Market Analysis Weekly Report

Overall Market Overview

The current market is in a state of extreme panic, with the sentiment index plummeting from 53% to 7%. The Federal Reserve's hawkish stance has led to a reduction in interest rate cut expectations from 4 times to 2 times, triggering approximately $1 billion in forced liquidations, and the market is undergoing a significant deleveraging process.

The DeFi sector's TVL has seen a negative growth for the first time in nearly two months (-2.21%), but the market value of stablecoins continues to grow (USDT +0.55%, USDC +1.44%), indicating that the underlying liquidity is still flowing in, and stable yield projects like liquidity pools are in high demand.

The market size of the AI Agent track has reached 9.9 billion USD, with investment focus shifting from speculative AI Meme coins to infrastructure development, indicating that the market is gradually maturing and project directions are becoming more rational and practical.

The popularity of the Meme coin market has noticeably cooled down, with funds starting to withdraw on a large scale. Investors are more inclined to seek projects with substantial application value, which may signal the phased end of the Meme coin craze.

The public chain sector has shown strong resilience against market fluctuations, becoming the preferred choice for investors seeking safety, reflecting the market's continued confidence in infrastructure.

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

Hot Track Analysis

AI Agent

This week, the overall market is in a downward trend, with all sectors declining, but AI Agent is the most discussed topic in the market. The focus has shifted from AI Agent Meme tokens to infrastructure development. AI Agent is expected to lead the next stage of market development, covering multiple directions such as AI DePIN, AI Platform, AI Rollup, and AI infra, which align closely with blockchain.

Top five AI Agent projects by market capitalization:

1. Worldcoin (WLD)
2. Fetch.ai (FET)
3. SingularityNET (AGIX)
4. Ocean Protocol (OCEAN)
5. Oasis Network (ROSE)

DeFi track

Top 5 in TVL Growth:

1. VaultCraft: 5344.32%
2. Hyperliquid: 183.98%
3. Resolv: 77.31%
4. Babylon: 64.43%
5. DAO List: 48.52%

The overall TVL decreased from $54.1 billion to $52.9 billion, marking the first negative growth (-2.21%). The main reason is the significant market decline leading to contract and loan liquidations, breaking the continuous upward trend of the past two months.

Stablecoin market capitalization grows steadily: USDT increased by 0.55% to 145.9 billion USD, USDC increased by 1.44% to 42.1 billion USD, indicating ongoing capital inflow.

Driving Force of Increase: The bull market cycle drives up liquidity demand, raising the base borrowing interest rates and amplifying the profit margin for arbitrage strategies in DeFi protocols.

Potential risks: the market is overly focused on yield and leverage, neglecting the risk of decline. Changes in Federal Reserve policy can trigger rapid downturns, causing a large number of liquidations, which may lead to a chain reaction of liquidations.

public chain

Top 5 TVL Increases:

1. Hyperliquid: 183.98%
2. Bitcoin: 44.94%
3. BSC: 2.71%
4. AILayer: 2.02%
5. Mantle: 0.75%

Public chains have shown relatively strong performance during the market downturn, becoming a safe-haven choice. Various chains are actively expanding their ecosystems and launching incentive activities to continuously attract users and funds.

Token Price Rise and Fall Rankings

Top 50 by growth rate excluding low trading volume and meme coins (:

1. UXLINK: 107.18%
2. USUAL: 74.72%
3. MOCA: 72.37%
4. HYPE: 52.43%
5. VELO: 47.49%

Mainly focused on the public chain track, most projects drive token value growth through ecological expansion, product upgrades, and incentive activities.

Meme Token Rise Ranking:

1. Fartcoin )FARTCOIN(: 96.66%
2. aixbt by Virtuals )AIXBT(: 18.83%
3. Cheems Token )CHEEMS(: 8.58%

Meme coins have performed poorly overall, failing to follow the market's rise, and experiencing significant declines, indicating a decrease in market attention and capital inflow.

Social Media Hot Topics

The most关注度 is on L1s projects. During the market downturn, various public chains performed well, becoming a safe haven choice beyond BTC and ETH.

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Market Theme Overview

In terms of weekly return rate, the CeFi sector performed the best ) -6.61% (, while the GameFi sector performed the worst ) -26.37% (.

Cefi benefits from the strong performance of Binance and Bitget. Gamefi continues to lack market attention and capital inflow, with major tokens underperforming compared to the overall market.

Next Week Outlook

Macroeconomic factors:

• The United States enters the Christmas holiday with fewer macro data releases.
• The purchasing power of the market led by the United States decreases during holidays over the years, and volatility may intensify.

Sector Rotation Trend:

• DeFi: Gun Pool projects are in high demand, as investors seek to increase their holding yields.
• AI: The AI Agent track continues to attract attention as Web2 and Web3 accelerate their integration.

Investment Strategy Recommendations:

• Maintain a defensive allocation, increasing the proportion of top assets like BTC and ETH.
• Participate in high-yield machine gun pool DeFi projects to hedge risks
• Stay cautious, strictly control positions, and manage risks effectively.

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