Crypto market sentiment is sluggish, and the rise of stablecoins indicates a return of funds.

This week, the cryptocurrency market has shown a trend of fluctuation and decline, with the market sentiment index dropping from 11% to 8%. The market capitalization of stablecoins has begun to rise rapidly, with USDT reaching 142.7 billion and USDC reaching 57.2 billion, with increases of 0.49% and 2.32% respectively, indicating that institutional funds are re-entering the market, primarily driven by the growth rate of U.S. funds. Although economic data and the release of the Federal Reserve's white paper have eased concerns about a recession in the U.S. economy, the market also expects the Federal Reserve to cut interest rates three times this year starting in May, but this has not improved market sentiment. Recent policy fluctuations have triggered volatility in Bitcoin prices, leading to increased market panic, and altcoins generally underperforming compared to the benchmark index.

Bullish Asset Analysis

BTC

Bitcoin's recent performance has been weak, primarily affected by the following factors:

1. Macro level: Trump's tariff policy raises inflation concerns, the expected decline in US GDP may lead to a short-term economic recession, the US-Ukraine mineral agreement is on hold, and there is uncertainty regarding the Federal Reserve's interest rate cuts.

2. BTC itself: After maintaining a high level for two months, some long-term holders and whales began to sell, lacking new positive news and capital replenishment. The Bitcoin strategic reserve signed by Trump did not meet expectations.

3. Institutional Sell-off: Institutions led by BlackRock continue to sell off.

However, the bullish reasons include:

1. Improvement in the macro environment: Economic data and the Federal Reserve's Beige Book alleviate recession concerns, with the market expecting three rate cuts this year, possibly starting in May.

2. On-chain data is positive: After the panic sell-off, most holders did not sell and began accumulating.

S

Despite the S token's decline this week following the market, the fundamentals of Sonic remain unchanged:

1. TVL rose by 9.23%, with major Defi projects all achieving growth.
2. On-chain high APY maintenance: Main liquidity pool APY reaches around 30%, and the average lending interest rate rises to 14%.
3. Daily income of $210,000, ranked 6th among public chains, showing active Defi activity.

The S token's decline mainly follows the market trend, with the fundamentals unchanged, and the bullish logic still exists.

AAVE

AAVE rose against the trend this week by 21.38%, with a TVL growth rate of 5.86%, showing outstanding performance. Main reasons:

1. Optimize governance and token economic model: buyback tokens, increase staking rewards, optimize liquidity.
2. The White House supports the abolition of DeFi trading report rules to ease compliance burdens.

AAVE has a strong financial position, supports innovation, and the buyback proposal may trigger a buyback frenzy in the DeFi industry, injecting vitality into the sector.

BERA

Although the BERA token has declined, the on-chain data and fundamentals of Berachain are looking positive:

1. The main projects' TVL rise, especially Infrared Finance and BEX, have shown significant growth.
2. High APY attracts users: Infrared Finance WBERA APY maintains around 120%, BEX stablecoin pool APY is about 16%.
3. Dolomite's borrowing interest rate reaches 48.08%, increasing the demand for BERA.

The decline of BERA is mainly influenced by the market environment, while the project's fundamentals remain unchanged, and the rise logic is still in place.

Bearish Target Analysis

APE

APE mainly involves the NFT and Gamefi sectors and is currently facing challenges:

1. The meme sector occupies a large share of the market, while NFT and Gamefi have lost attention.
2. User reduction, lack of new capital inflow.
3. On March 16, 15.37 million APE will be unlocked, accounting for 1.54% of the total locked amount, which may face selling pressure.

APT

Aptos faces potential risks:

1. Not on the cryptocurrency reserve list announced by Trump.
2. If the White House crypto summit announces reserve details, it may divert attention from Aptos.
3. On March 12, 11.3 million APT will be unlocked, accounting for 1% of the total locked amount, which may create selling pressure from institutional holders.

MERL

Merlin blockchain data shows unfavorable trends:

1. TVL decreased significantly by 12.44%, with major projects MerlinSwap and Pell Network showing a noticeable decline.
2. The development of BTC ecosystem projects is not smooth, and market attention is low.
3. The decline of BTC has led to the withdrawal of staked funds.

Although MERL's decline this week is not significant, on-chain funds continue to flow out, which may face a rise.

TON

Toncoin faces ongoing downward pressure:

1. TVL decreased significantly by 10.68%, with almost all ecosystem projects experiencing a decline in TVL.
2. The TVL has continued to decline since last year.
3. SocialFi projects lack blockbusters, and the user profit-making effect is weakening.
4. The industry sentiment is low, and the TON price has dropped significantly.

Market Sentiment and Hot Tracks

The market sentiment index has dropped to 8%, entering the extreme fear zone. In terms of hot tracks, Aave and Berachain performed outstandingly:

1. Aave TVL rise of 5.86%, coin price increase of 21.38%. Optimizing the governance model and support policies from the White House are the main benefits.

2. Berachain TVL rose by 17.21%, but the BERA price corrected by 12.94%. High APY strategies attract users, but sustainability needs to be monitored.

Future Outlook

1. Pay attention to the performance of fundamentally strong projects like BTC, AAVE, and Berachain.

2. Continuously monitor on-chain data, macro policies, and upcoming token unlock events.

3. Pay attention to changes in market sentiment and emerging hotspots, such as the repurchase trend of DeFi projects.

4. Be wary of the selling pressure and capital outflow risks that some projects may face.