Market Overview

Major Market Trends

• Overall Market Situation

The current market is in a state of extreme panic, with the sentiment index dropping from 53% to 7%. Coupled with the Federal Reserve's hawkish statements (interest rate cut expectations reduced from 4 times to 2), approximately $1 billion in forced liquidations have occurred, indicating that the market is undergoing a significant deleveraging process.

• DeFi Ecosystem Development

The DeFi sector has experienced its first negative growth in TVL in nearly two months (-2.21%), but the market capitalization of stablecoins continues to grow (USDT +0.55%, USDC +1.44%), indicating that despite the market correction, fundamental liquidity is still flowing in, with stable yield projects like gun pools being favored.

• AI Agent

The market size of the AI Agent sector has reached $9.9 billion, with investment focus shifting from speculative AI Meme coins to infrastructure development. This transition shows that the market is gradually maturing, with project directions becoming more rational and practical.

• Meme Coin Trends

The Meme coin market has noticeably cooled down, with funds beginning to withdraw on a large scale, indicating a decrease in market speculation sentiment. Investors are more inclined to seek projects with substantial application value, which may signal a phase of the Meme coin craze coming to an end.

• Public Chain Performance Analysis

Amid significant market fluctuations, the public chain sector has shown strong resilience, becoming the preferred choice for risk-averse investors, reflecting that market confidence in infrastructure remains solid.

• Future Market Outlook

As the Christmas holiday approaches, market liquidity is expected to decline. It is recommended that investors adopt a defensive allocation strategy, focusing on BTC and ETH, while also paying attention to DeFi stable yield and AI infrastructure projects, but remain cautious of the potential for increased volatility during the holiday period.

Market Sentiment Index Analysis

• The market sentiment index has fallen from 53% last week to 7%, indicating an extreme panic zone.

• Altcoins have underperformed against the benchmark index this week, showing a significant downward trend. Due to leveraged positions, the market has seen approximately $1 billion in forced liquidations, with long positions significantly deleveraging. Given the current market structure, it is expected that Altcoins will remain in sync with the benchmark index in the short term, with a low probability of independent market movements.

• Altcoins often experience upward reversals when in an extreme panic zone.

Overall Market Trend Overview

• The cryptocurrency market is in a downward trend this week, with the sentiment index in extreme panic.

• DeFi-related crypto projects have performed well, showing that the market continues to focus on enhancing fundamental yields.

• AI Agent sector projects have garnered high public attention this week, indicating that investors are actively seeking the next market breakout point.

• Meme sector projects have generally declined this week, with funds beginning to withdraw from Meme coin projects, reflecting a gradual waning of market enthusiasm for Meme coins.

Hot Sectors

AI Agent

This week, the overall market is in a downward trend, with all sectors experiencing declines. Although most tokens in the AI Agent sector have also seen price drops this week, the level of discussion in the market is the highest. Previously, the market's focus on AI Agent was largely centered around Meme token projects featuring AI Agents, but it is now gradually shifting towards AI Agent infrastructure development.

Due to the lack of market interest in traditional VC coin projects during this cycle, and the inability of Meme coin projects to provide sustained growth, the AI Agent sector is currently very likely to lead the next phase of market development. The AI Agent sector includes not only AI Meme but also various other sectors such as AI DePIN, AI Platform, AI Rollup, and AI infra, all of which can be integrated with AI Agents. Essentially, all blockchain projects are manifestations of smart contracts, and the emergence of AI Agents aims to enhance and improve smart contracts. Therefore, AI Agents and Crypto represent the best combination.

Top five AI Agent projects by market capitalization:

DeFi Sector

TVL Growth Ranking

The top 5 projects by TVL growth over the past week (excluding projects with low TVL, defined as above $30 million), data source: Defilama

VaultCraft (VCX): (Recommended Rating: ⭐️⭐️)

• Project Introduction: VaultCraft is a crypto project based on the Algorand public chain, aimed at reducing participants' costs in storing and launching networks. VaultCraft's design utilizes Algorand's Proof-of-Stake consensus protocol.

• Latest Developments: This week, VaultCraft launched a stETH 4X leverage Looper based on Lido Finance, supporting multi-chain deployment on Base, Arbitrum, Optimism, and Ethereum. It enables direct staking from L2 to the mainnet through Chainlink CCIP, providing users with an APY yield of over 7% and establishing a partnership with Matrixport to secure 1,000 BTC custody services, rapidly increasing its TVL. It has also formed strategic partnerships with Safe and CoWSwap.

Hyperliquid (HYPE): (Recommended Rating: ⭐️⭐️⭐️⭐️⭐️)

• Project Introduction: Hyperliquid is a high-performance decentralized finance platform focused on providing perpetual contract trading and spot trading services. It is based on its own high-performance Layer 1 blockchain and uses the HyperBFT consensus algorithm, capable of processing up to 200,000 orders per second.

• Latest Developments: This week, the overall market experienced severe fluctuations, with the market continuously reaching new highs before Wednesday. After the Federal Reserve meeting on Thursday, there was a significant drop, creating a favorable trading environment for users looking to participate in contract trading for high returns. Many on-chain users flocked to Hyperliquid to trade, resulting in the number of open contracts exceeding $4.3 billion. This week, Hyperliquid responded to market demand by adding leverage trading features for several popular tokens, including VIRTUAL, USUAL, and PENGU, supporting up to 5x leverage, attracting many on-chain users to participate in trading.

Resolv (Token Not Yet Issued): (Recommended Rating: ⭐️⭐️)

• Project Introduction: Resolv is a delta-neutral stablecoin project that focuses on tokenizing market-neutral investment portfolios. The architecture is based on economically viable and fiat-independent sources of income, allowing competitive returns to be distributed to the protocol's liquidity providers.

• Latest Developments: This week, Resolv completed integration with Base, significantly reducing transaction costs and improving transaction speed. It launched lending services for USR, USDC, and wstUSR through Euler Finance and introduced a USR-USDC liquidity pool on Aerodrome. It also adjusted Spectra YT yield points to 15 points daily, optimized the reward mechanism, initiated a Grants program, and confirmed the first three recipients, while strengthening the platform's competitiveness in the DeFi space through deep collaborations with projects like Base, Euler Finance, and Aerodrome.

Babylon (Token Not Yet Issued): (Recommended Rating: ⭐️⭐️⭐️⭐️⭐️)

• Project Introduction: The Babylon project aims to enhance the security of other proof-of-stake blockchains by leveraging Bitcoin's security. The core idea is to activate idle Bitcoin assets through a trustless staking mechanism, addressing the conflict between Bitcoin holders' pursuit of asset security and participation in high-return projects.

• Latest Developments: This week, despite significant market price fluctuations, BTC has shown strong performance, remaining at high levels. Additionally, users are generally optimistic about BTC's future development, leading to a stronger hold and a desire to unlock the liquidity of held BTC, resulting in more choices for yield-generating projects based on BTC. This week, Babylon deepened the application of ZK scalability technology through collaboration with Layeredge and established a strategic partnership with Sui to advance modular ecosystem development.

Lista DAO (LISTA): (Recommended Rating: ⭐️⭐️⭐️)

• Project Introduction: Lista DAO is a liquidity staking and decentralized stablecoin project based on the BSC chain, aimed at providing users with crypto asset staking yields and lending services for the decentralized stablecoin LISUSD.

• Latest Developments: This week, Lista DAO launched the Gauge Voting and Bribe Market features, allowing veLISTA holders to participate in the LISTA emission decisions for liquidity pools. It also announced strategic partnerships with 48Club_Official and defidotapp, particularly to explore new opportunities in the BNBChain ecosystem, while promoting the integration of PumpBTC as an innovative collateral through the LIP #012 proposal. Additionally, Lista DAO attracts users with approximately $230,000 in weekly veLISTA reward distributions and high APR compounding incentives, along with a competitive borrowing rate of 5.25%. This week, Lista DAO collaborated with FDLabsHQ to conduct a winter event totaling 7,000 USDT and provided airdrop opportunities for slisBNB and clisBNB to BNBChain holders.

In summary, we can see that the projects with rapid TVL growth this week are mainly concentrated in the stablecoin yield sector (gun pools).

Overall Sector Performance

• Stablecoin Market Capitalization Steady Growth: USDT increased from $145.1 billion last week to $145.9 billion this week, a growth rate of 0.55%. USDC rose from $41.5 billion to $42.1 billion, with a growth rate of 1.44%. It is evident that although the market experienced a decline this week, both USDT, which is primarily non-U.S. market-based, and USDC, which is U.S. market-based, have shown growth, indicating that the entire market continues to maintain a steady influx of funds.

• Liquidity Gradually Increasing: The risk-free arbitrage rates in traditional markets are continuously declining due to ongoing interest rate cuts, while the arbitrage rates in on-chain DeFi projects are increasing due to the rising value of cryptocurrency assets, making a return to DeFi a very good choice.

DeFi TVL across various sectors (data source: https://defillama.com/categories)

• Funding Situation: The TVL of DeFi projects has decreased from $54.1 billion last week to $52.9 billion now, marking the first negative growth in nearly two months, with a decline of 2.21%. The main reason for this negative growth is the significant market downturn this week, which led to many contracts and loans being forcibly liquidated, causing a drop in TVL in the DeFi sector and breaking the continuous upward trend of the past two months. In the next two weeks, attention should be focused on the overall changes in TVL and whether the downward trend will persist.

In-Depth Analysis

Driving Forces for Growth:

The core driving factors for this round of growth can be summarized in the following transmission path: the market entering a bull cycle drives an increase in liquidity demand, which in turn pushes up the base borrowing rate level, amplifying the profit space for arbitrage cycle strategies within DeFi protocols. Specifically:

• Market Environment: The bull cycle brings an overall increase in liquidity demand.

• Interest Rate Side: The base borrowing rate rises, reflecting market pricing expectations for funds.

• Yield Side: The yield of cycle arbitrage strategies expands, significantly improving the endogenous returns of the protocol. This transmission mechanism reinforces the intrinsic value support of the DeFi sector, forming a positive growth momentum.

Potential Risks:

Due to the recent upward trend in the market, investors have been more focused on yields and borrowing leverage, while neglecting the risks of a downturn. This week, following the Federal Reserve's unexpected adjustment of next year's four interest rate cuts to two, the market experienced a rapid decline, resulting in over $1 billion in contracts and loan assets being liquidated, causing losses for investors. This liquidation risk could potentially lead to a chain reaction of further liquidations, causing prices to drop further and liquidating more assets.

Other Sector Performances

Public Chains

The top 5 public chains by TVL growth over the past week (excluding smaller public chains), data source: Defilama

Hyperliquid: This week, the overall market experienced significant volatility, with the market continuously reaching new highs before Wednesday. After the Federal Reserve meeting on Thursday, there was a substantial drop, creating a favorable trading environment for users looking to participate in contract trading for high returns. Many on-chain users joined Hyperliquid to trade, resulting in the number of open contracts exceeding $4.3 billion. This week, Hyperliquid responded to market demand by adding leverage trading features for several popular tokens, including VIRTUAL, USUAL, and PENGU, supporting up to 5x leverage, attracting many on-chain users to participate in trading.

Bitcoin: The market reached new highs in the first half of the week but experienced a significant drop after Thursday, with the entire market price declining sharply. BTC's decline was smaller compared to other projects, as users bought BTC to hedge against risks. Additionally, market users are increasingly optimistic about BTC's future rise, leading to a stronger hold on BTC. As a result, users began to deposit their BTC assets into BTCFi projects to earn extra yields, causing Bitcoin's TVL to also increase.

BSC: This week, the BNB Chain introduced new projects such as Seraph_global, SpaceIDProtocol, and cococoinbsc into its ecosystem, actively promoting the integration of AI and Web3 in the gaming sector. It strongly supports the development of Meme projects, providing $50,000 in liquidity support for the CHEEMS and $HMC projects through the Meme Heroes LP program. Additionally, it launched a daily Memecoin airdrop plan that includes projects like GOUT, MALOU, BUCK, and $WHALE, and initiated a Meme Innovation competition with a total prize of $200,000.

AILayer: AILayer's activities this week focused mainly on community operations and ecosystem collaborations: it partnered with OrochiNetwork for a giveaway event; launched a Mini App leaderboard activity to enhance user engagement; continuously attracted community participation through interactive activities like the "Would You Rather Challenge" and "Riddle of the Week"; and held an AMA event themed "How AILayer is Revolutionizing Bitcoin with AI," showcasing the project's vision for the integration of AI and blockchain.

Mantle: Mantle achieved a significant breakthrough this week by integrating Compound III, bringing users the $USDe lending feature and supporting ETH and BTC as collateral assets. It expanded the Mantle Scouts Program to 40 top industry scouts, launched the Mantle Meetup program, and initiated a large incentive event with a total of up to 1 million MNT. Through the Yield Lab project, it successfully attracted over 110,000 users, generating a total of 2.5 million transactions and bringing on-chain traffic to Mantle.

Overview of Growth Rankings

The top 5 tokens by growth over the past week (excluding tokens with low trading volumes and meme coins), data source: Coinmarketcap

This week's growth rankings show a concentration of sectors, with most rising tokens belonging to the public chain sector.

UXLINK: This week, UXLINK reached a strategic partnership with DuckChain and received investment support from UFLY_Labs to jointly build a Social Growth Layer (SGL). The LINE platform's user count surpassed 2 million, and UXLINK set a historical high in the Upbit trading pair. UXLINK launched a large-scale airdrop event totaling $500,000, covering over 20 Web3 projects, and continued to attract new users through joint activities with trading platforms like OKX.

USUAL: This week, Usual launched an innovative USD0++ holder incentive vault and delta-neutral strategy, providing users with APY yields of up to 76%-82%. It maintained stable high-yield performance in Curve's USD0/USD0++ and USD0/USDC pools, averaging over 50%. Usual's TVL recently achieved rapid growth, rising from $750 million to $800 million. After the third-week reward program ended, it showed a 44% increase in TVL, while the minting rate decreased by 28%, creating a deflationary effect for the USUAL token. The Usual project team emphasized that 90% of the tokens are allocated to the community, with a transparent operating model where the DAO retains 100% of the income.

MOCA: This week, Moca released version 3.0, introducing the concept of "integrated accounts" and launching the AIR Kit, aimed at solving the fragmentation of Web3 user identities. Moca formed an important partnership with SK Planet to integrate Moca into the OK Cashbag app, reaching a user base of 28 million in South Korea. The MOCA token is set to launch on the two major South Korean exchanges, Upbit and Bithumb. Moca significantly enhanced user experience and ecosystem participation through deep collaboration with Nifty Island and the launch of Fixed Mode to optimize the MocaDrop mechanism.

HYPE: This week, the overall market experienced significant volatility, with the market continuously reaching new highs before Wednesday. After the Federal Reserve meeting on Thursday, there was a substantial drop. The intense fluctuations created a favorable trading environment for users looking to participate in contract trading for high returns, leading many on-chain users to join Hyperliquid for trading, resulting in the number of open contracts exceeding $4.3 billion. This week, Hyperliquid responded to market demand by adding leverage trading features for several popular tokens, including VIRTUAL, USUAL, and PENGU, supporting up to 5x leverage, attracting many on-chain users to participate in trading.

VELO: Velodrome partnered with the Soneium platform developed by Sony Block Solutions Labs this week, expanding Velodrome to this new generation Layer 2 solution based on Optimism Superchain. It also made significant progress in liquidity building, with inkonchain locking 2.5M veVELO and providing $1.4M in incentive funds. Additionally, it provided liquidity support for the proxy tokens of Mode Network.

Meme Token Growth Rankings

Data source: coinmarketcap.com

This week, Meme projects were significantly affected by the market downturn, not following the market's rise in the first half of the week. After a drop on Wednesday, they followed the market with a substantial decline, resulting in very few Meme coins showing upward trends this week. It is evident that the current market's attention and funds are not focused on the Meme coin sector.

Social Media Hotspots

Based on the top five daily growth topics from LunarCrush and the top five AI scores from Scopechat, the statistics for this week (12.14-12.20) are as follows:

The most frequently mentioned topic is L1s, with the listed tokens as follows (excluding tokens with low trading volumes and meme coins):

Data source: Lunarcrush and Scopechat

According to data analysis, the L1s projects received the highest attention on social media this week. After the Federal Reserve adjusted next year's interest rate cut expectations from four times to two on Thursday, there was a significant drop, with the entire market following suit. The declines in various public chains were smaller compared to other sectors. During a general market downturn, public chains often perform better than other sectors. Besides buying BTC and ETH for hedging, most investors still invested in various public chains, and when the downturn ended, public chains generally rose before other projects.

Overall Market Topic Overview

Data source: SoSoValue

According to weekly return rate statistics, the Cefi sector performed the best, while the Gamefi sector performed the worst.

• Cefi Sector: In the Cefi sector, BNB and BGB have a significant share, accounting for 86.07% and 5.45%, respectively, totaling 91.52%. This week, Binance continued to launch new coins, maintaining a daily introduction of influential tokens, which brought considerable traffic to Binance. Meanwhile, BNB performed better than the market, declining by 2.58%, which was better than BTC and ETH. Additionally, Bitgit has recently performed well, continuously listing popular tokens, with its token BGB rising 37.93% this week, driving the overall performance of the Cefi sector.

• Gamefi Sector: Throughout this cycle, the Gamefi sector has not received much market attention, resulting in a lack of funds and traffic, which has diminished the previous wealth effect in the Gamefi sector, leading to decreasing interest. The tokens IMX, BEAM, GALA, SAND, and AXS account for a total of 82.14% in this sector, and their performance this week was weaker than the market, resulting in the Gamefi sector performing the worst.

Next Week's Major Crypto Events

• Thursday (December 26): Initial jobless claims in the U.S. for the week

Outlook for Next Week

Macroeconomic Factors Assessment

• Next week marks the beginning of the Christmas holiday in the U.S., with few macro data releases.

• Historically, during the Christmas and New Year holidays, markets primarily driven by U.S. buyers tend to see a decrease in purchasing power and increased market volatility.

Sector Rotation Trends

• DeFi Sector

Although the current market environment is poor, investors generally expect a broad market rally in the first quarter of next year. Therefore, most investors are still reluctant to sell their tokens. Meanwhile, to increase their holding yields, they are participating in gun pool projects to enhance returns.

• AI Sector

The AI Agent sector continues to attract market attention, with the market size reaching $9.9 billion. The integration of Web2 and Web3 ecosystems is accelerating, and the integration of data networks and functional AI Agents with existing crypto products is speeding up.

Investment Strategy Recommendations

• Maintain a defensive allocation, increasing holdings in top assets like BTC and ETH to enhance the hedging properties of assets.

• While hedging risks, consider participating in some high-yield gun pool DeFi projects.

• Investors are advised to remain cautious, strictly control positions, and manage risks effectively.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。