Web3 Weekly Research | This week, the market declined overall due to the Federal Reserve's interest rate cut; Ethereum's market dominance dropped to 12%

2024-12-20, 09:09

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##Weekly Overview
This week, the <a href="/price" target="_blank" class="blog_inner_link">crypto market</a> overall saw a decline, entering a phase of market correction. The majority of major cryptocurrencies were affected by external factors, with prices rising through the start of the week, only to experience a sharp decline in the middle of the week. There has been no sign of recovery so far. The market volatility has led to noticeable drops in market capitalization, and sentiment has significantly decreased.

<a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) experienced a continuous drop, falling to around $96,500 from a peak of around $108,000. Overall, major cryptocurrencies are in a downward trend, and it seems likely the market will experience further declines in the short term. The market sentiment index has dropped to 69 and may continue to fall through the weekend. The total market capitalization of the <a href="/price" target="_blank" class="blog_inner_link">crypto market</a> has seen a significant decline compared to the same period last week, now at around $3.32 trillion, down 5.8% in the last 24 hours.
Compared to last week, this week the <a href="/price" target="_blank" class="blog_inner_link">crypto market</a> showed a further decline, with the leading cryptocurrencies experiencing a sharp short-term drop, dragging the market as a whole lower. BTC has returned to its recent lower price range of around $95,000, while ETH has fallen to the $3,300–$3,400 range.

The overall market downturn is primarily due to external factors, especially after the Federal Reserve lowered its key policy interest rate by 25 basis points and hinted that future rate cuts may slow down. This caused a price plunge for major coins like BTC and ETH, resulting in the market’s overall decline. As a result, most of the top-performing coins this week saw relatively modest gains, with only the memecoin PENGU achieving an increase of over 400%.

This weekend, there is a higher probability that the market will continue its downward correction, though we might see small fluctuations with minimal chances of a strong recovery in the near term.
##Crypto Market 
🔥 In the 2024 <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> bull market, <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> has not kept up with Bitcoin’s momentum. Bitcoin’s dominance surged from 50% to 61% but has since dropped to 54%, while Ethereum’s dominance has sharply decreased from 18% to 12%.

🔥 On December 16th, Vana, a decentralized AI data liquidity network, officially launched its mainnet and introduced the VANA staking feature.

🔥 According to data from GameFiHub on December 14th, the top three <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a>-based game projects are:
GMT (<a href="/price/stepn-gmt" target="_blank" class="blog_inner_link">STEPN</a>): Market cap of $591.27 thousand
Metaplex (MPLX): Market cap of $233.24 thousand
Crown (by ThirdTimeGames): Market cap of $103.19 thousand

🔥 MarkLongo (@Squirrel_Dad12), the owner of the popular squirrel meme Peanut, has issued a cease-and-desist letter to Binance via his law firm.

🔥 Galaxy Research’s VP Christine Kim summarized the 147th <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> Core Developer Consensus (ACDC) call.

🔥According to data from Infinite Market Cap, <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>'s market price rose above $4,000 this week, with its market cap reaching $482.64 billion and a 24-hour increase of 3.86%. However, it quickly dropped thereafter.

🔥 On-chain analyst @ai_9684xtpa reports that the WorldLiberty address associated with Trump has purchased non-stablecoin assets, including <a href="/price/link-ln" target="_blank" class="blog_inner_link">LINK</a>, <a href="/price/aave-aave" target="_blank" class="blog_inner_link">AAVE</a>, ENA, and ONDO. Half of these assets belong to leading DeFi applications, while the other half are Real-World Asset (RWA) tokens.

🔥 According to CoinDesk, after NFT trading platform OpenSea registered an entity in the Cayman Islands, rumors have started circulating that it may be preparing for a token airdrop.

🔥 IntoTheBlock reported that <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> (ETH) returned above $4,000 this week, with 7.2 million ETH being bought just below the $4,000 price range, indicating strong market demand.

🔥 The Block reported that <a href="/price/avalanche-avax" target="_blank" class="blog_inner_link">Avalanche</a> has launched the Avalanche9000 upgrade, which significantly reduces the cost of deploying subnet blockchains and running smart contracts, while optimizing the validation model. The base fee for the C-chain has been reduced from 25 nAVAX to 1 nAVAX.

🔥 On December 17, Monad announced the establishment of the Monad Foundation, which will focus on promoting validator-led governance, community improvement proposals, developer documentation, and ecosystem development.

🔥 On December 18, rumors circulated that MicroStrategy (MSTR) might enter a lockup period in January 2025, during which it will suspend the issuance of stocks and convertible bonds through “at-the-market” (ATM) offerings to raise funds for <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> purchases.
🔥 According to relevant pages, <a href="/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> community members rejected a preliminary proposal (pre-PIP) initially put forward by <a href="/web3" target="_blank" class="blog_inner_link">Web3</a> risk provider AllezLabs, in cooperation with DeFi protocols Morpho and Yearn, to leverage around $1.3 billion in DAI, USDC, and USDT reserves on the PoSChain bridge for yield generation.

🔥 Lookonchain data reveals that BlackRock’s spot Ethereum ETF, iShares Ethereum Trust ETF, currently holds over 1 million ETH, amounting to 1,025,378 ETH (approximately $4.04 billion).

🔥 According to Cryptoslate, <a href="/price/cardano-ada" target="_blank" class="blog_inner_link">Cardano</a> founder Charles Hoskinson posted on social media X on December 18, calling for the <a href="/price/cardano-ada" target="_blank" class="blog_inner_link">Cardano</a> Foundation to move to a jurisdiction that allows users to elect board members. He also encouraged the <a href="/price/cardano-ada" target="_blank" class="blog_inner_link">Cardano</a> community to inquire about the foundation’s board structure and decision-making process.

🔥 On December 18, Galaxy Research’s Monday report indicated that the NFT market is showing signs of recovery.

🔥 MicroStrategy (MSTR) stock has risen by 546% this year, with a market value of $99.4 billion. The main reason for this surge is the company’s holding of 439,000 BTC.

🔥 According to Cointelegraph, 10% of Ethereum validators have expressed support for increasing the gas limit in a single Ethereum block to 30 million. Ethereum core developer Eric Connor mentioned that this could reduce transaction fees by 15% to 33%.

🔥 <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>.com reported that the latest NFT Evening research shows that after Bitcoin's price surpassed $100,000, 14,211 new millionaires and 4 new billionaires were created.

🔥 Sonic Labs announced on X that “Sonic Gateway will launch in the coming days, allowing users to bridge USDC, EURC, and WETH from Ethereum to Sonic.”

🔥 MicroStrategy co-founder and chairman Michael Saylor, in an interview, stated that once the current fundraising plan is exhausted, the company will shift from leveraged Bitcoin exposure to focusing more on fixed-income securities to raise funds for purchasing cryptocurrencies.

🔥 According to Artemis data, on December 17, <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> handled 66.9 million transactions, surpassing the total number of transactions across other major blockchains. In terms of user participation, <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> accounted for more than half of the daily active addresses across major blockchain platforms during the same period.

🔥 10x Research published a report stating that while Federal Reserve Chairman Jerome Powell’s tone is expected to be slightly hawkish, the updated median interest rate forecast from the Fed has unsettled the market. The forecast suggests interest rate hikes not only in 2025 but also in 2026 and 2027.

🔥 According to a recent Glassnode report, Bitcoin's ongoing bull market marks a significant shift in wealth from long-term holders to new investors, signifying the market's maturity.
##Regulation & Macroeconomic Policy
🔥 On December 17, Phoenix News reported that the 21Shares <a href="/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a> Trust Fund has completed its registration in Delaware, USA. The registered name is “21Shares <a href="/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a> Trust,” and the registered agent is CSC Delaware Trust Company.

🔥 On December 17, FTX announced that its court-approved Chapter 11 reorganization plan will take effect on January 3, 2025, with the first allocation date set for that day. The first distribution is expected to be completed within 60 days after the effective date and will apply to approved claims in the convenience class.

🔥 Nate Geraci, President of The ETF Store, posted on X, stating that Invesco (the fourth-largest ETF issuer) today filed multiple share-class structure applications with the U.S. SEC. Nearly 40 fund companies are seeking this structure iteration. It is expected to become the hottest ETF narrative of 2025, along with other spot cryptocurrency ETFs.

🔥 Bloomberg ETF analyst James Seyffart stated that the SEC’s approval of <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> and <a href="/price/xrp-xrp" target="_blank" class="blog_inner_link">XRP</a> ETFs has been delayed and will be reconsidered once the new SEC management takes office. Legal issues need to be resolved before approval.
##Crypto Market Highlights:
⭐️ Over the past week, the <a href="/price" target="_blank" class="blog_inner_link">cryptocurrency market</a> has experienced a noticeable downturn, entering a more clearly defined bearish phase. This decline has largely been driven by external factors, particularly the Federal Reserve's decision to lower interest rates, which has led to shifts in market sentiment. As the weekend approaches, the market remains in a state of oscillating decline, with further downside movement expected. There is little likelihood of a rebound in the short term, and the market continues to show signs of further correction.

⭐️ Due to the overall market downturn this week, the growth of major cryptocurrencies has been relatively limited. Compared to previous weeks, the price increases of top-performing coins have been more modest. However, memecoin PENGU has stood out as the biggest gainer of the week, with a surge of 471.68%. This spike was primarily driven by the coin's recent launch and a short-term price rally. PENGU reached a weekly high of $0.05063, but has since corrected to around $0.026.
![](https://gimg2.gateimg.com/image/article/17346904281.png)
##Bitcoin and Ethereum Weekly Performance
###Bitcoin (BTC)
![](https://gimg2.gateimg.com/image/article/17346904092.png)
(source：TradingView)

This week, Bitcoin (BTC) experienced a significant price decline, largely influenced by external factors. Mid-week, BTC saw a continuous downward correction after reaching a high near $110,000. The price then sharply dropped, hitting a low below $96,000. Currently, BTC is trading within a new range of $96,000–$98,000.The main cause of this downturn was the impact of external market factors, especially the Federal Reserve's interest rate cut, which affected the broader market sentiment. This, combined with a series of long position liquidations, triggered further downward pressure on BTC prices.

Analysts believe the price movement of BTC this week was primarily driven by the overall market's reaction to the Fed's interest rate policy. The liquidations within the BTC market also led to significant losses and contributed to a sharp decline in price. Despite the significant drop, BTC is still holding within a relatively stable price range, indicating some resilience. Currently, the market seems to be struggling for a rebound, with BTC showing little signs of strong upward momentum in the short term. 
###Ethereum (ETH)
![](https://gimg2.gateimg.com/image/article/17346903943.png)
(Source：TradingView)

Ethereum (ETH) followed a similar price trend to Bitcoin (BTC) this week, though the price adjustment for ETH was relatively smaller. Compared to the previous week, ETH briefly surged above $4000, but with the broader market's downward trend mid-week, ETH experienced a steady decline, including a series of short-term corrections.The lowest point for ETH this week dropped to $3300, and currently, the price is holding around $3430. ETH has seen a weekly decline of approximately 11.65%.At present, ETH is in a phase of continued minor fluctuations, with the expectation of further price movement over the weekend. However, the likelihood of a significant rebound in the short term appears low, given the current market conditions.
##Web3 Project Trends
This week, most <a href="/web3" target="_blank" class="blog_inner_link">Web3</a> projects experienced notable declines in market value, in line with the broader market trend. As we approach the weekend, there is a higher probability of further downward movement, with little chance of a major price rebound.
![](https://gimg2.gateimg.com/image/article/173469116720241220-182826.jpeg)

<div class="blog-details-info">
<div>Author:** icing**, Gate.io Researcher
<div>Translator: Sally
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.All investments carry inherent risks; prudent decision-making is essential.
<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>

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