Crypto market sentiment is low, stablecoin rise shows capital inflow

This week, the crypto market showed a trend of fluctuating decline, with the market sentiment index dropping from 11% to 8%. The market capitalization of stablecoins began to rise rapidly, with USDT reaching 142.7 billion and USDC reaching 57.2 billion, with increases of 0.49% and 2.32% respectively, indicating that institutional funds are re-entering the market, primarily driven by the growth of American funds. Although the release of economic data and reports from the Federal Reserve have alleviated concerns about a recession in the U.S. economy, the market also began to anticipate that the Federal Reserve will cut interest rates three times this year, starting in May, but this has not eased market sentiment. Recent policy fluctuations have triggered strong volatility in Bitcoin prices, intensifying market panic, and most altcoins are performing worse than the benchmark index.

Market Overview

bullish underlying

BTC: Recently, the overall trend of Bitcoin and the encryption industry has been weak, mainly affected by macro factors such as U.S. tariff policies and concerns about economic recession. On-chain data shows that most holders did not sell during this decline but instead began to gradually accumulate. As the market alleviates concerns about economic recession, it is expected that the Federal Reserve will cut interest rates three times this year, and the short-term trend of Bitcoin looks bullish.

S: Despite the decline of the S token this week along with the overall market, Sonic's fundamentals remain unchanged. Sonic's TVL still maintains a 9.23% rise, and the main on-chain DeFi projects have also seen growth. The high APY attractiveness of Sonic's on-chain projects remains strong, ranking 6th among public chains in daily revenue, far exceeding other public chains with similar TVL.

AAVE: AAVE rose 21.38% this week against the trend, with a TVL growth rate of 5.86%. Its popularity mainly stems from proposals to optimize governance and token economic models, as well as the White House's support for abolishing DeFi trading report rules. These measures are expected to bring new vitality to the DeFi industry.

BERA: Although the price of the BERA token has fallen, the on-chain data and fundamentals of Berachain remain unchanged. The main projects in its ecosystem have seen a slowdown in TVL rise, but continue to maintain a high growth rate. High APY projects such as Infrared Finance and BEX continue to attract investors, and the demand for BERA tokens remains strong.

bearish underlying

APE: As a representative of the NFT and Gamefi sectors, APE has lost attention in the current market environment. The upcoming large-scale token unlock may bring significant selling pressure.

APT: Although Bitwise has submitted an application for a spot Aptos ETF, Aptos is not included in the cryptocurrency reserve list mentioned by Trump. The upcoming token unlock may trigger selling pressure.

MERL: The TVL of Merlin has decreased significantly by 12.44%, with continuous outflow of funds from major ecological projects. Considering the adverse development of BTC ecological projects, MERL may face the risk of further decline.

TON: The TVL on the Toncoin chain continues to decline, with major ecological projects experiencing capital outflows. After the SocialFi boom fades, the user profit effect decreases, and TON may continue to fall.

Hot Tracks

Aave

Aave performed outstandingly this week, with a TVL rise of 5.86% and a coin price increase of 21.38%. The reasons for its popularity include:

1. Optimize ecosystem governance and token economic model, including launching buyback plans and establishing new mechanisms to enhance staking rewards, etc.
2. The White House supports the abolition of DeFi trading report rules, which is expected to reduce compliance burdens and stimulate innovation.

Future Outlook:

• Aave, as a leader in DeFi, may lead the direction of industry development.
• The repurchase plan demonstrates Aave's strong cash reserves and diversified income structure.
• May lead to more DeFi projects turning to dividend or buyback models.
• Compared to Maker, Aave's current price-to-earnings ratio is relatively high, making its cost-performance ratio relatively low.

Berachain

Berachain's TVL rose 17.21% this week, reaching $3.449 billion, but the price of the token BERA fell by 12.94%.

Hot reasons:

• Major on-chain DeFi projects like Infrared Finance and BEX maintain high APY, attracting investors.
• The lending project Dolomite offers high borrowing rates, increasing the demand for BERA.

Future Outlook:

• Berachain drives ecosystem growth through high APY, creating a positive feedback loop.
• The founder stated that they will continue to repurchase the early round token supply to reduce circulation.
• The current staking ratio of BERA is about 30%, with still room for growth.
• On-chain APY and TVL changes are key indicators for assessing ecosystem vitality.

Market Theme Overview

This week, the SocialFi sector performed the best, while the PayFi sector performed the worst.

Important Events Next Week

• March 12: US February CPI year-on-year announced
• March 13: Web3 Amsterdam 2025 conference held

Summary

This week, the crypto market has shown a complex pattern amid fluctuations and panic sentiment. Despite the inflow of funds into stablecoins and the solid fundamentals of some hot projects, the overall market is still affected by macro uncertainties. Projects like BTC, AAVE, and Berachain are expected to stand out due to their fundamental advantages and innovative strategies. Investors need to continuously pay attention to on-chain data, policy trends, and the upcoming unlocking events to seize opportunities and mitigate risks.