Macro Monthly Report (June)

We saw a mixed picture in the crypto market in June. Bitcoin stayed on a bumpy ride between the range of $60,800 and $71,700, hitting resistance and bouncing back but still pulling $666 million in ETF inflows. Ethereum held its ground in the mid-range, buzzing with excitement over a potential ETF launch in July, though on-chain activity took a nosedive, with gas fees dropping to as low as 1. Solana made a striking comeback, recovering quickly after slipping below $138, thanks to VanEck's first Solana ETF filing. Meanwhile, Toncoin's Total Value Locked (TVL) surged to $700 million, and USDT circulation topped $500 million, showcasing its explosive growth and burgeoning potential. 

The Range Bound Trading of Bitcoin 

Since reaching a new all-time high prior to the halving event, Bitcoin has exhibited range-bound trading behavior, fluctuating between $60,800 and $71,700. During June, Bitcoin made an initial attempt to breach the upper boundary of this range but encountered resistance again, followed by a pullback towards the lower end of the range. From a technical analysis standpoint, Bitcoin has reclaimed the key support level again and is currently making strides towards the mid-range level. In spite of the range bound price action, the market witnessed a ETF net inflow of approximately $666 million for the month.

Ethereum's Resilience Amid ETF Anticipation  

Ethereum has demonstrated relative strength by maintaining its position in the mid-range, bolstered by the anticipation surrounding the final approval and trading of the Ethereum ETFs. The market is optimistic, expecting the ETF to commence trading in early July. This positive sentiment, however, contrasts with a notable decline in on-chain activity, as evidenced by gas fees dropping to as low as 1 gwei.

Ethereum's Layer-2 Challenges 

June also saw significant developments in the Ethereum ecosystem, including the Token Generation Events (TGEs) of two prominent layer-2 solutions, ZKSync and Blast, as well as the bridging solution LayerZero. These projects exhibited the trend of high Fully Diluted Valuations (FDV) coupled with low circulating supply (float), which stirred a certain extent of FUD within the community thanks to the airdrop situations and the plunge of on-chain activities post-TGE. It is worth noting that the market still expects the TGEs of two more layer-2 solutions within the year, including Scroll and Linear.

Solana: A Force Awakening 

Solana has exhibited a notable resurgence this month. The price of SOL recently dropped below the critical support level of $138, a weekly threshold that had held firm since its breakout in February. The SOL price swiftly rebounded following VanEck’s filing of the first Solana ETF to the U.S. SEC. Despite that, we believe the likelihood of materializing the SOL ETF within the year is low. Further, we anticipate that the potential inflow size would also be much lower compared to Ethereum ETFs, let alone Bitcoin’s. 

Bridging Web2 and Web3: Solana Actions and Blinks 

In a significant development, Solana, in collaboration with Dialect, has introduced Solana Actions and Blinks. This innovative product allows ecosystem builders to create clickable links or URLs, enabling users to execute on-chain transactions directly on platforms like X, without the need for redirection to another site. This advancement has sparked renewed market enthusiasm, with ecosystem activities expected to surge due to the seamless integration between Web2 and Web3 technologies. According to Dialect, currently over 70 ecosystem builders have registered and integrated the solution, allowing users to perform various on-chain transactions such as swapping, donation, minting, voting, subscribing and more. 

Image source: Dialect

Moonshot: Unleashing the Next Wave of Meme Coins 

Meme coins continue to maintain their popularity in the crypto space. DEXScreener, a leading provider of real-time on-chain trading data, has launched Moonshot, a product similar to Pump.Fun. This platform enables users to easily and safely create and trade meme coins. Since the launch, over 30,000 meme tokens have been created on Moonshot, offering a fresh stream of meme supply to the market. 

Image source: DEXScreener

Surge in TVL and USDT Circulation shows Ton’s Early Promise 

The Total Value Locked (TVL) on the Toncoin has surged to $700 million by the end of June, a substantial increase from $99 million at the end of the first quarter. Meanwhile, the net circulation of USDT on Ton has also surpassed $500 million since the the launch of USDT on the network. This rapid growth underscores the strong potential and expanding adoption of the Ton ecosystem. 

Despite the impressive growth, the TON ecosystem has witnessed a limited number of token generation events this year. This is primarily because the ecosystem is relatively new, with many projects still in the development phase. Given this early stage of growth, we advise investors to closely monitor the ongoing developments within the TON ecosystem, as it holds considerable promise for future advancements and opportunities.

Navigating Through Low Liquidity Phases 

The performance of stablecoin inflows indicates that market liquidity is continuously deteriorating. Since May, stablecoin issuance has steadily decreased, signaling a gradual worsening of liquidity which has now entered a low zone. 

While a significant net outflow within a month (as seen in May of last year) would be a notable bearish signal, this has not occurred so far. Although current inflows remain weak, they have not turned negative, suggesting that the foundation for a bull market has not yet dissipated. As the market completes its oscillation and consolidation phases, this could lead to new strong inflows and improved liquidity.

Economic Data & Events to Watch in July 2024

Disclaimer 

The content provided in this report is for illustrative purposes only and is intended to offer insights into the cryptocurrency market. It is not, and should not be interpreted as, investment advice or recommendations. The information contained herein is based on sources believed to be reliable; however, we do not guarantee its accuracy, completeness, or suitability for any purpose, and it should not be relied upon as such. Any opinions expressed reflect a judgment at the date of publication and are subject to change without notice. Readers are advised to conduct their own research and due diligence and, where appropriate, seek professional advice before making any investment decisions. The authors and publishers of this report accept no liability for any loss or damage arising from the use of the information provided. 

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