Market Overview

The cryptocurrency market clearly rebounded this week, with the sentiment index rising from 11% to 35%. Although it is still in the panic zone, there has been significant improvement. The market capitalization of stablecoins continues to grow, with USDT reaching 137.4 billion and USDC reaching 46.5 billion, indicating that institutional funds are continuously entering the market. The market rebound is mainly driven by two factors: the US CPI data meeting expectations and the optimistic expectation of the new government easing crypto regulations. Overall, small-cap tokens have outperformed the larger market, especially DeFi and AI-related tokens, which have seen significant increases, showing that funds are starting to shift from Bitcoin to small-cap tokens.

The total locked value in the DeFi sector has slightly increased to $53.5 billion, reflecting a month-on-month growth of about 1%. Notably, DeFAI, as a product combining DeFi and AI, saw its market capitalization surge from $600 million to $3.2 billion within a week, indicating strong market enthusiasm for innovative DeFi applications.

The AI Agent sector continues to maintain a strong development trend, shifting from pure token trading to deeper application scenario development. The rise of DeFAI marks the entry of AI applications in the crypto field into the 2.0 stage, mainly reflected in four directions: user-friendly AI interfaces, portfolio management, infrastructure construction, and market analysis and prediction. The development paths of leading projects such as Griffain, Anon, and AXIBT show that the market is transitioning from the proof-of-concept stage to the practical application stage.

The Meme coin sector performed flat this week, with a noticeable decline in market attention. This indicates that investors' risk appetite is shifting from purely speculative Meme tokens to projects with practical application scenarios. However, as political topics heat up, the market anticipates a new wave of Meme coin speculation centered around political themes.

Layer 1 public chains are showing a stable upward trend overall, but the growth rate is not as high as that of the DeFi and AI sectors. Among mainstream public chains, those with advantages in AI and DeFi ecosystems are performing better, reflecting that the value of underlying public chains is increasingly dependent on the prosperity of the upper-layer application ecosystems. It is noteworthy that public chains supporting AI computation are beginning to attract market attention, indicating that a new round of competition among public chains may revolve around AI computing capabilities.

The short-term market will be influenced by the Federal Reserve's interest rate meeting and the new government's inauguration, with expected increased volatility. It is recommended that investors focus on projects within the DeFAI initiative that have actual application scenarios, avoiding chasing purely conceptual speculation. In terms of DeFi investments, attention can be given to yield opportunities in machine gun pool projects, but leverage risk must be strictly controlled. Regarding timing, it is advised to observe changes in new policies in the short term, avoiding blind chasing of highs to ensure the safety of the investment portfolio.

Market Sentiment Index Analysis

The market sentiment index rose from 11% last week to 35%, still within the panic range, but has seen some recovery. Small-cap tokens performed better than the benchmark index this week, with most tokens experiencing gains exceeding the overall market. This was mainly influenced by optimistic sentiment driven by CPI data and expectations of relaxed regulation from the new government on the crypto market, leading to an increase in market prices. Given the current market structure, it is expected that small-cap tokens will remain in sync with the benchmark index in the short term.

Hot Tracks

DeFAI

This week, the overall market is in a trend of fluctuating upward movement, with all sectors rising. The AI sector has rebounded strongly, with the focus shifting from AI Meme to DeFAI. The market capitalization of DeFAI has risen from $600 million to $3.2 billion, achieving more than a fourfold increase within a week. DeFAI can be divided into four types of projects: abstraction/user-friendly AI, yield optimization and portfolio management, DeFAI infrastructure or platforms, and market analysis and forecasting. Representative projects include Griffain, Anon, and AXIBT. Although DeFAI has recently seen rapid growth and gained significant attention, it is still in the early stages, with most functionalities not yet implemented. When investing, one should pay attention to the practical implementation and be cautious of speculation risks.

DeFi Track

TVL Growth Ranking

The top 5 projects with the largest TVL increase in the past week ( TVL > 30 million USD ):

1. Folks Finance( has not issued tokens): Focus on ecological cooperation and community incentives, collaborating with DeBank to achieve xChain account monitoring, launching a governance incentive program with rewards of up to 4 times.

2. Beets( Unissued Token): stS staking amount exceeds 88.99 million, collaborating with PaintSwap to introduce SolvProtocol, launching the scUSDC|USDC liquidity pool.

3. AlphaFi(ALPHA): Launched an optimized liquidity program, contributing approximately 10% of the trading volume on the Sui chain, demonstrating strong community engagement.

4. Echelon Market( Unissued Tokens): Actively recruiting engineers to develop DeFi applications, organizing community discussion meetings, and announcing high yield rates to attract users.

5. Astherus( has not issued coins): Launched the USDF stablecoin, with TVL exceeding 100 million USD, becoming the second largest perpetual contract trading platform in the market.

Performance in Other Tracks

Public Chain

Top 5 public chains with the highest TVL increase in the past week:

1. Sonic: Launching multi-currency DeFi applications, introducing real-time deposit functionality, and collaborating with RedotPay to develop global payment solutions.

2. Hyperliquid: Successfully launched the SOLV token, achieving "Day 1 three-terminal synchronization," and established a strategic partnership with Azuki.

3. Algorand: Completed the 4.0 version upgrade, launched the NodeKit tool, and reached strategic cooperation with Mastercard and others.

4. BSquared: Processed over 101 million transactions, driving Bitcoin's transformation into an AI innovation hub, optimizing DeFi yield solutions.

5. Mode: Launch the "Agentic Economy" initiative, release the Mode 2025 DeFAI technology stack plan, and start the AI Founder School project.

Overview of the Rise Rankings

The top 5 tokens with the highest growth in the past week ( excluding those with low trading volume and meme coins ):

1. ANON: Released the AUTOMATE TypeScript framework, initiated DAO governance, and implemented multi-chain circulation support.

2. BUZZ: Won first place in the Solana AI Hackathon, launched multiple feature updates, and experienced rapid user growth.

3. CGPT: Launched on multiple exchanges, introduced smart contract auditing tools and anti-fraud solutions.

4. ARC: Strategic cooperation has been established with AbstractChain, Shuttle_dev, and CryptoEternal AI.

5. GRIFFAIN: Launched three major features: "Agent GM", "Agent Moby", and "Agent Backpack".

Outlook for Next Week

Macroeconomic Factors Assessment

The key events next week will be the inauguration of the new government and personnel changes in regulatory agencies. The market expects the new government to possibly issue favorable cryptocurrency policies; if this is not mentioned, it may dampen market sentiment. Increased market volatility is anticipated.

Sector Rotation Trend

DeFi Track: Investors generally expect a market uptrend in the first quarter, increasing participation in machine gun pool projects to earn token rewards.

AI Sector: Market size reaches $15.9 billion, growing by 16.65%. Attention shifts to DeFAI, creating a new track by combining AI with DeFi.

It is recommended to pay attention to DeFAI projects that have practical applications and to avoid chasing purely conceptual hype. For DeFi investments, one can focus on machine gun pool projects, but it is necessary to control risks. In the short term, it is advisable to watch for changes in new policies and avoid blindly chasing high prices.