Market Fluctuation Intensifies, DeFi and AI Agent Tracks Attracting Follow | Crypto Market Weekly Report

Market Overview

Main Trends in the Market

Market Overview

This week the market is in a state of extreme panic, with the sentiment index plummeting from 53% to 7%. The Fed's hawkish stance has led to a reduction in the expectation of rate cuts from 4 times to 2 times, triggering about $1 billion in forced liquidations, and the market is experiencing a significant deleveraging process.

Decentralized Finance ecosystem development

The DeFi sector has seen its first negative growth in TVL in the past two months ( -2.21% ), but the market capitalization of stablecoins continues to grow ( USDT +0.55%, USDC +1.44% ). This indicates that despite the market pullback, the underlying liquidity continues to flow in, and stable yield projects like money gun pools are in high demand.

AI Agent

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

Meme Coin Trends

The popularity of the Meme coin market has noticeably cooled down, with a large-scale withdrawal of funds. This indicates that market speculation sentiment has decreased, and investors are more inclined to seek projects with substantive application value, possibly marking the phased end of the Meme coin craze.

Public Chain Performance Analysis

The market is experiencing significant fluctuations, and the public chain sector has shown strong resistance to decline, becoming the first choice for investors seeking refuge, reflecting that the market's confidence in infrastructure remains solid.

Future Market Outlook

With the Christmas holidays approaching, market liquidity is expected to decrease. It is advisable to adopt a defensive allocation strategy, focusing on BTC and ETH, and to follow DeFi stable yield and AI infrastructure projects, but one must be wary of the heightened fluctuation risk that may occur during the holiday period.

Market Sentiment Index Analysis

• The market sentiment index has fallen from 53% last week to 7%, in the extreme fear zone.
• Altcoin underperformed the benchmark index this week, showing a significant decline. Due to the impact of leveraged positions, the market experienced forced liquidations of over $1 billion in positions, leading to a significant deleveraging of long positions. Given the current market structure, it is expected that Altcoin will remain in sync with the benchmark index in the short term, with a low probability of an independent market.
• Altcoins often experience upward reversals when they are in extreme fear zones.

Overview of the overall market trend

• The crypto market is in a downtrend this week, with the sentiment index at extreme fear.

• DeFi related encryption projects have performed outstandingly, showing that the market continues to follow aspects of improving basic returns.

• The AI Agent track project has generated high public opinion this week, indicating that investors are beginning to actively search for the next market breakout point.

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

Hot Track

AI Agent

This week, the market is in a downward trend, with all sectors declining. Although the token prices in the AI Agent sector have also dropped, it remains the most discussed topic in the market. Previously, the focus on AI Agent was concentrated on AI Meme tokens, but it has now shifted towards infrastructure development.

Due to the unpopularity of traditional VC coin projects, Meme coins find it difficult to sustain growth, and AI Agents may lead the next stage of market development. This track includes multiple directions such as AI DePIN, AI Platform, AI Rollup, and AI infra, which can be deeply integrated with blockchain. Essentially, each project is a form of smart contract, and AI Agents aim to enhance and improve smart contracts, naturally aligning with the encryption ecosystem.

Top five AI Agent projects by market capitalization:

| Project Name | Market Cap ( million USD ) | 7-Day Fluctuation | |---------|--------------|----------| | Worldcoin| 293.47 | -14.91% | | Fetch.ai| 290.86 | -30.73% | | SingularityNET| 245.39 | -28.06% |
| Ocean Protocol| 169.20 | -23.06% | | Akash Network| 145.19 | -15.76% |

Decentralized Finance赛道

TVL Growth Ranking

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

| Project Name | Weekly Increase | TVL( million USD) | |---------|-----------|---------------| | VaultCraft | 5344.32% | 102.41 | | Hyperliquid | 183.98% | 2754.63 | | Resolv | 77.31% | 131.34 | | Babylon | 64.43% | 5774.49 | | Lista DAO | 48.52% | 859.86 |

VaultCraft(VCX): ( Recommended Index: ⭐️⭐️)

• Project Introduction: A public chain project based on Algorand, aimed at reducing storage and startup network costs.
• Latest developments: Launched stETH 4X leverage Looper based on Lido Finance, supporting multi-chain deployment, providing up to 7%+ APY. Collaborated with Matrixport to secure 1000 BTC custody business, with TVL rapidly growing. At the same time, strategic cooperation with Safe and CoWSwap has been achieved.

Hyperliquid(HYPE): (Recommended Index:⭐️⭐️⭐️⭐️⭐️)

• Project Introduction: High-performance Decentralized Finance platform, focusing on perpetual contracts and spot trading.
• Latest Developments: The market has experienced significant Fluctuation, attracting a large number of users to participate in trading, with open contracts exceeding $4.3 billion. Multiple popular crypto market trading pairs have been added, supporting up to 5x leverage.

Resolv( Unissued Coins ): ( Recommendation Index: ⭐️⭐️)

• Project Introduction: Delta Neutral Stablecoin Project, focusing on tokenizing market neutral investment portfolios.
• Latest developments: Completed integration with Base, launched lending services and liquidity pools, optimized reward mechanisms, and initiated the Grants program.

Babylon( Unissued Token ): ( Recommended Index: ⭐️⭐️⭐️⭐️⭐️)

• Project Introduction: A project that enhances the security of other PoS chains by utilizing the security of Bitcoin.
• Latest developments: Deepening the application of ZK technology in collaboration with Layeredge and establishing a strategic partnership with Sui to advance a modular ecosystem.

Lista DAO(LISTA): ( Recommendation Index: ⭐️⭐️⭐️)

• Project Introduction: A liquidity staking and decentralized stablecoin project on the BSC chain.
• Latest developments: launched Gauge Voting and Bribe Market features, established strategic partnerships with multiple projects, and carried out winter activities and airdrops.

Overall performance of the track

• The market value of stablecoins is steadily increasing: USDT has grown by 0.55%, and USDC has grown by 1.44%, indicating a continuous influx of funds.

• Liquidity is gradually increasing: On-chain DeFi arbitrage rates have risen due to the increase in crypto asset values, making a return to DeFi a good choice.

• Funding Situation: DeFi TVL decreased from 54.1 billion USD to 52.9 billion USD, marking the first negative growth in nearly two months (-2.21%), mainly due to market decline leading to liquidations.

In-depth Analysis

Driving Force of Increase:

• The bull market cycle drives the demand for liquidity to rise.
• The basic lending rate is rising
• The profit space for arbitrage strategies in Decentralized Finance protocols has expanded.

Potential Risks: The long-term rise in the market has led investors to overlook the risks of a downturn. This week, a large-scale liquidation triggered by changes in Federal Reserve policy may lead to a chain of liquidations.

Performance in Other Tracks

public chain

Top 5 Public Chain TVL Growth in the Past Week:

| Project Name | Rise in the Last Seven Days | TVL ( million USD ) | |---------|-----------|---------------| | Hyperliquid | 183.98% | 2754.63 | | Bitcoin | 44.94% | 7021.98 | | BSC | 2.71% | 5793.56 | | AILayer | 2.02% | 219.18 | | Mantle | 0.75% | 489.23 |

Hyperliquid: The market fluctuations are intense, attracting a large number of users to participate in trading, with open contracts exceeding $4.3 billion. Multiple popular cryptocurrency trading pairs have been added, supporting high leverage.

Bitcoin: Relatively resilient to downturns, users are buying in for safety. The BTCFi project is attracting funds, driving an increase in TVL.

BSC: Introduce new projects, promote the integration of AI and Web3 gaming, support the development of Meme projects, launch airdrops and innovative competitions.

AILayer: Focused on community operations and ecological cooperation, hosting multiple interactive activities.

Mantle: Achieved significant breakthroughs by integrating Compound III, launched a large incentive campaign, successfully attracting on-chain traffic.

Overview of the Rise List

Top 5 tokens with the highest increase in the market over the past week:

| Token | Project Name | Weekly Growth Rate | Circulating Market Cap | Circulation Rate | |------|----------|------------|----------|--------| | UXLINK | UXLINKl | 107.18% | $202,170,534 | 17.01% | | USUAL | Usual | 74.72% | $551,884,166 | 96.89% | | MOCA | Moca Network | 72.37% | $230,592,827 | 17.37% | | HYPE | Hyperliquid | 52.43% | $9,050,605,832 | 33.39% | | VELO | Velodrome Finance | 47.49% | $195,966,876 | 45.42% |

This week's increase ranking shows a concentration characteristic in the public chain track.

UXLINK: Cooperated with multiple projects, user base exceeded 2 million, launched a large-scale airdrop event.

USUAL: Introduce innovative incentive mechanisms, rapid growth of TVL, emphasize community-oriented operating model.

MOCA: Released version 3.0, collaborating with large enterprises to expand the user base, and will soon be listed on mainstream exchanges.

HYPE: The market Fluctuation attracts a large number of trades, and new popular trading pairs support high leverage.

VELO: Collaborating with new platforms to expand the ecosystem and making progress in liquidity building.

Meme Token Price Increase Ranking

| Token | Project Name | Weekly Growth Rate | Circulating Market Cap | Associated Public Chain | |------|----------|------------|----------|----------| | FARTCOIN | Fartcoin | 96.66% | $1,042,961,684 | Solana | | AIXBT | aixbt by Virtuals | 18.83% | $274,894,511 | BSC | | CHEEMS | Cheems Token | 8.58% | $205,254,035 | BSC |

This week, Meme projects were significantly affected by the market decline, showing poor overall performance, indicating that the current market attention and funds are not in the Meme coin track.

social media hot topics

This week, L1 projects received the highest level of attention. When the market is experiencing a general decline, various public chains performed well, becoming a safe-haven choice for investors. Public chain projects generally rebounded earlier than other projects.

Overall Overview of Market Themes

In terms of weekly return rates, the Cefi sector performed the best, while the Gamefi sector performed the worst.

Cefi track: BNB and BGB are performing strongly, driving the entire sector. Binance continuously launches new products to attract traffic, while Bitget stands out.

Gamefi Track: Lacks wealth creation effect and market attention, major tokens perform weaker than the market.

Outlook for Next Week

Macro Factors Assessment

• Entering the US Christmas holiday, fewer macro data releases.
• In previous holiday periods, the purchasing power of the market, primarily in the United States, has decreased, and fluctuations may intensify.

Sector rotation trend

• DeFi sector: Investors generally have a positive outlook for the first quarter of next year, leaning towards participating in machine gun pool projects to increase token rewards.
• AI Sector: AI Agents continue to be in focus, the acceleration of integration between Web2 and Web3, and the integration of AI Agents with existing encryption products is speeding up.

Investment Strategy Recommendations

• Maintain a defensive allocation, increase the allocation of BTC and ETH top assets.
• You can participate in high-yield machine gun pool Decentralized Finance projects to hedge risks.
• Stay cautious, strictly control positions, and implement good risk management.