Over the past week, the market successfully absorbed the selling from various whales and managed to touch resistance levels. How will the next market movements unfold? Recently, weak U.S. economic data have heightened expectations of interest rate cuts. Federal Reserve Chairman Powell signaled dovishness during a two-day congressional hearing, reflecting signs of fatigue in the U.S. economy. The Ethereum spot ETF is set to launch soon, and Bitcoin regained upward momentum this week, rebounding steadily after initially testing $53,000, sparking renewed enthusiasm in the market. We believe that if Bitcoin can stabilize above the $60,000 mark, it will reshape market confidence and potentially revisit the previous high of $70,000 in the short term.
Macro Environment
Significant adjustment in U.S. unemployment rate
In June, non-farm payrolls in the U.S. fell by 12,000 to 206,000, higher than Bloomberg’s consensus expectation of 190,000, with a downward revision of 110,000 for April and May combined. Average hourly earnings decreased by 0.1 percentage point to 0.3%, as expected, while the unemployment rate unexpectedly rose to 4.1%. Employment in the service sector dragged down private sector job performance, although there was a rise in government sector employment. June non-farm data indicates that economic growth momentum in the U.S. for the second quarter may have slowed to near potential growth rates, with further weakening expectedin the future.
Enhanced expectations for Federal Reserve interest rate cuts
Timiraos, the voice of the Federal Reserve, believes that the expectation of an interest rate cut this time is more credible. Powell’s reasons for cutting interest rates last year seemed untenable when inflation rose in the first quarter and the economy grew steadily. This week, Powell returned to Congress to once again lay the groundwork for a rate cut. The rationale this time is much stronger. If CPI data this week shows no significant fluctuations, September starting a rate-cutting cycle is highly probable. Currently, the market has begun pricing this in, with the probability of a rate cut in September stable at over 70%. Traders are betting that September will mark the beginning of rate cuts.
Market Status and Future Trends
This week, selling pressure in the market continued to weaken, with Bitcoin (BTC) prices showing an upward trend, boosting overall market strength. On July 15th, the Ethereum spot ETF is expected to launch, providing short-term support to market sentiment. As a result, the Bitcoin fear index is gradually improving.
Bitcoin’s recent performance resembles that of the S&P 500, showing a return to relative strength. As mentioned in our publication last week, after the easing of selling pressure, significant buying opportunities emerged in the short term.
High-Quality Track
-
Bitcoin Layer 2 Sector
Hotspot: UNISAT’s New Product Release
UniSat announced a major update to its Swap product on July 7th. Most of the engineering work for the Swap module has been completed, with remaining tasks focused on assisting other index compilers in effectively identifying and calculating records related to the Swap module. The team has also extended Bitcoin using the FractalBitcoin method. The team is confident in delivering FractalBitcoin in September. On FractalBitcoin, the official will provide a swap product called FractalSwap, with functionalities similar to the mainnet swap module to ensure liquidity for projects on FractalBitcoin right from the start. In subsequent iterations, BTC and other mainnet assets can also exist as brc-20 wrapped assets on FractalBitcoin, providing greater flexibility.
Next Market Trends Analysis
The emergence of mining scripts represents the first historical opportunity to profit from Bitcoin transaction fees rather than relying solely on fixed block rewards, which is crucial for sustaining the Bitcoin ecosystem. If unemployment rates cool off this week, it is anticipated that Bitcoin Layer 2 (L2) solutions may continue to outperform Bitcoin.
-
Ethereum Sector
Hotspot: Imminent Launch of Ethereum Spot ETF
An Illinois court has ruled Ethereum as a commodity, clearing obstacles for the approval of an Ethereum spot ETF. The market believes that the ETH spot ETF may receive SEC approval on July 15th, potentially yielding significant gains for participants deeply involved in the Ethereum ecosystem.
Specific Coin Listings:
Uni (Uniswap): Uniswap is a decentralized exchange protocol that facilitates cryptocurrency trading through Automated Market Makers (AMMs), eliminating the need for traditional centralized exchanges.
LDO (Lido): Lido is a decentralized Ethereum 2.0 staking service that allows users to stake ETH on the Ethereum 2.0 Beacon Chain while receiving stETH tokens pegged 1:1 to ETH.
Ethena (ENA): Ethena is a synthetic dollar and internet-native revenue platform built on the Ethereum blockchain. It provides stable synthetic dollars (USDe) through a Delta-neutral hedging process.
User Focus
-
Twitter Hot Tokens
$IO
IO.NET is an open-source, cross-platform network communication library designed for high-performance asynchronous network programming on the .NET platform. It provides a concise and powerful way to handle network communications, supporting protocols such as TCP, UDP, and Unix domain sockets, suitable for building various network applications and services.
On July 5th, @maid_crypto on platform X stated: “IO insider trading transferred 2.5 million IO.”
IO.NET official @TheAntiApe clarified: “This FUD is indeed misinformation: 1. The contract is for IO’s third-quarter airdrop contract, originating from streamflow. The 2.5 million IO tokens for community rewards and the remaining GPU rewards are separate contracts, hence this contract shows a total of 2.5 million tokens. 2. @maid_crypto’s link filters out transactions of over 10,000 tokens; removing the filter reveals all small claims made through the contract.”
$SD
Stader is a non-custodial, smart contract-based staking platform aimed at facilitating the discovery and use of staking solutions. Stader is building critical staking middleware infrastructure for multiple PoS networks to serve retail cryptocurrency users, exchanges, and custodians. Additionally, Stader’s mission is to simplify staking and provide optimal risk-adjusted returns for delegators. We envision a future where our staking-based DeFi cornerstone will unleash a brand new world of staking derivatives.
Several major exchanges have already begun listing processes for $SD.
2）Popular DApp
Layer3
Layer3 is a protocol creating a fluid attention market across EVM, Solana, and Cosmos. Since its launch, Layer3 has facilitated 96 million interactions and released the L3 token. Holders of L3 tokens can participate in governance and staking. An initial airdrop is scheduled for summer 2024, with a total supply of 300 million tokens. The initial airdrop accounts for 5%, and community allocation accounts for 51%. The Layer3 Foundation will release token economics and distribution schedules. Governance allows holders to manage the protocol, with 51% of the supply dedicated to the community.
