Original title: (Stablecoin project Ethena shows strong growth, and the Fed's hawkish stance triggers cautious market sentiment | Frontier Lab Cryptocurrency Market Weekly Report)
Original source: Frontier Lab
Market overview
Market overview
This week, the cryptocurrency market has shown a downward trend. BTC has experienced a decline this week, while ETH has relatively shown strength with a trend of oscillating upwards. Most altcoins have followed BTC with a downward trend. The market sentiment index has dropped sharply from 59% last week to 27.81%, entering a bearish zone overall.
Dynamics of the stablecoin market
The total market value of stablecoins continues to grow, but the growth rate has significantly weakened, showing a trend of USDT growth and USDC decrease:
· USDT: The market value has reached $163.8 billion, with a week-on-week growth of 0.74%, continuing to maintain a high-speed upward trend. Although the weekly increase in capital has decreased compared to last week, it still remains above $1 billion, indicating that the intensity of capital inflows this week has decreased.
· USDC: The market value is $64 billion, a week-on-week decrease of 1.68%, ending a three-week rising trend and beginning to show a declining trend, with a significant drop of $1.1 billion.
This phenomenon is worth noting for investors: USDT has consistently seen weekly increases of over $1 billion in the past five weeks, indicating that institutional capital primarily from non-U.S. users is still increasing its entry; conversely, USDC has seen a significant decline, reflecting that U.S. investors have ended their recent FOMO sentiment, and due to recent unfavorable macro data, they are taking hedging actions. This signal needs to be continuously monitored.
Analysis of market driving factors
· Strong economic data impact: On Wednesday, ADP employment numbers and GDP data exceeded expectations, showing that the U.S. economy remains strong, which is not favorable for the Fed's interest rate cut decision.
· Fed's hawkish stance: Powell's hawkish statements after the interest rate meeting have reduced market expectations for a rate cut in September to 50%, with expectations for an October rate cut being abandoned.
· Persistent inflation: The core PCE price index remained at 2.58% in June, higher than the expected 2.7%, showing no signs of decline, further impacting rate cut expectations.
· Earnings report fell short of expectations: Coinbase's Q2 earnings report released after the market closed on Thursday did not meet market expectations, leading to a downturn in Crypto.
· Institutional demand support: Continuous purchases of ETH by whales and listed companies have stabilized market prices and sentiment to some extent.
International Trade and Political Factors
· Easing trade relations: The U.S. and China have reached a decision to continue postponing tariffs for 90 days, and a tariff agreement has been reached with the EU, positively impacting market sentiment.
Key event predictions for next week
· Lack of macro data: No significant macro data will be released next week, and market focus will shift to institutional buying strength.
· Institutional buying strength: Continuous attention is needed on the purchasing situation of publicly listed companies and ETFs for BTC and ETH, as a decrease in purchasing strength could lead to market corrections.
Investment strategy recommendations
· Maintain a cautious stance: In the current market environment, investors should remain cautious.
· Preventing 'Black Swan' events: Be prepared to respond to potential risk events.
· Pay attention to institutional trends: Closely track the purchasing behavior of large institutions towards BTC and ETH as an important indicator of market direction.
Market outlook
Against the backdrop of the Fed's hawkish stance and stubborn inflation, the cryptocurrency market may continue to maintain a volatile stance in the short term. The Fed's cautious attitude towards the interest rate cut timeline will be a core factor influencing the market in the coming months, especially as the expectation of a September rate cut has dropped from certainty to a 50% probability, which has significantly suppressed market risk appetite. However, at the same time, Coinbase's earnings report delivered a fatal blow to the market. The subsequent flow of institutional capital will become a key support for market stability. Currently, the continuous purchasing behavior of ETH whales and listed companies provides some buffer for the market, but if this trend weakens, it may trigger a larger-scale correction. Particularly, with technical adjustments already emerging, a decrease in institutional buying may accelerate downward pressure.
The easing of international trade relations is one of the few positive factors currently; the postponement of U.S.-China trade tariffs and progress on U.S.-EU tariff agreements help improve the global economic outlook, indirectly supporting risk assets. However, whether this positive factor can offset the negative impact of the Fed's hawkish stance remains to be seen.
Overall, the market may enter a consolidation period, waiting for clearer monetary policy signals. Investors should prepare for medium to long-term holdings while maintaining sufficient liquidity to cope with potential volatility. In the absence of significant catalysts, the market may need a longer time to digest previous gains and build momentum for the next phase of the market.
Predicted events for next week
Bearish targets: ATA, MOVE
ATA: Privacy track marginalized projects face dual challenges of unlocking selling pressure and fundamentals.
· Project fundamentals and positioning
Automata Network is a decentralized platform focused on providing privacy protection and cross-chain integration in the blockchain and Web3 fields. Through its decentralized middleware protocol, it provides infrastructure for building Web3 applications, especially emphasizing privacy and security. It aims to address key issues of privacy, security, and interoperability in blockchain.
· The industry ecosystem and market position continue to weaken.
The market positioning of the privacy track is marginalized: The privacy track in which Automata Network is located is a niche field in the Crypto market, long marginalized and failing to gain mainstream market attention and capital injection.
· Insufficient ecosystem integration: Despite the application value of privacy technology in the Web3 field, Automata Network has failed to integrate effectively with mainstream public chains and DeFi ecosystems, limiting its application scenarios and user base.
· Fundamental data has severely deteriorated.
On-chain activity is close to stagnation: On-chain data shows that the daily number of on-chain proofs generated by the Automata Network project is only 20, a core indicator that directly reflects platform usage, indicating that there are almost no active users on-chain.
The number of on-chain proofs generated by the Automata Network project (data source: https://dune.com/automata_network/attestation-dashboard)
· Extreme shrinkage of capital inflow: On-chain ETH deposit data shows that Automata Network has daily deposits of less than 1 ETH, reflecting that investor confidence in the project has dropped to freezing point.
Daily deposit numbers for Automata Network (data source: https://dune.com/automata_network/attestation-dashboard)
· Low utilization rate of cross-chain applications: Among all supported chains, Automata Network's cross-chain integration function only has 68 transactions per day, indicating that the project's actual application value and user base have almost disappeared in the entire Crypto ecosystem.
Daily cross-chain data of Automata Network (data source: https://dune.com/automata_network/attestation-dashboard)
· Token unlocking risk assessment
- Unfavorable unlocking scale and timing: On August 6, 25.22 million ATA tokens will be unlocked, accounting for 2.52% of the total locked amount, at a key moment when the project's fundamentals continue to deteriorate.
- The market's capacity to absorb is severely insufficient: The average daily trading volume of ATA tokens is only about $700,000, and market liquidity is clearly insufficient to effectively digest the upcoming unlocking of tokens, which will create significant selling pressure.
Average daily trading volume of ATA tokens (data source: https://www.coingecko.com/en/coins/automata)
- Strong motivation for unlocking parties to sell: According to the linear unlocking plan, this unlocking mainly involves investment institutions and project teams. Given that the project is currently in a clear down cycle, these holders have a strong motivation to cash out and are highly likely to choose to sell and exit.
- Weak liquidity depth: Relatively small daily trading volume reflects insufficient market depth, unable to effectively buffer the price impact caused by token unlocking.
Summary
The Automata Network project faces multiple systemic risks: from the market perspective, the overall attractiveness of the privacy track is limited, and the project has failed to establish a leading position in this niche; from the business perspective, on-chain activity is almost stagnant, user activity is extremely low, and capital inflow is minimal; from the capital perspective, the unlocking of 25.22 million ATA tokens on August 6 will create significant selling pressure in a market with an average daily trading volume of only $700,000, and the unlocking subjects are investment institutions and teams with strong cash-out motivations. Multiple negative factors combine to exert sustained downward pressure on ATA token prices, making it difficult to reverse the downward trend in the short term.
MOVE: The Move language L2 project is caught in a dual crisis of fundamental collapse and unlocking selling pressure.
· Project fundamentals and positioning
Movement is an Ethereum Layer 2 based on the Move programming language, aiming to introduce the security and performance of the Move language into various blockchain ecosystems, including Ethereum. It enhances Ethereum's network by building a Layer 2 solution, improving transaction speed and efficiency while addressing issues like scalability, interoperability, and security vulnerabilities.
· The market environment is deteriorating.
- The value proposition of the L2 track is under scrutiny: Over the past year, the L2 track has been criticized by the market, believed not only to have failed to bring expected prosperity to Ethereum but to have led to fragmentation of the Ethereum ecosystem, with Movement, as a project in this track, also facing negative impacts.
- Overall lack of wealth effect in the track: L2 ecosystem projects have failed to generate significant wealth effects in the recent market cycle, leading to reduced investor interest, and Movement has not received sufficient market attention and capital injection.
- Unfavorable market competition landscape: In the crowded L2 track, Movement has failed to establish clear differentiated advantages, and under the pressure of leading L2 projects like Arbitrum and Optimism, market share continues to shrink, and the impetus for ecological development is insufficient.
· Fundamental data has severely deteriorated.
- Cliff-like drop in TVL: Movement's TVL has dramatically decreased from its historical high of $166 million to $81.5 million, a drop of 50.91%, clearly reflecting that users are withdrawing from the Movement ecosystem on a large scale.
TVL of Movement (data source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=false&tvl=true&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)
- The market value of stablecoins continues to shrink: The on-chain market value of stablecoins has decreased from $34.98 million to $30.80 million in the past month, a decline of 11.95%, indicating that funds are continuously flowing out of the Movement ecosystem, and market confidence is continuously weakening.
On-chain stablecoin market value of Movement (data source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)
On-chain activity is almost stagnant: On-chain fee data shows that daily transaction fees for Movement are only between $10-20, at an extremely low level, directly reflecting very little on-chain activity for Movement.
Daily fees income of Movement (data source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)
- DEX trading volume continues to decline: On-chain DEX trading volume shows a continuous downward trend, currently maintaining at only $4.66 million/day, indicating a continuous decline in on-chain trading activity.
DEX trading volume on the Movement chain (data source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)
- Extremely low revenue from ecosystem projects: The total daily revenue of all application projects on the Movement chain is only about $2,000 and continues to decline, indicating that the ecosystem is on the brink of recession.
Daily revenue of all application projects on the Movement chain (data source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)
- New users have completely stalled: On-chain data shows that there have been no new users entering Movement recently, indicating that market interest in the project has dropped to freezing point and user growth has completely stalled.
New users on the Movement chain (data source: https://dune.com/ethenelabs/movement-cornucopia)
· Token unlocking risk assessment
- Unfavorable unlocking scale and timing: On August 8, 50 million MOVE tokens will be unlocked, accounting for 1.5% of the total locked amount, at a key moment when the project's fundamentals continue to deteriorate.
- The market's capacity to absorb is severely insufficient: The average daily trading volume of MOVE tokens is only about $2.9 million, and market liquidity is clearly insufficient to effectively digest the upcoming unlocking of tokens, which will create significant selling pressure.
Daily trading volume of MOVE tokens (data source: https://www.coingecko.com/en/coins/movement)
· Strong motivation for unlocking parties to sell: According to the linear unlocking plan, this unlocking mainly involves investment institutions and project teams. Given that the project is currently in a clear down cycle, these holders have a strong motivation to cash out and are highly likely to choose to sell and exit.
· Weak liquidity depth: Relatively small daily trading volume reflects insufficient market depth, unable to effectively buffer the price impact caused by token unlocking.
Summary
The Movement project faces multiple systemic risks: from the market perspective, the entire L2 track is under scrutiny, failing to bring the expected value to Ethereum and lacking wealth effects; from the business perspective, TVL has plummeted by 50.91%, the market value of stablecoins has shrunk by 11.95%, on-chain fees are only $10-20/day, DEX trading volume continues to decline, ecological revenue is only $2,000/day, and new users have completely stalled; from the capital perspective, the upcoming unlocking of 50 million MOVE tokens on August 8 will create significant selling pressure in a market with an average daily trading volume of only $2.9 million, and the unlocking subjects are investment institutions and teams with strong cash-out motivations. Multiple negative factors combine to exert sustained downward pressure on MOVE token prices, making it difficult to reverse the downward trend in the short term.
Unlocking schedule for next week (amounts over $1 million)
Market sentiment index analysis
TOTAL3 data (data source: https://www.tradingview.com/chart/xUGZrDd8/?symbol=CRYPTOCAP%3ATOTAL3)
The market sentiment index has fallen from 87% to 59%. BTC has dropped 2.72% this week, ETH has increased 1.36% this week, TOTAL3 has dropped 2.21% this week, and Altcoins have overall entered a bearish zone.
This week's hot projects
Ethena ecosystem analysis: Expansion of USDe market share and robust growth in the stablecoin sector
Recently, with the passage of the U.S. (GENIUS Act), market discussions about stablecoin projects have heated up. Market attention has begun to shift toward stablecoin projects, while this week the overall market has been in a volatile range, with most altcoin projects showing a trend of oscillating downwards. However, Ethena has shown strong growth, performing significantly better than other altcoins, attracting widespread market attention.
Recent performance of ENA tokens (data source: https://www.coingecko.com/en/coins/ethena)
On-chain data analysis
TVL
TVL of Ethena (data source: https://defillama.com/protocol/ethena?tvl=true)
Due to the recent rapid rise in ETH prices, we calculated using ETH as the unit, showing that Ethena's TVL has experienced a rapid increase, rising from a recent low of 1.65 million ETH to 2.19 million ETH, an increase of 30.91%. In dollar terms, it has surpassed $8 billion, reaching a historical high, demonstrating the project's strong appeal.
Fees
Fees of Ethena (data source: https://defillama.com/protocol/ethena?tvl=false&fees=true&groupBy=weekly)
From the above chart, it can be seen that Ethena's Fees have been increasing week by week, especially in recent weeks, showing a significant increase to a recent high of $19.68 million, indicating that the user base of Ethena is continuously expanding, and the platform's activity is continuously improving.
On-chain capital flow
On-chain capital flow of Ethena (data source: https://defillama.com/protocol/ethena?tvl=false&usdInflows=true)
From the above chart, it can be seen that Ethena's on-chain capital has recently maintained a state of large-scale inflow, with an average daily inflow exceeding $300 million, indicating that market confidence in USDe continues to strengthen, and investors have a positive outlook on its prospects.
USDe Supply
USDe supply (data source: https://dune.com/hashed_official/ethena)
From the above chart, it can be seen that the supply of USDe has suddenly surged recently, reaching a scale of $7.839 billion, creating a historical high, with a month-on-month growth of 47.93%, reflecting a significant increase in market demand for USDe.
Comparison of major decentralized stablecoins
Comparison of major decentralized stablecoins (data source: https://dune.com/stablescarab/defi-savings-rate)
Comparison of major decentralized stablecoins (data source: https://dune.com/stablescarab/defi-savings-rate)
From the data in the above chart, it can be seen that the recent APY of sUSDe has decreased to 10.24%, but its APY still ranks among the top in returns of all major decentralized stablecoin projects, and its scale is the largest among all mainstream decentralized stablecoins, reaching $5.012 billion.
Proportion of sUSDe
Proportion of sUSDe (data source: https://dune.com/hildobby/ethena)
From the above chart, it can be seen that the proportion of sUSDe has exceeded USDe, reaching 53.4%. It can be observed that most users use USDe primarily for obtaining stablecoin yields, while the actual number of users conducting on-chain transactions with USDe is not the majority.
Transaction volume and number of purchasers of USDe
Transaction volume and number of purchasers of USDe (data source: https://dune.com/entropy_advisors/ethena-usde)
From the above chart, it can be seen that the transaction volume of USDe has significantly increased over the past month, reaching $1.79 billion, second only to November 2024, and the number of purchasing users has also noticeably risen to 16,016, indicating that new capital and users have entered continuously.
Volatility of USDe
Volatility of USDe (data source: https://dune.com/entropy_advisors/ethena-usde)
From the chart, it can be seen that the volatility of USDe has remained very stable recently, without any significant decoupling events, demonstrating excellent stability, which is one of the core competitive advantages of stablecoin projects.
Summary
Ethena and its stablecoin USDe have shown excellent performance and strong growth potential in the current cryptocurrency market. Against the backdrop of favorable policies in the U.S. (GENIUS Act), Ethena has successfully seized the opportunity of growing demand for stablecoins, achieving significant increases in TVL, transaction volume, and user numbers. With a TVL scale of $8 billion, a supply of $7.8 billion, and continued large-scale capital inflows, they form the foundation for Ethena's robust development. The proportion of sUSDe exceeding 53% reflects users' recognition of its profit model, while the leading APY of 10.24% continues to attract yield-oriented investors. At the same time, USDe's excellent price stability has earned it market trust, becoming its core competitive advantage.
As the importance of stablecoins in the crypto ecosystem continues to rise, Ethena is expected to continue expanding its market share and consolidating its leading position in the decentralized stablecoin field. However, the project also needs to be wary of potential risk factors such as changes in the regulatory environment and intensified market competition, continuously optimizing products and services to maintain long-term sustainable development.
Overall situation of market themes
Data source: SoSoValue
According to weekly return statistics, the SocialFi track performs the best, while the AI track performs the worst.
· SocialFi track: In the SocialFi track, TON and CHZ account for a large proportion, with a total share of 96.05%. This week, their price fluctuations were 11.83% and -7.96%, respectively. Due to TON's significant share in the SocialFi track, accounting for 91.93%, TON's rise has led to SocialFi's performance being better than other tracks, making SocialFi the best-performing track.
· AI track: In the AI track, TAO, RENDER, WLD, and FET占有较大比例，总共占比为 75.61%。本周它们的涨跌幅分别为 -15.16%、-9.36%、-12.78% 和 -7.63%。可以看出，占比较重的项目表现低于其他赛道的项目，使得 AI 赛道表现最差。
Next week's major crypto events forecast
· On Monday (August 4), Solana Mobile's second phone, Seeker, began shipping.
· On Tuesday (August 5), the 2025 Blockchain Science Conference.
· On Thursday (August 7), the number of initial jobless claims in the U.S. for the week ending August 2.
Summary
This week, the cryptocurrency market has shown a downward trend, with ETH oscillating while Bitcoin and most altcoins show a trend of oscillating downwards. The market sentiment index has dropped from 59% to 27.81%, entering a bearish zone. The growth rate of the stablecoin market has slowed, with USDT's market value reaching $163.8 billion, a weekly increase of 0.74%; USDC's market value is $64 billion, a weekly decrease of 1.68%, ending a three-week rising trend. The market is influenced by multiple factors: US employment and GDP data exceeded expectations, and Fed Chairman Powell's hawkish statements have reduced the expectation of a rate cut in September to 50%. The core PCE price index remains at 2.58% with no signs of decline, while Coinbase's earnings report fell short of expectations, leading to an overall market decline. On the positive side, the U.S. and China have reached a decision to delay tariffs for 90 days, and a tariff agreement has been reached with the EU; the continuous purchase by ETH whales and listed companies has stabilized market sentiment to some extent.
This week, the Ethena ecosystem has performed particularly well, successfully seizing the opportunity of growing demand for stablecoins. The supply of USDe has soared to $7.839 billion, reaching a historical high, with a month-on-month growth of 47.93%, far exceeding other stablecoin projects. In terms of TVL, Ethena has surpassed the scale of $8 billion, calculated in ETH from a recent low of 1.65 million ETH to 2.19 million ETH, an increase of 30.91%. On-chain capital flow shows that Ethena maintains an average daily inflow of over $300 million, reflecting the market's continued confidence in USDe. Notably, the proportion of sUSDe has reached 53.4%, exceeding USDe itself, indicating that most users utilize USDe primarily to obtain stablecoin yields, while the actual number of users conducting on-chain transactions with USDe is not the majority. The trading volume of USDe in recent months has reached $1.79 billion, and the number of purchasing users has risen to 16,016, while maintaining excellent price stability without significant decoupling events, solidifying its leading position in the decentralized stablecoin field.
In the short term, the cryptocurrency market may continue to undergo volatile adjustments, with the Fed's cautious attitude toward the interest rate cut timeline being a core influencing factor. The flow of institutional capital is a key support for market stability; currently, the continuous purchasing behavior of ETH whales and listed companies provides a buffer for the market, but if this trend weakens, it may trigger a larger-scale correction. The easing of international trade relations is a positive factor, but whether it can offset the negative impact of the Fed's hawkish stance remains to be seen. Investors should prepare for medium to long-term holdings while maintaining sufficient liquidity to cope with volatility. In the absence of significant catalysts, the market will need more time to digest previous gains and build momentum for the next phase of the market. Overall, investors should maintain a cautious stance, prevent 'Black Swan' events, and closely monitor institutional purchases of BTC and ETH as important indicators of market direction.
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