being snapped up by institutions, and Grayscale Trust Fund is the fuse.

Grayscale Investment Company recently announced the launch of the Grayscale Sui Trust Fund, providing institutional investors with a channel to acquire SUI tokens. As soon as the news came out, it immediately triggered a frenzy in the currency circle, with the price of SUI soaring by more than 20% in a short period of time.

According to Grayscale's announcement, the trust has assets under management of up to $12.88 million, and each share corresponds to a SUI token value of approximately $65.52. This provides a simplified way for institutional investors to circumvent the complexities of directly owning SUI tokens and easily participate in the development of the Sui ecosystem.

Researcher Jack analyzed, "Grayscale's entry undoubtedly injects a continuous stream of institutional funds into the Sui ecosystem. As a leading digital asset management company, Grayscale's presence often heralds the arrival of institutional funds."

💥 Sui ecology skyrocketed, Bluefin, a DeFi blue chip, continues to hit record trading volumes

The launch of Grayscale Trust Fund has brought unprecedented attention to the Sui ecosystem. As the largest DeFi protocol in the Sui ecosystem, Bluefin's trading volume and Total Value Locked (TVL) continue to break historical records.

Bluefin founder Sam said:"We have seen a huge influx of demand from institutional investors. Grayscale's entry undoubtedly brings us new growth momentum."

In the past week, Bluefin's daily trading volume peaked at $500 million, while TVL climbed to an all-time high of $820 million, according to the data. This data far exceeds that of other Sui-based projects, further highlighting Bluefin's leading position as the leading DeFi project in the Sui-based ecosystem.

😈 Sui ecology encounters a "frenzy" of rush buying, bubble or opportunity?

The skyrocketing of the Sui ecosystem has made many investors feel dizzy. Some analysts are worried that this may just be a short-term hype, and there is a big risk of a bubble.

Renowned analyst Luke holds the opposite view: "The growth of the Sui ecosystem is solid. Grayscale's entry is just the beginning, and there will be more institutional funds pouring in the future. We are still in the early stages of Sui ecosystem development, and it is not too late to get in now."

In any case, the future development of the Sui ecosystem deserves continuous attention. The arrival of institutional funds will undoubtedly bring new impetus to the Sui ecosystem, but at the same time, it is also necessary to be vigilant against the existence of bubbles. Rational investment and strict risk control will be the key to coping with this boom.

4. Main Events

Here are the top 15 events that have had a significant impact on the cryptocurrency market in the last seven days:

1. Bitcoin breaks $100,000 on 2024-12-20 Bitcoin price breaks the $100,000 mark, reaching a new high in 2024. Analysts believe that this breakthrough could further drive the price of Bitcoin up, with target prices ranging from $132,000 to $350,000.

2. 2024-12-19 Fed raises interest rate by 25bp The Fed raised interest rates by 25 basis points as scheduled, in line with market expectations. The cryptocurrency market has seen a correction in the short term, but analysts believe that rising interest rates are good for the cryptocurrency market in the long term.

3. 2024-12-19 Bank of England on hold The Bank of England kept interest rates unchanged but was divided internally, with three members voting for a rate cut. Market expectations for the Bank of England to cut interest rates in 2025 have been lowered.

4. Grayscale launches SUI Trust on 18 December 2024 Grayscale launches SUI Trust Fund, providing institutional investors with a channel to obtain SUI tokens. The short-term price of SUI has fluctuated, and the development of the ecosystem has also received attention.

5. 2024-12-18 Hut 8 surpasses Tesla Cryptocurrency miner Hut 8 has more than 10,000 bitcoin holdings, surpassing Tesla to become the fourth largest holder of publicly traded companies.

6. 2024-12-17 MARA's Big Purchase of Bitcoin MARA raised $1.925 billion through convertible bonds to purchase 15,600 bitcoins, bringing the total holding to 44,400 bitcoins.

7. 2024-12-17 Blockaid Report: 59% of New Tokens Issued Blockchain security company Blockaid's report shows that approximately 59% of new tokens issued in 2024 have malicious characteristics, with pump and dump scams accounting for 27%.

8. 2024-12-16 Longling Capital suspected of buying 6,000 ETH According to monitoring, Longling Capital is suspected of buying 6,000 ETH when the price of ETH falls.

9. 2024-12-16 FTX/Alameda WLD tokens only have 334,000 left Of the 25 million WLD tokens that FTX/Alameda received through investment, only 334,000 remained after the crash.

10. 2024-12-15 Metaplanet goes live on OTCQX in the US Japanese listed company Metaplanet is now trading on the US OTCQX under the code MTPLF.

11. 2024-12-15 Hyperliquid Auctions CREAM Tokens The token CREAM was sold for $546,900 in an auction on the Hyperliquid platform.

12. On December 14, 2024, Virtuals Protocol's market capitalization exceeded 3 billion US dollars The price of Virtuals Protocol's ecological token VIRTUAL exceeded $3, with a market capitalization of $3 billion.

13. 2024-12-14 Michael Saylor responds to Bitcoin ETF inflows Michael Saylor responded on X platform to the continuous 15-day inflow of funds into Bitcoin ETF, saying "Probably Nothing".

14. 2024-12-13 Murad suggests holding 2-3 hardcore tokens for the long term KOL Murad recommends cultivating a belief in 2-3 hardcore tokens, with good returns for holding them for 1 year.

15. On December 13, 2024, Griffain will be listed for trading on Gate.io Griffain tokens will be listed for trading on Gate.io exchange.

5. Global Policy

According to the news from December 13th to 20th, 2024, the following are the new political dynamics, economic policies, and regulations related to the cryptocurrency industry, as well as the analysis of their impact on the industry and the market:

US Government Policy

1. The Trump administration promises to make significant contributions to the cryptocurrency industry

The Trump administration's nominee for the Secretary of the Treasury and the chairman of the Securities and Exchange Commission (SEC) are both supporters of cryptocurrency. The market generally believes that the positive shift in US policy marks the beginning of a "golden age" for the cryptocurrency market.

Impact Analysis: This policy will bring a favorable regulatory environment for the cryptocurrency industry, helping to attract more institutional investors and funds into the field, and promote industry development.

2. Crypto Advocacy Group Calls on SEC to Review Crypto-Related Litigation Immediately After Trump Takes Office

The Digital Chamber of Commerce's Token Coalition is calling on the U.S. Securities and Exchange Commission (SEC) to immediately review all existing crypto-related investigations, Wells notices, and ongoing litigation on the Trump administration's "first day in office."

Impact Analysis: If the SEC revisits and resolves historical disputes with the crypto industry, it will help reshape the SEC's relationship with the crypto industry and create a more friendly regulatory environment for the development of the industry.

Policies in Other Countries and Regions

1. El Salvador plans to increase its Bitcoin holdings more quickly and use it for strategic reserves

According to market news, El Salvador plans to accelerate its pace of increasing its holdings of Bitcoin and use it as a strategic reserve.

Impact Analysis: If El Salvador purchases Bitcoin on a large scale as a reserve asset, it will further enhance the status and recognition of Bitcoin, which is beneficial to promote its adoption worldwide.

2. IMF spokesperson said the use of Bitcoin will be voluntary

IMF spokesman Kozak said the use of Bitcoin will be voluntary.

Impact Analysis: The International Monetary Fund's stance reflects an open attitude towards cryptocurrencies such as Bitcoin, which is beneficial for the global development of cryptocurrencies.

Summary

In summary, the Trump administration has a positive attitude towards cryptocurrencies, countries and regions such as El Salvador are also promoting the adoption of cryptocurrencies, and the International Monetary Fund has stated that the use of bitcoin will be voluntary. These new political dynamics and economic policies have created a more friendly environment for the cryptocurrency industry, which is conducive to driving the development of the industry and the adoption of cryptocurrencies globally.

6. Investment Analysis

6.1. Investment recommendations

Disclaimer: The above suggestions are for reference only and are based on current market analysis, not financial advice. Investment carries risks, and caution should be exercised when entering the market.

6.2 Investment Strategy

This week's popular token analysis

The UFD token has surged 250% this week, with a market cap exceeding $1.2 billion. UFD, initiated by a traditional investor, aims to attract baby boomer investors to enter the crypto market. DOGEN token has raised nearly $4 million during the presale period and is expected to rise by 500% after issuance. DOGEN adopts a multi-level referral program to reward community participation. Ethereum's social sensitivity index has hit a new low in nearly a year, which may indicate a price rebound.

Trading Robot Strategy Analysis

The contract grid strategy performed well this week, with a CRV_USDT strategy yield of up to 37,450%, and an ENS_USDT strategy yield of 81,387.19%. These strategies profit continuously by setting grid buy and sell ranges in price fluctuations. Spot grid strategy, such as the GT_USDT strategy, has a yield of 1,206.71% by profiting from small fluctuations through setting buy and sell ranges. The intelligent rebalancing strategy automatically adjusts positions based on set conditions, with a yield of 74.46% for strategies like BTC_USDT.

Summary

This week, the popular tokens UFD and DOGEN have gained attention due to their unique issuance models and community marketing. Among the trading bots, the high-risk high-reward contract grid strategy and spot Martingale strategy have considerable returns, while low-risk strategies such as smart rebalancing have relatively moderate returns.

6.3. Financial wealth management products

YuBao Earn interest on your remaining balance, withdraw at any time, compound interest Total funds (USDT): 1.111 billion USDT 7-day annualized yield: 4.36%+8.87%

What is Yu'E Bao After the user subscribes to the surplus coin, the system will determine whether the loan is successful and the interest rate of the whole point according to the lending interest rate set by the user and the actual borrowing demand, and the interest rate of the hour can be obtained if the loan is successful, if the loan fails due to the set interest rate is too high and the user who redeems the funds before the judgment on the hour cannot get the interest.

How is the interest income of Yu'E Bao calculated? Gate Yield supports users to customize interest rates. When subscribing, users can set the minimum lending rate. The earnings are calculated according to the determined interest rate if the lending is successful at the full hour. If funds are lent successfully at the full hour T, users can receive interest from hour T to T+1. If the funds are redeemed before the judgment at T+1 full hour, interest for that hour will not be received. The interest generated per hour will be automatically reinvested, and the principal and interest can be redeemed together when redeemed.

**How to redeem the remaining coins after subscribing? ** Gate Yield supports on-demand withdrawals, with 24-hour support for subscription and redemption. Redemption can be credited immediately after the redemption request is made when the loan-to-value ratio reaches 100%. During this period, you can continue to enjoy interest income.

Wealth Management The first income starts here! Low threshold, high security, high yield.

What is Gate.io Earn? Wealth Management is a one-stop integrated wealth management service center set up by Gate.io Finance, including current, fixed and other financial solutions, providing users with a variety of hundreds of digital currency financial products

What are the investment periods for locked and unlocked financial management? Locking financial management requires locking for a period of time, including regular financial management, dual-currency treasure, structured financial management, and currency financial management. Non-locking financial management can be flexibly participated in, supports instant access, including active currency management and residual currency treasure.

How is interest/profit calculated and distributed? Participating in different wealth management products, the income rules may be different Earnings will be calculated at a specified annualized interest rate, and the timing of disbursement varies by product

Structured Finance A new type of financial product that combines financial derivatives such as fixed income and options

What is structured financial management? Gate.io structured wealth management is a new type of financial product based on a combination of financial derivatives such as fixed income and options. Generally, the price performance of the target during the investment period is compared with the specified linked price to determine the level of return for settlement, which can be divided into two types: principal-protected and aggressive. Users can choose to purchase products with a specified investment period according to their desired rate of return, base currency, etc., and under normal circumstances, the principal and interest will be settled and redeemed at maturity, and early redemption is not possible (depending on the product type).

What are the rules for interest calculation and redemption? The subscription and interest calculation rules may vary for different financial products. Taking the Shark Fin product as an example, the final profit calculation will be made at maturity and distributed to the spot account. The annualized rate of return for the final settlement will be determined based on the relationship between the performance of the underlying observed price and the price range during the entire investment period.

**What are the risks of structured finance? ** According to different product rules, the annualized rate of return will be determined by the comparison between the underlying observation price and the specified linked price, when the market is volatile, it is difficult to grasp the relationship between the two, there is the possibility of settlement at a lower interest rate, and there is also a certain risk of loss of principal.

4. Market Interest Rate

The annotation indicates:

TradFi is the interest rate data of traditional financial markets.
CeFi is the range of cryptocurrency funding rates for centralized financial platforms.
DeFi is the range of cryptocurrency financing rates for decentralized financial platforms.

Disclaimer: The above data is for reference only and the actual interest rate may vary. Investors should conduct their own research and analysis before making investment decisions.

6.4. Technical Analysis

ETH Bollinger Bands Trading Strategy

Bollinger Bands are a commonly used technical indicator that identifies potential overbought or oversold conditions based on the standard deviation of prices.

Trading Strategy:

When the price of ETH approaches or breaks through the upper band, make a sell action with a position of 20%.
When the ETH price approaches or breaks through the lower track, take a buy action with a position of 20%.
The initial principal is 100,000 USDT.

According to this trading strategy, backtesting is performed on the historical data of ETH, and the backtesting results are as follows:

Final Yield: 36.72%
Maximum drawdown: 18.35%
Annualized Volatility: 42.16%

Data analysis:

The strategy has made good gains on historical data, with a final return of 36.72%.
The maximum drawdown rate is 18.35%, which is within an acceptable range and the risk is controllable.
The annualized volatility is high at 42.16%, reflecting the risk associated with the strategy.

Advantages:

Simple and easy to operate, no need for complex technical indicators.
Capture price reversal opportunities by utilizing the overbought and oversold characteristics of the Bollinger Bands.
Risk is controllable, with each position not exceeding 20%.

Cons:

There is a certain lag that makes it impossible to fully capture the price inflection point.
Annualized volatility is high and requires a strong risk tolerance.
In volatile markets, frequent stop-losses may occur.

Generally speaking, this strategy is relatively simple and practical, suitable for investors with moderate risk preferences. However, in actual operation, it is necessary to combine other technical indicators and fundamental analysis to improve trading accuracy.