Crypto Market Weekly Report: Decentralized Finance Track Valuation Restructuring, Zone Rotation Evident

Market Overview

The main trend of the market

• Market sentiment has shifted from greed to neutral, with BTC oscillating at high levels while altcoins are generally under pressure, indicating an increase in market divergence.
• The market capitalizations of USDT and USDC have both increased, and the total TVL of Decentralized Finance continues to rise to 54.1 billion USD, indicating that the overall market is still attracting new funds.
• The DeFi zone leads the market with a weekly return rate of 16.47%, and DEX trading volume has reached a new high for 2024, demonstrating strong development momentum.
• The Meme coin market is back in focus, performing actively amidst the volatility of the broader market, bringing new liquidity and user growth points to the market.
• DEX projects have gained the highest attention, while AI, GameFi, and other zones have shown weak performance, reflecting a concentration of market hotspots towards infrastructure.
• It is recommended that investors remain cautious, pay attention to re-staking projects and opportunities in the DEX zone, while closely monitoring the Federal Reserve's interest rate meeting.

Market Sentiment Index Analysis

• The market sentiment index has fallen from 91% last week to 53%, still in the bullish zone.
• Altcoins performed weaker than the benchmark index this week, showing a volatile downward trend.
• Affected by leveraged positions, the market experienced approximately $2 billion in forced liquidations, with long positions significantly deleveraging.
• Altcoins are expected to move in sync with the benchmark index in the short term, with a low probability of independent market movements.

Overview of the overall market trend

• The crypto market has been in a wide fluctuation trend this week, with the sentiment index still in the bullish phase.
• Decentralized Finance related projects perform outstandingly, showing that the market remains focused on improving basic returns.
• DEX projects performed well this week, reflecting that on-chain investors have started to actively participate.
• The Meme zone has returned to the spotlight and is starting to attract market attention.

Hot Zone

DEX

This week, due to the significant fluctuations in the overall market prices, many profit opportunities have been created for investors. On-chain investors are actively using DEX for trading, driving the growth of DEX projects.

DEX on-chain data:

• TVL: increased from last week's 25.22B to 26.58B, a growth of 5.39%
• Weekly trading volume: reached 63 billion USD, setting a new high for 2024
• 24-hour trading volume: $7.58 billion

The DEX zone is showing a clear trend of business model upgrades. Leading protocols represented by Hyperliquid and dYdX are transforming into comprehensive financial infrastructure, achieving vertical integration through functional aggregation to create a one-stop Decentralized Finance service ecosystem. This signifies that the DEX track is evolving from a single trading level to an all-encompassing financial infrastructure direction, and the reconstruction of track value is underway.

SUI

The Sui ecosystem has seen high discussion activity this week, with the SUI price rising by 7.8%, outperforming BTC and ETH.

Sui chain data:

• TVL: increased from 1.598B to 1.793B, a growth of 12.88%
• Total accounts: increased by 3.39% to 66,543,317
• DEX average daily trading volume: 466 million USD
• Main Decentralized Finance project TVL growth rate: 1.14%-17.22%

The Sui chain maintains rapid development, with SUI prices performing better than the market, driving the growth of APY for on-chain DeFi projects. At the same time, market volatility provides profit opportunities, attracting a large number of users to participate and promoting the overall ecosystem development.

Decentralized Finance zone

TVL growth ranking

The top 5 projects with the highest TVL growth in the past week ( TVL > 30 million USD ):

1. Synthetix: 87.69%
2. Babylon:67.32%
3. Usual Money:53.61%
4. BounceBit:50.31%
5. Equilibria:40.27%

zone overall performance

• Stablecoin market capitalization steadily grows: USDT increases by 2.91%, USDC increases by 3.23%
• The total TVL of Decentralized Finance reached 54.1 billion USD, with a new influx of funds of 1.69%, maintaining an upward trend for nearly two months.

in-depth analysis

The core driving factors of this round of increase:

1. The market enters a bull market cycle, driving the demand for liquidity to rise.
2. The basic lending interest rate level is rising
3. The profit space of the arbitrage cycle strategy of DeFi protocols expands

This transmission mechanism strengthens the intrinsic value support within the Decentralized Finance zone, forming a positive growth momentum.

Other zone performance

public chain

The top 5 public chains with the highest TVL growth in the past week:

1. Hyperliquid:21.23%
2. Sui:14.45%
3. Algorand:10.99%
4. PulseChain:7.33%
5. Bitcoin:6.99%

Overview of the Gain Leaders

The top 5 tokens with the highest increase in the past week ( excluding low market cap and Meme coins ):

1. USUAL:98.57%
2. BGB:95.01%
3. SUSHI:65.77%
4. ORCA:48.16%
5. ACX:45.88%

Meme Token Price Increase Ranking

1. FARTCOIN:187.53%
2. BABYDOGE:117.03%
3. WOLF:74.42%
4. TURBO:52.45%
5. DOG:40.57%

social media hotspot

The most frequently appearing topic is DEX, and the main tokens on the list include UNI, SUSHI, RAY, and so on.

market theme overall overview

According to weekly return statistics, the DeFi zone performed the best ( 16.47% ), while the AI zone performed the worst ( -7.24% ).

Next Week's Major Events in the Crypto Market

• December 17: US November Retail Sales MoM
• December 18: Hong Kong "Stablecoin Regulation Draft" submitted for first reading in the Legislative Council.
• December 19: Federal Reserve Interest Rate Decision and Economic Outlook Summary
• December 20: US November Core PCE Price Index Year-on-Year

Outlook for Next Week

Macro Factors Assessment

• The market has already priced in the expectation of a 25 basis point interest rate cut at the Federal Reserve's December meeting.
• Pay attention to Powell's speech and economic outlook summary, assessing the direction of monetary policy in January 2025.
• In the short term, the Microsoft shareholders meeting and macro data may dominate market sentiment, and the crypto market is expected to maintain its fluctuations.

zone rotation trend

• DeFi zone: Re-staking projects benefit from risk aversion sentiment, DEX zone activity surges.
• AI zone: Agent sub-sector maintains high attention, Web2 and Web3 ecosystems accelerate integration

Investment Strategy Recommendations

• Maintain a defensive allocation, focusing on the hedging properties of BTC and ETH
• Choose the right time to layout quality zones in Decentralized Finance with intrinsic yields.
• Stay cautious, strictly control positions, and manage risks well.