Bitget Research: U.S. Stocks Market Sharp Decline Causes Panic Selling in Cryptocurrencies, Crypto Market May See Correction in the Short Term

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Bitget Research2024/07/25 09:01

By:Jarseed & Aaron

In the past 24 hours, many new popular tokens and topics have emerged in the market, which are likely to be the next wealth creation opportunities.

In the past 24 hours, many new popular tokens and topics have emerged in the market, which are likely to be the next wealth creation opportunities.

Overview

Yesterday, major U.S. stock indexes fell sharply, with the Nasdaq dropping 3.64%, as market risk aversion increased, and cryptocurrencies followed suit. The Ethereum ETF experienced a net outflow of $100 million, with Grayscale being the main contributor to the outflow. The highlights are as follows:

Sectors with strong wealth creation effects: AI sector and Ton ecosystem.
Top searched tokens and topics: Layer 3, Ordinals, and Tapswap.
Potential airdrop opportunities: EIGENPIE and Tonstakers.

Data collection time: July 25, 2024, 4:00 AM (UTC)

1. Market Environment

Major U.S. stock indexes fell sharply, with Tesla dropping 12.33% and the Nasdaq by 3.64%. The fear index (VXX) rose by 13.55%, heightening the market's risk aversion, leading cryptocurrencies to decline as well.

The Ethereum ETF was approved, and on-chain data indicated that some whales sold the news, leading to a net outflow of $100 million from the Ethereum ETFs yesterday, with Grayscale being the primary source of these outflows. The market will require some time to absorb the short-term selling pressure from Grayscale.

Futures data shows significant liquidations of ETH long positions, with $100 million liquidated in 24 hours. The funds positioned for the Ethereum ETF news had no exit route, leading to a stampede effect due to the price decline.

2. Wealth Creation Sectors

2.1 Sector Movements — Solana Ecosystem (JTO, PYTH, and JUP)

Primary reasons:

Following the approval of the Ethereum ETF, the market has broadly begun to bet on the next ETF to be approved, with Solana emerging as the most likely candidate. The Solana ecosystem tokens have been particularly active recently, with all projects showing good progress and both volume and price rising.
Solana chain has surpassed Ethereum for the first time in DEX trading volume in the past 30 days, making it the most used chain by this metric. With the growth in on-chain activity, Solana's DeFi infrastructure sector is undergoing a valuation adjustment, prompting a general increase in valuations for these sectors.

Gainers: Opening JTO, PYTH, and JUP positions at the current low prices is advisable.

Factors affecting future market conditions:

On-chain activity: The valuation of DeFi infrastructure depends on whether the chain can maintain a stable top market share, i.e., active on-chain users and DEX trading volume. These are crucial for different chain's DEX, PERP, oracles, and liquidity staking projects. Investors should closely monitor such data to assess market valuation adjustments.
Following the launch of the Ethereum ETF, market funds have generally started to anticipate the listing of a Solana ETF. Investors should closely monitor the fund flows in SOL trading, paying attention to such changes to capitalize on trading opportunities.

2.2 Sectors to Focus on Next – TON Ecosystem

Primary reasons:

In the otherwise dull primary crypto market, TON is one of the few public chains that have kept users in a state of FOMO for months. Yesterday, Binance Labs announced an investment in Pluto Studio, the publishing platform for Telegram-based Web3 game Catizen. While the investment amount was not disclosed, the announcement has sparked interest in TON ecosystem mini-games. Telegram CEO Pavel Durov announced on his channel that the mini-game Catizen, which has over 26 million players, has earned $16 million through in-app purchases and donated 1% of its earnings to rescue stray cats.

Factors affecting future market conditions:

The ability of high-traffic projects within the TON ecosystem, such as Catizen and Hamster Kambot, to continue generating wealth effects will be crucial. The speed at which the TON ecosystem can address the gaps in its DeFi offerings will significantly influence the stability and potential for further increases in TON.
Currently, most high-traffic projects in the TON ecosystem face challenges in monetization. Web3 projects with high traffic used to be relatively rare in the crypto industry. How to monetize and manage the influx of massive users to continue the wealth creation narrative is a critical issue that every project and participant needs to consider and focus on.

3. Top Searches

3.1 Popular DApps

Layer3 (DApp)

Distribution, identity, and incentive infrastructure Layer3 has opened up claims for its airdrop, with L3 tokens distributed based on users' historical and current activities, influenced by factors such as the number of CUBEs, task completion, cross-chain transactions, and swap volumes. Participants must acquire at least 50 CUBEs by May 10. Additionally, users must mint Trident NFTs to engage in the second season's distribution. The project's token is now listed on Bitget Pre-Market, enabling those with airdropped tokens to sell early and lock in profits.

3.2 X (former Twitter)

Ordinals (BRC-20)

BRC-20 assets exhibited significant differentiation during the substantial market pullback yesterday, with ORDI falling 6.57% in 24 hours, breaking below the $35 mark, while the second-largest project, SATS, rose by 5% in the same timeframe. The severe divergence in BRC-20 assets suggests that positive news may be anticipated in the future, prompting investors to strategically position their assets amidst the market downturn.

3.3 Google Search (Global and Regional)

Global focus:

Tapswap:

TapSwap, a Tap-to-earn Telegram mini app, was recently launched on the TON blockchain. Since its launch on February 15, 2024, TapSwap allows users to earn in-game tokens by tapping and completing tasks. The app now boasts over 50 million users globally, with nearly one million active online users. Yesterday, TapSwap announced on X that it will hold an AMA event in collaboration with OKX Wallet. This news, along with numerous users participating in the USDT/USDC swap promotion on TapSwap, created a buzz on X, boosting its search popularity.

Regional focus:

(1) There is no noticeable trend in Google Trends among Asian countries, with BTC, SOLANA, and AAVE becoming the focus of market attention. Market websites like Coinglass and Coinmarketcap also ranked high in searches across Asian countries.

(2) In the CIS region, there is a noticeable trend of memecoins in hot searches, such as PENG. In contrast, Europe and the USA primarily show interest in blue chip assets like BTC, ETH, ASI, ADA, and AVAX.

4. Potential Airdrop Opportunities

EIGENPIE

Eigenpie is a SubDAO focused on restaking, offering LST holders the opportunity to restake their assets and enhance their profit potential. By creating dedicated liquid restaking versions for each LST accepted on the platform, Eigenpie effectively isolates the risks associated with any specific LST.

The project's TVL has recently surpassed the $1.446 billion. The sector has a high valuation and Eigenpie's potential airdrop returns are promising. Rumors circulate that EIGENPIE might soon be listed on Binance as part of the upcoming Launchpool project.

How to participate: Visit the project website and stake ETH or swETH into Eigenlayer via the protocol. Additionally, you can directly delegate your Eigenlayer token voting rights to Eigenpie.

Tonstakers

Tonstakers is the largest liquid staking service provider in the TON ecosystem. Users can stake their TON in the protocol to earn a 3.8% APY. The project currently boasts a TVL of $220 million, indicating a high potential valuation.

It has garnered attention from the Ton Foundation and currently has 68,000 stakers. Tonstakers collaborates with Ton's core developers, Tonkeeper, and OKX, which supports its potential for future token issuance.

How to participate: 1. Visit the project's official website and select Stake Now; 2. Connect your Ton wallet to stake.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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