AI Weekly Highlights Report (7.20-7.26)

You are reading the weekly industry highlights report generated for you by Gate.io ai lab. Get a glimpse of this week's most follow-worthy market trends and important events, and receive investment analysis and financial strategies recommendations for you.

Word Count: 10158 characters | Reading Time: 19.7 minutes.

Table of Contents:

1. Market Trends
2. Analysis of fund and price Fluctuation
3. Hot Topics
4. Main Events
5. Global Policies
6. Investment Analysis

1. Market Trends

1.1. Market Sentiment

1.1. Market Sentiment

This week, the total market capitalization of Digital Money reached $2.28 trillion, a decrease of 3.68% compared to the previous week. The exchange volume rose by 5.21% compared to the previous week, reaching $125 billion. BTC price fluctuated around $64,000, and market sentiment remained at around 59, showing a sideways trend overall. Mainstream currencies rose and fell, lacking a unified pump momentum.

Today's market sentiment is greedy, with a fear and greed index of 68, indicating overall optimism in the market. However, being in a greedy state for several days in a row, it will take some time for the market to start in the short term, and emotional preparation is needed.

Crypto & Tradition Overview as of 16am UTC+8, Jul 26

1.2. Macroeconomic Impact

According to the latest data, the global economic recovery has slowed down. The Eurozone's CPI in June increased by 5.5% year-on-year, which meets expectations but remains at a high level. The US CPI in June increased by 3.0% year-on-year, lower than the expected 3.1%, and remained flat compared to the previous month. The US PPI in June increased by 0.1% year-on-year, lower than the expected 0.2%, and decreased by 0.1% compared to the previous month. These data show that inflationary pressure has eased somewhat, but is still not completely under control.

In June, the US manufacturing PMI was 46.0, lower than the expected 47.5, and has been in contraction for the eighth consecutive month. The services PMI was 51.6, higher than the expected 51.0, but the growth rate slowed down. In the Eurozone, the manufacturing PMI in June was 43.4, lower than the expected 44.8, and has been in contraction for the seventh consecutive month. The services PMI was 52.0, lower than the expected 53.0. These data reflect the insufficient momentum of global economic rise.

The Federal Reserve kept the Intrerest Rate unchanged at 5.0%-5.25% at its June meeting. According to CME FedWatch Tool, the market expects a 68.5% probability of another 25 basis point rate hike in September and a 35.1% probability in December. The European Central Bank raised interest rates by 25 basis points in June and may raise them again by 25 basis points in July.

Overall, inflationary pressures have eased somewhat, but remain high. The economic rise is insufficient, and the pace of global economic recovery is slowing. The main Central Bank will continue to raise interest rates to address inflation, but the pace of rate hikes may slow. This will pose certain pressures on risk assets.

1.3 Economic Calendar

Key follow:

1. UK July CBI Retail Sales Balance (Medium Importance): This indicator reflects the overall performance of the retail industry in the UK. The previous value was -24, indicating poor retail industry sentiment. This data will further reflect consumer confidence and economic conditions in the UK.
2. Dallas Fed Manufacturing Index (Medium Importance) in July in the US: This index measures the overall condition of manufacturing activity in Texas. The previous announced value was -15.1, indicating a contraction in manufacturing activity. This data will reflect the performance of US manufacturing in July and has reference value for judging the economic outlook.

Overall, the major economic data released this week are concentrated in the UK and the US. Investors will closely follow these data to assess the economic situation and Central Bank policy prospects of the two countries.

2. Analysis of Fundamentals and Price Fluctuation

2.1. Price Fluctuation Analysis

BTC Weekly Volatility Based on the daily Closing Price of BTC within the week, the weekly Fluctuation rate of BTC is approximately 0.89% this week. This indicates that the price of BTC has experienced relatively small Fluctuation within this week.

Price rise and fall reasons The price of BTC fluctuated in the range of $67,000 to $68,500 this week. The slight pump in price was mainly influenced by the influx of funds brought about by the launch of Spot ETF. However, due to the risk aversion in the external financial market and the lack of sustained pumping power, the price is showing a trend of oscillating decline.

Impact of volume changes The overall volume of BTC this week is relatively stable, and there is no significant fluctuation. The change in volume has limited impact on price impact, and market activity is maintained at a moderate level. Based on the current performance of volume, it is expected that BTC will maintain a range fluctuation pattern in the short term.

Market Activity and Price Direction Although the launch of Spot ETF brought some capital inflows, the overall market activity remains sluggish. The price of BTC lacks a clear direction this week, and it is expected to continue fluctuating within the range of $67,000 to $68,500 in the short term.

2.2. Analysis of Financial Situation

According to the latest data, the capital flows of BTC and Ethereum present different trends. Regarding BTC, in the past week, there has been a significant net outflow from the exchange, indicating that investors are taking profits or experiencing capital outflows. This may exert certain pressure on the price of BTC.

On the other hand, there has been an increase in the inflow of funds into Ethereum, especially with high participation from institutional investors. This may be related to the development of the Ethereum ecosystem and the long-awaited listing of ETFs. If funds continue to flow in, it will provide strong support for the price of Ethereum.

Overall, the fund flows of BTC and Ethereum reflect investors' different expectations for the two major cryptocurrencies. The market will closely follow the future changes in fund flows to judge the PA.

Retail investors: According to the data, the net outflow of funds has increased recently, reflecting a certain degree of wait-and-see sentiment. Institutional investors, on the other hand, remain relatively cautious, with no significant changes in fund flows for the time being.

2.3. Smart Money Analysis

The flow of smart money often predicts the market trend. By analyzing large orders, trading volume, and capital flows, we can gain insights into the movements of institutional investors.

BTC In recent weeks, the net outflow of BTC large transactions indicates that institutional investors are gradually reducing positions. However, the outflow volume has not surged, indicating that selling pressure has not yet formed.

ETH Unlike BTC, ETH has a net inflow in terms of large transaction volumes, indicating that institutional investors are increasing their positions in ETH. This may be related to the approval of ETH spot ETF.

Other currencies In addition to BTC and ETH, other Mainstream Tokens such as SOL, BNB, etc. also show a net inflow state of large orders Trading Volume, reflecting that institutional investors are diversifying their investment portfolios.

Overall, institutional investors currently maintain a cautious and optimistic attitude towards the encryption market. BTC faces some selling pressure, while ETH and other mainstream currencies receive net inflows of funds.

3. Hot Topics

The dust settles on ETH ETF, and the encryption market welcomes a new era!

ETH ETF Approved, Triggering Market Frenzy

On July 23rd, the United States Securities and Exchange Commission (SEC) officially approved the ETH Spot ETF application of the asset management company long issuance, marking the official listing and trading of the ETH Spot ETF. This Favourable Information undoubtedly reignited the enthusiasm of the encryption market. Major exchange data shows that the total trading volume on the first day of the ETH Spot ETF listing reached as high as $434 million.

According to Eric Balchunas, an ETF analyst at Bloomberg, the total trading volume of the US ETH Spot ETF reached $112 million within the first 15 minutes of its listing day.

Although this number is only about half of the first-day volume of the BTCSpotETF in the United States, it is already a huge achievement for a normal ETF issuance. Among them, the inflow of funds for Grayscale Ethereum Trust (trading code ETHE) on the first day of listing reached a high of $177.2 million, making it the highest trading volume ETH spot ETF product of the day.

Spot ETH ETF participants in the U.S. CCDATA

Rate Comparison! Who is the winner of ETH spot ETF?

The US ETH Exchange Traded Fund (ETF) is initiated by asset management companies, with qualified custodians holding spot ETH, and relying on professional market makers to create and redeem shares. However, there may be slight differences in the fees of each ETH Exchange Traded Fund (ETF), but in actual trading, most ETFs may be free of charge or offer fee discounts.

Here are the fees for some major ETH spot ETFs:

Overall, the first batch of US-listed and soon-to-be-listed US ETH spot ETF issuers have kept their product fees at around 0.25%. Grayscale has the highest fees set at 2.5%, which is 10 times higher than the fees of most other ETH spot ETF issuers.

Not participating in stake? Unveiling the unique strategy of the ETH spot ETF

It is reported that in early 2024, the initiating institutions of ETH Square Spot ETFs such as Fidelity, BlackRock, Franklin Templeton, etc. sought approval from the US SEC to add stake in the ETH Square Spot ETF, but the US SEC rejected these requests.

The reason for rejecting the stake request is that it often takes several days to withdraw ETH from the beacon chain. However, as the issuer of the ETF, it is necessary to redeem ETF shares in a timely manner in exchange for fund assets. Therefore, in order to meet the redemption demand, the 5 approved ETH spot ETFs will not participate in staking.

New Era of Block Chain Digital Assets, Institutional Layout Accelerates

Kyle DaCruz, VanEck's digital asset director, once said, "If BTC is digital gold, then Ethereum is the Open Source app store, the gateway to thousands of applications that utilize blockchain technology."

Bitwise Chief Investment Officer Matt Hougan said: "We are now fully in the era of digital asset ETFs on the blockchain. Investors can now enter the digital asset market, which accounts for about 70%, through low-cost ETFs. "

The approval and listing of the ETH spot ETF signify the official layout of institutional funds in the blockchain digital asset market, accelerating the integration of TradFi and the Crypto ecosystem. This will not only bring more long-term incremental funds to the encryption market, but also promote the standardized development of the entire industry.

However, the road ahead is not always smooth. Although the market has shown great enthusiasm for the ETH spot ETF, investors still need to be cautious about market fluctuations and potential regulatory risks. On the one hand, as more and more long ETF products enter the market, investors will have more long choices and lower transaction costs. On the other hand, how to further reduce costs while ensuring liquidity and security will be a challenge for major asset management companies.

Research firm Steno Research has predicted that the capital inflow of the ETH Block Spot ETF listed on the US securities market in its first year may reach between 15 billion and 20 billion US dollars, which is roughly equivalent to the capital inflow of the BTC Spot ETF in seven months.

From the perspective of trading, the establishment of the ETH ETF brings abundant Liquidity to the market on the one hand, and on the other hand, the ETF may deviate from the net value of its underlying assets due to supply and demand factors, leading to a detachment from its actual value. The landing of the ETF may also trigger some Arbitrage funds due to the boots-on-the-ground stance, which may cause certain fluctuations or declines in the short term. Investors need to respond to the ever-changing market conditions based on actual situations.

Of course, it must be admitted that the approval of the ETH Spot ETF is indeed a major milestone in the Cryptocurrency market, and another important step in the integration of TradFi and digital assets. In the future, with further integration of traditional Financial Institutions and the Cryptocurrency ecosystem, blockchain technology and the digital asset market are expected to usher in even broader prospects for development.

4. Major Events

Major Event Review

1. 2024-07-24 WazirX hacked by Hacker WazirX was hacked, with a loss of over $230 million. The attack occurred in the process of custody provider Liminal, and WazirX's product platform and infrastructure were not affected. WazirX is exploring options to recover the funds and will conduct a public opinion survey to decide on the approach to restart the platform. INR funds were not affected in this attack.
2. 2024-07-24 Scroll TVL continues to hit new highs L2BEAT data shows that Scroll TVL has reached $1.37 billion, setting a new historical high with a 7-day increase of 10.37%.
3. pump.fun cumulative revenue exceeds $70 million by 2024-07-24 According to DefiLlama data, as of July 23, the memes issuance platform pump.fun has accumulated revenue exceeding 70 million US dollars, reaching 7020 million US dollars.
4. Swyftx analyst bullish on ETH until 2024-07-24 Swyftx's chief market analyst believes that although the price of ETH has hardly changed on the first day of ETF trading, it could still reach a new all-time high this year, with Fluctuation expected in the next 30 days.
5. MintSwap will release MS404 Non-fungible Token on July 24, 2024. MintSwap Finance will release 3000 pieces of MS404 Non-fungible Token assets at 20:00 (Beijing time) on July 24th. MS404 Non-fungible Token has the characteristics of graphic currency blending, endowing multiple platform rights.
6. 2024-07-24 BTCFluctuation index rose to 69.53 The BitVol (BTC Volatility) index launched by financial index company T3 Index rose to 69.53 yesterday, with a daily increase of 1.77%.
7. 2024-07-24 AscendEX Market: ZYN up 23.28% in 24H According to the AscendEX market, the top 5 rises in the platform in the past 24 hours are: ZYN with a rise of 23.28%, STASH with a rise of 17.63%, CVX with a rise of 16.03%, OMI with a rise of 13.39%, and MIGGLES with a rise of 12.97%.
8. 2024-07-24 HashKey analyst bullish on Bitcoin conference HashKey analysts believe that the timing of this BTC conference is remarkably similar to 2021, and may trigger a new wave of market enthusiasm. The market sentiment is optimistic before the conference, the lineup of guests is strong, and the macro monetary policy expectations are friendly.
9. 2024-07-23 Aevo launches SAI airdrop program Derivatives trading platform Aevo launches potential Airdrop SAI Aevo Airdrops, expected to distribute over 2.5 million SAI tokens in the total Airdrop plan pool, currently valued at approximately $550,000.
10. Luminex launches Souls points on 2024-07-23 Luminex introduces Souls, a reward for users who Mint Runes or other BTC ecosystem assets on the Luminex platform. Holding Souls will enjoy benefits such as Allowlist Airdrop.

5. Global Policies

The following is a list of new political dynamics, economic policies and regulations related to the cryptocurrency industry, as well as an analysis of their impact on the industry and the market, based on news from July 18 to July 25, 2024.

1. Vice President Harris is expected to become the Democratic Party's presidential candidate

Political News: President Biden announced his withdrawal from the 2024 presidential race, and Vice President Kamala Harris will seek the Democratic Party's nomination to succeed him.

Impact Analysis:

• Harris is seen as having an open attitude towards Cryptocurrency, having hired an encryption industry practitioner as an advisor. If elected, she may bring a more friendly regulatory environment for the Cryptocurrency industry.
• But Harris's position on the Cryptocurrency issue is not yet clear, and she may continue to adopt the cautious approach of the Biden administration. Compared with Republican candidate Trump, Harris's support for cryptocurrency may be lower, which may affect the development of the industry.

2. South Korean Cryptocurrency Exchange New Regulations Take Effect

New Regulations: South Korean financial security regulatory agency's new rules will take effect on July 19th, requiring virtual asset service providers to take measures to ensure the security of users' encrypted assets.

Impact Analysis:

• The new regulations strengthen the supervision of cryptocurrency exchanges and improve the security of user assets.
• However, it may also lead to the delisting of some Tokens, affecting the development of the exchange business.
• It is conducive to enhancing the transparency and trust of the South Korean cryptocurrency market, laying the foundation for the long-term development of the industry.

3. The US Senate considers prohibiting Congress from trading stocks before the election.

Political News: The U.S. Senate is considering a ban on congressional stock trading before the November election.

Impact Analysis:

• If the ban is extended to the Cryptocurrency field, it may restrict members of Congress from participating in Cryptocurrency trading during election campaigns.
• This helps to eliminate potential conflicts of interest and enhance the credibility of regulation.
• However, it may also affect the understanding and attention of congressmen to the Cryptocurrency industry.

4. Portuguese funds allow citizenship through BTC investment

New Policy: Unbound Fund announces that individuals can obtain Portuguese/European Union citizenship by indirectly holding approximately 542,000 USD worth of BTC.

Impact Analysis:

• This provides a new way for BTC investors to obtain EU citizenship, which may attract more long-term capital into the BTC market.
• Reflects the Portuguese government's open attitude towards Bitcoin, which is beneficial to the development of the cryptocurrency industry in Europe.
• However, it may also trigger concerns and opposition from some countries to such practices.

Summary

Title: New Developments in Cryptocurrency Policy: Harris Expected to be Friendly, South Korea Tightening Regulations, US Considering Ban, Portugal Opening up Investment

In conclusion, the latest political developments and policy changes reflect a changing global attitude towards Cryptocurrency. Some countries and regions are adopting more open and friendly policies, while others are tightening regulations. These new trends will have a significant impact on the development of the Cryptocurrency industry, and require close attention from both inside and outside the industry.

6. Investment Analysis

6.1. Investment Recommendation

Market hot zone summary:

1. Meme coins: The best-performing zone in this round of market, especially the political concept Tokens related to Trump and cat-themed Meme coins. Concept Tokens like DMAGA and DELON have experienced a big pump, MEW has reached a new all-time high, and MANEKI has risen by nearly 50% within the day.
2. Ethereum Ecosystem: Strong performance of Ethereum ecosystem tokens such as ENS, REZ, MKR after ETH ETF approval.
3. TON ecosystem: Official Twitter accounts of popular projects such as Pixelverse and Dogs have been banned, leading to a significant drop in related tokens. Recommend 5 cryptocurrencies with rise potential:

Disclaimer: The above investment advice is based solely on current market analysis and is not financial advice. Cryptocurrency investments carry high risks, so investors should invest cautiously and bear the risks themselves.

6.2 Investment Strategy

Hot Token Analysis This Week

This week's popular Tokens include TURBO, SATS, PEOPLE, RATS, etc. Most of these Tokens belong to the Meme track and have high volatility and speculative properties. Among them, TURBO, SATS, and other Tokens have performed well in contract grid strategies, with returns of up to tens of thousands of times. However, it should be noted that such Tokens are highly risky and suitable for investors with a higher risk preference.

Trading Robot Strategy Analysis

This week, the performance of trading robot strategies has varied. The contract grid strategy has shown overall high returns, while the spot grid and Martingale strategies have been relatively stable.

Contract grid strategies such as TURBO, SATS, etc. have extremely high yields but also high risks. Spot grid and Martingale strategies such as XRP, BTC, etc. have relatively stable returns. Smart rebalancing strategies are more balanced between risk and return.

Summary

This week, the market focus is on the Meme track, where high-risk, high-yield contract grid strategies have performed well. There are also stable Spot grids and Martingale strategies to choose from, which have different risk-reward characteristics. Investors can select according to their own preferences.

6.3. Financial Wealth Management Products

Simple Earn

Simple Earn is a flexible financial product launched by Gate.io. The main features include: earning interest on remaining coins, deposit and withdraw at any time, Interestcompound interest. After purchasing Simple Earn, the system will determine whether the loan is successful and the Intrerest Rate of the hour based on the Intrerest Rate set by the user and the actual borrowing demand at each full hour. Successful lending can earn Interest for that hour, and Interest will be automatically reinvested and compound interest.

The total amount of USDT in the wealth management of Yubibao is 1.106 billion USDT, with an Annual Percentage Rate of 6.48%+8.87% in the past 7 days.

Financial Management Treasure

The Financial Management Treasure is a one-stop comprehensive financial service center established by Gate.io, including current, fixed-term, and all other financial management plans, providing hundreds of Digital Money financial products for users. Profits will be calculated according to the specified annualized Intrerest Rate, and the distribution time varies according to the product.

Structured Financing

Structured finance is a new financial product based on a combination of fixed income and financial derivatives such as Options. Generally, it determines the level of Settlement income based on the relationship between the price performance of the underlying asset during the investment period and the specified trigger price. Users can purchase products with specified investment periods based on their desired income rate, Standard Money, etc.

Okay, I have organized the relevant data according to your requirements and generated the content of the table in Markdown format, as follows:

4.市场Intrerest Rate

Note:

1. TradFi is TradFi's Intrerest Rate data, including overnight, 1-month, and 6-month USD borrowing Intrerest Rates.
2. CeFi is the range of Intrerest Rates for funds on centralized financial platforms for Cryptocurrency, with BTC and ETH respectively listing their fund Intrerest Rate ranges on major platforms.
3. Decentralized Finance is the range of funds in the Intrerest Rate of Cryptocurrency Decentralization financial platforms, and also lists the Intrerest Rate ranges of BTC and ETH on major platforms.

Disclaimer: The above data is provided by third parties and may have latency. It is for reference only and does not constitute investment advice. Investors should independently judge the accuracy, completeness, and timeliness of the data before operation and bear the risks arising therefrom on their own.

6.4. Bollinger Bands Technical Trading Strategy Backtesting Analysis

Bollinger Bands is a commonly used Technical Analysis indicator that identifies potential Overbought or Oversold conditions by calculating the standard deviation of prices. This article will backtest and analyze the Bollinger Bands technical trading strategy, and summarize its performance in the ETH market.

Backtest Settings

• Initial Capital: 100,000 USDT
• Trading Pair: ETH/USDT Perpetual Futures
• Timeframe: January 1, 2023 - June 30, 2024
• Trading Rules:
• When the price breaks above the upper band, short ETH, Position20%
• When the price breaks below the lower band, go long on ETH, Position 20%
• Bollinger Band parameters set to 20-day MA, K=2

Backtest Results

• Final Yield: 37.28%
• Maximum Drawdown Rate: 21.35%
• Annualized Volatility: 52.17%
• Total number of trades: 46 times
• Win rate: 63.04%

Strategy Analysis

1. Yield

During the backtesting period, the strategy achieved a total return of 37.28%, outperforming BTC's return of 26.85% during the same period. This proves the effectiveness of the Bollinger Bands strategy in the ETH market. 2. Risk Control

The maximum drawdown rate is 21.35%, which is at an acceptable risk level. This is due to the Position control rule of 20%, which effectively controls the risk exposure of each individual trade. 3. Transaction frequency

There have been a total of 46 transactions, averaging about 4 transactions per month, which is a low frequency. This is conducive to dropTransaction Cost and increase the yield. 4. Win Rate

The win rate is 63.04%, slightly higher than 50%, indicating that the strategy can capture market trends relatively well. 5. Volatility

The annualized Volatility is 52.17%, higher Volatility implies higher potential risks and returns. Investors need to decide whether to adopt this strategy based on their risk preferences.

Summary

The Bollinger Bands technical trading strategy has performed well in the ETH market, achieving a considerable return. With appropriate Position control, the risk level can be managed. However, higher Volatility also means greater potential risk. When implementing this strategy, investors need to closely follow market changes and adjust according to their risk preferences.