Crypto Market Weekly Report: Stablecoin Rise Indicates Capital Inflow

This week, the crypto market has shown a volatile downward trend, with the market sentiment index falling from 11% to 8%. Nevertheless, the market capitalization of stablecoins has started to rise rapidly, indicating that institutional funds are re-entering, primarily driven by the growth of U.S. funds. Although the release of economic data and the Federal Reserve's statements have alleviated recession concerns, the market expects the Fed to cut interest rates three times this year. However, recent policy fluctuations have triggered sharp volatility in Bitcoin prices, intensifying market panic. Most altcoins have performed weaker than the benchmark index.

Potential Rise Targets

BTC

Recently, the overall trend of BTC and the crypto market has been weak, mainly due to the following factors:

1. Macroeconomic level: Trump's tariff policy raises inflation concerns, US GDP forecasts are lowered, the US-Ukraine mineral agreement is shelved, and there is uncertainty regarding the Federal Reserve's interest rate cuts.

2. BTC itself: High-level consolidation has led to some long-term holders and large investors selling off, lacking new positive news and capital inflow, and Trump's Bitcoin strategic reserve is below expectations.

3. The price drop triggered panic selling, and institutions continued to reduce their holdings.

But positive changes are currently emerging:

1. Economic data and Federal Reserve statements ease recession worries, and the market expects interest rate cuts to begin in May.

2. On-chain data shows that most holders have not sold, but rather are accumulating.

Therefore, I am optimistic about the BTC trend next week.

S

Despite the decline of the S token this week along with the market, Sonic's fundamentals remain unchanged:

1. TVL rose by 9.23%, with major DeFi projects achieving growth.

2. On-chain APY remains high, with major liquidity pools reaching 30%, and borrowing rates increasing to 14%.

3. Daily income of $210,000, ranking 6th among all public chains, far exceeding other public chains with similar TVL.

The S token's decline is mainly following the market trend, the fundamentals have not changed, and the rise logic still exists.

AAVE

AAVE rose by 21.38% this week against the trend, showing outstanding performance:

1. TVL rise 5.86%, ranking second among the top 20 DeFi projects.

2. Optimize governance and token economic model, including token buybacks, increasing staking rewards, improving liquidity, etc.

3. The White House supports the repeal of DeFi trading report rules to reduce compliance burdens.

Although it is currently just a proposal, AAVE's financial situation is strong, supporting innovation and is expected to be implemented. This move may trigger a buyback frenzy in the DeFi industry, injecting vitality into the stagnant sector.

BERA

Despite the decline of BERA this week, the on-chain data and fundamentals of Berachain are positive:

1. The growth rate of major project TVL has slowed down, but LSD and DEX projects still have a rise of 25-31%.

2. Infrared Finance maintains an WBERA APY of around 120%, and the APY of the BEX stablecoin pool remains at around 16%.

3. Dolomite's lending rate is as high as 48.08%, increasing the demand for BERA.

The decline of BERA is mainly influenced by the market environment, and there have been no changes in the project itself; the logic for a rise still exists.

Potential Downward Targets

APE

1. APE mainly involves the NFT and GameFi sectors, but these areas have been occupied by the Meme sector, capturing market share.

2. On March 16, 15.37 million APE will be unlocked, accounting for 1.54% of the total locked amount, mostly from early VCs, which may bring selling pressure.

3. After the project loses vitality, investment institutions may continue to reduce their holdings to recoup funds.

APT

1. On March 5th, Bitwise submitted an application for a spot Aptos ETF, bringing certain expectations.

2. However, Aptos was not included in the cryptocurrency reserve list announced by Trump.

On March 12, 11.3 million APT will be unlocked, accounting for 1% of the total locked amount, all held by institutions, which may create selling pressure.

4. If the White House summit announces details about encryption reserves, funds and attention may shift, which would be unfavorable for Aptos.

MERL

1. Merlin TVL decreased significantly by 12.44%, mainly due to DEX, Restaking, and cross-chain projects.

2. As BTC-L2, the ecosystem projects are limited, and major project funds are being withdrawn on a large scale.

3. The development of BTC ecological projects is not going smoothly, and market attention is low.

4. The sharp drop in BTC has led to the withdrawal of pledged funds.

5. The MERL fell slightly this week, only -1.8%, and may face a further decline.

TON

1. The TVL on the Toncoin chain decreased significantly by 10.68%, with almost all ecological projects' TVL declining.

2. TVL has been in a continuous downward trend since last year.

3. SocialFi projects are on the fringes of the industry, lacking hit products.

4. The popularity of on-chain mini-games is declining, and the user profit effect is weakening.

5. The sentiment in the encryption industry is low, the price of TON has plummeted, and investors are generally bearish.

Market Sentiment

The market sentiment index has dropped from 11% last week to 8%, entering the extreme fear zone.

Hot Track Analysis

Aave

Aave performed outstandingly, with a TVL rise of 5.86%, ranking second among the top 20 DeFi projects. AAVE coin price increased by 21.38%, performing excellently among the top 50 tokens by market capitalization.

Reason for the heat:

1. Optimize ecosystem governance and token economic model
2. The White House supports the abolition of DeFi trading report rules

Future Outlook:

• Aave, as a benchmark in DeFi, its initiatives may influence the direction of industry development.
• The repurchase plan demonstrates financial strength and may lead DeFi projects to shift towards dividend/repurchase models.
• The price-to-earnings ratio is 60.86 times, higher than Maker's 20.75 times, making it relatively less cost-effective.

Berachain

Berachain TVL rise 17.21%, reaching $3.449 billion, ranking sixth among public chains. BERA price corrected by 12.94%.

Reason for the heat:

• Major DeFi projects maintain high APY to attract users
• The founder repurchased part of the early round supply

Future Outlook:

• Continuously monitoring the APY performance of on-chain DeFi projects is crucial.
• The BERA staking ratio is about 30%, with room for increase.
• The on-chain staking amount is rising at a 45° angle, optimistic about future development.

Market Theme Overview

PayFi track performed the best, while SocialFi track performed the worst.

Important Events Next Week

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

Summary

This week, the crypto market experienced fluctuations and a downturn, leading to low sentiment. Stablecoin funds are flowing back, and some hot projects have solid fundamentals. Projects like BTC, AAVE, and Berachain are expected to stand out. Investors should pay attention to on-chain data, macro policies, and upcoming unlocking events to seize opportunities and mitigate risks.