This week, the crypto market experienced violent fluctuations in the rhythm of 'ETH leading → style switch → data-induced plunge,' with the US July PPI exceeding expectations (cooling rate cut expectations) becoming a turning point for the market. However, from a capital perspective, the issuance of stablecoins reached a new high since May, and ETFs shifted from negative to positive, indicating clear institutional bottom-fishing actions, with market warmth not completely dissipated. The following analysis will focus on market trends, key capital signals, and future focal points:
(The following content is a quick reading version, the detailed version has been sent to the group)
1. Market main line: ETH stands strong to the end, PPI becomes a 'black swan'
This week's market is clearly divided into three segments, with the core contradiction shifting from 'ETH leading' to 'macroeconomic data shocks':
ETH leads, BTC struggles to follow (8.8-8.10)
ETH performs brilliantly, continuing to rise after breaking through previous highs, emerging as the market's core engine; in contrast, BTC, after recovering previous losses, is stuck in a range around $115,000-$118,000, with funds favoring the more elastic ETH and altcoins, causing BTC's market cap share to drop from 62% to 59.48%.
Logical support: ETH ETF saw a weekly inflow of $2.8 billion, setting a historical high, driven by institutional allocation needs that pushed valuation recovery; at the same time, TVL on the ETH ecosystem chain grew by 7.1%, with the DeFi sector's activity also improving, creating a resonance between fundamentals and capital.
Style switch, initial signs of correction (8.11)
The market shows subtle changes: BTC begins to catch up, while ETH stagnates, indicating an intensification of short-term capital divergence. Although ETH did not directly decline, the 'leading momentum weakening' has laid the groundwork for subsequent corrections, with some sensitive funds starting to withdraw from high-position altcoins.
PPI hits hard, collective plunge (8.12-8.14)
On August 14, the US July PPI year-on-year exceeded expectations, significantly cooling market expectations for Fed rate cuts, putting collective pressure on risk assets. The crypto market was hit hardest: ETH fell over 10% from its highs, nearing $4,400; BTC dipped around $114,000, with altcoins appearing even weaker, as previously popular OG and small-cap tokens faced declines exceeding 20%, highlighting 'following up with drops' characteristics.
2. Capital side: Strong support signals unchanged, institutional bottom-fishing actions are clear
Despite the market correction, the positive signals from the capital side are this week's core highlights, which are also key in determining whether the decline can be halted:
Stablecoins: $3.958 billion in issuance creates a new high since May, with off-exchange capital waiting in the wings.
This week, the total scale of stablecoins reached $232.804 billion, with a weekly issuance of $3.958 billion, an increase of 270% compared to the previous week, far exceeding last week's $1.069 billion and setting a new weekly high since May. This data corroborates the mainstream coin breakthrough at the beginning of the week, indicating sufficient off-exchange capital reserves.
Actions during corrections are more critical: After the crash on August 14, the USDT/USDC off-exchange premium rate shows signs of a turnaround, indicating that some off-exchange funds are beginning to enter the market to buy the dip, without panicking and exiting due to short-term volatility.
ETF: From net outflow to net inflow of $965 million, institutional 'buy low' strategy is clear
Bitcoin ETF achieved a 'reversal' this week: changing from a net outflow of $969 million last week to a net inflow of $965.82 million, with a week-on-week increase exceeding $1.9 billion. The capital inflow shows a clear 'buy low' characteristic—pushing BTC to break resistance at the beginning of the week, and after a significant bottom-fishing following the price drop at the weekend (8.14), being cautious during high points in the middle of the week.
ETH ETF is even more impressive: single-week inflow of $2.8 billion creates a historical high, with asset management companies simultaneously increasing their holdings by nearly $2 billion, making the ETH ecosystem the 'core track' for institutional allocation, which is also the core reason why ETH was able to emerge with an independent market trend.
Chip and holding structure: Support level clear, selling pressure nearing its end
BTC: 1.6651 million chips accumulated in the range of $114,000-$119,000, forming a dense support area. This week's correction has tested the lower edge of this range. If it can hold, short-term downside potential is limited; addresses holding more than 100-1,000 BTC continue to accumulate, while 1,000-10,000 BTC addresses show diminished selling pressure, indicating that long-term holders' sentiment is stabilizing.
ETH: Large addresses holding 10,000-100,000 ETH have caused selling pressure leading to corrections, but the holding ratio has rebounded after 8.14; addresses holding 1,000-10,000 ETH briefly maintained, showing that medium-sized funds still have confidence in ETH's long-term logic, with $4,400-$4,500 being a key support level after the previous breakout.
3. Shanzhai market: ETH drives warmth, corrections expose weaknesses
This week, altcoins followed ETH's warming sentiment, but the characteristics of 'following up with drops' became prominent during the correction, presenting an overall situation of 'easy to make quick money, difficult to hold profits':
Market cap and heat: rise then fall, not reaching frenzy
TOTAL2 (market cap excluding BTC and ETH) rose by 3.5% to $1.06 trillion, with on-chain TVL growing by 7.1% to $154.9 billion, showing significant improvement in activity; however, the Shanzhai Index only rose from 39 to 44, and the sentiment index remained at 59, showing no signs of bull market 'FOMO,' and the market is still in a handling range.
Profit-making effect is concentrated: ETH ecosystem DeFi sector, OG (up 5 times in the past half month), and last week's popular MYX and other targets performed prominently. However, during Thursday's correction, most altcoins saw retracements exceeding 15%, revealing risks in chasing high positions.
Capital flow: ETH/Base/Arb becomes the focus
In terms of sectors, the staking sector continues its upward trend (resonating strongly with ETH); on-chain asset flows show that Base and Arb chains have the highest net inflows, becoming the new favorites for capital, with both ecosystems' projects being more elastic in the short term.
From the institutional side, the ETH ecosystem has received key allocations, with capital flowing from BTC towards ETH and emerging public chains, causing BTC's market share to drop to 59.48%. If this trend continues, altcoins still have rotation opportunities.
Shanzhai Indicator
Shanzhai Index: This Friday's Shanzhai Index is 44, which shows a slight recovery compared to last week, while the year-on-year growth rate of the Shanzhai market cap has decreased, indicating that market sentiment has not significantly improved.
Market Sentiment: Friday's sentiment index is 59, remaining stable compared to last week and maintaining a relatively high range, with volatility not rising quickly.
Top-Taking Indicator: There were no hits in the top-taking collection this week, with multiple indicators showing varying degrees of risk decline, and Bitcoin's market cap share dropped from 92% last week to 90%.
Shanzhai Heat: This week's Shanzhai heat shows a clear improvement in the capital rates of specific individual targets, as indicated by the colors in the chart, but with Thursday's fluctuations, Shanzhai enthusiasm has significantly waned.
4. Outlook for next week: Two core variables set the direction
Although the correction this week was severe, the positive signals from the capital side (stablecoins/ETF) and the ecological side (ETH/Base/Arb activity) remain intact. Next week's market needs to focus on two core aspects:
Continuity of funds: The 'lifeline' for halting declines
Key observation: Can stablecoin issuance maintain above $2 billion weekly (verifying off-exchange capital enthusiasm), and will BTC/ETH ETFs continue to see net inflows (confirming institutional attitudes)? If capital inflows slow down, BTC may test $110,000, and ETH may test $4,000 support.
Support level testing: The 'watershed' for the market
BTC must hold the concentrated area around $114,000-$119,000, which is the core cost zone for bottom-fishing funds this week; ETH needs to stabilize between $4,400-$4,500, as this position is the 'pullback confirmation level' after the previous breakout. Falling below this level may lead to fluctuations under $4,000.
Shanzhai operation suggestions
Short-term focus on 'buying low and selling high,' prioritizing projects with solid fundamentals within the ETH, Base/Arb ecosystems, and avoiding high-position speculation without performance support.
Operation suggestions:
Short-term (1-3 days): Focus on 'buying low', BTC near $114,000-$115,000 and ETH near $4,400 can be trialed with light positions, setting stop losses 5% below support levels;
Mid-term (1-2 weeks): Prioritize laying out ETH ecosystem (DeFi leaders), and projects with solid fundamentals on Base/Arb chains (such as those with rapid TVL growth and active users), avoiding high-position 'meme coins' without performance support;
Risk warning: If PPI subsequently triggers hawkish statements from the Fed, be alert to further suppression of risk appetite from the macro front.
In summary, this week's correction is a short-term fluctuation under the 'macroeconomic data shock,' rather than a trend reversal. As long as fund continuity and key support levels are maintained, the market still has the potential to return to the rhythm of 'ETH leading, Shanzhai rotating.' Long-term focus can be on the deepening of the ETH ecosystem, developments of emerging public chains like Base/Arb, and institutional allocation directions, anchoring on 'strong logic, high consensus' targets during fluctuations.
#US July PPI year-on-year higher than expected #Crypto market correction #Mainstream coins rotate upward
Written by: WolfDAO (X: @10xWolfDAO)
Data source: Edited and compiled by WolfDAO, inquiries can be directed to updates
