TON is booming, could cryptocurrency be facing a rebound?

Author: Mike, Foresight Research

A. Market Viewpoints

1. Macroeconomic Liquidity

Monetary liquidity is tightening. At Wednesday's meeting, the Federal Reserve hinted at continuing interest rate hikes before the end of the year, indicating that rates need to remain high for a longer period. Market expectations for rate cuts have been pushed back from June next year to September, delaying the bull market phase. As the U.S. economy demonstrates unexpected resilience, the Federal Reserve cannot afford to give high inflation a chance to resurge. The U.S. dollar index has broken through and surged on a monthly basis, suppressing risk assets. U.S. stocks have plunged, and the crypto market is weakly rebounding.

2. Overall Market Trends

Top 100 by Market Cap Gainers:

This week, the market rebound has entered its later stage, with BTC's dominance rising. After gaining recognition from Telegram, the public chain TON has seen an impressive rebound, upgrading its status to a Web3 infrastructure chosen by Telegram with 800 million users. Market hotspots are centered around social and gaming.

1. MKR: As a leader in RWA, it now has an annual income of $180 million, with a net profit of $60 million directly used for token buybacks. The long-term high interest rates on U.S. bonds are favorable for the RWA sector, with an overall corresponding PE of 21 times, which is relatively cheaper than the valuations of U.S. growth stocks. The supply of the stablecoin DAI is also steadily increasing to $5.5 billion. MKR plans to split its business into four Subdaos (social, lending, and two RWA) at the beginning of next year, similar to a spin-off listing.

2. TON: With a market cap of $12 billion, it has entered the top 10. TON is the public chain of Telegram, benefiting from the traffic of 700 million users (similar to WeChat), with the main team coming from Russia and China. The architecture of TON is similar to Polkadot, and its technology is relatively mediocre; there are few applications on it, mainly clones, with a TVL of about $10 million. Recently, after the trading bots gained popularity, the market expects a future embedded ecosystem similar to WeChat mini-programs. The project started in 2017 and transitioned from POW to POS in June 2022, with a large amount of chips held by POW miners. The chips are highly concentrated, with the top 10 addresses holding 80%. TON is mainly used for paying network fees.

3. TOPIA: The game has a market cap of $200 million (SAND has a market cap of $900 million). The original NFT Worlds sandbox game has decoupled from Minecraft, migrating and exchanging tokens for TOPIA (which incurs a 5% loss), and is still in BETA testing, with over 400,000 registered users. The original NFT Worlds land staking and Uniswap LP for TOPIA can both mine TOPIA.

3. BTC Market Trends

1) On-chain Data

Investor confidence in BTC is declining. Almost all short-term holders (within 6 months) are now at a loss, marking the first time since the collapse of the FTX exchange, leading to a negative shift in sentiment.

Stablecoins remain flat overall. According to CoinShares, the total outflow from cryptocurrency investment products in the past week reached $54 million, marking the fifth consecutive week of net outflows. In the past 9 weeks, there have been net outflows in 8 weeks, totaling $450 million. The U.S. is the main region for capital outflows, accounting for 77%.

The long-term trend indicator MVRV - ZScore, based on the total market cost, reflects the overall profitability of the market. When the indicator is above 6, it indicates a top range; when it is below 2, it indicates a bottom range. MVRV has fallen below the critical level of 1, indicating that holders are generally at a loss. The current indicator is 0.5, entering a recovery phase.

2) Futures Market

Futures funding rates: This week the rates are neutral. Rates of 0.05-0.1% indicate a lot of long leverage, suggesting a short-term market top; rates of -0.1-0% indicate a lot of short leverage, suggesting a short-term market bottom.

Futures open interest: This week, the total open interest in BTC has slightly decreased, with speculative funds entering the market.

Futures long-short ratio: 1.1. Retail investors are largely bearish. Retail sentiment often serves as a contrarian indicator; below 0.7 indicates panic, while above 2.0 indicates greed. The long-short ratio data is highly volatile, reducing its reference significance.

3) Spot Market

BTC's daily chart rebound is nearing its later stage, with a resistance level around 28,000. The current phase is similar to the downward process on the monthly chart, with the weekly rebound just ending and the weekly decline still having its latter half. Focus on the certainty of the ETH Cancun upgrade at the end of the year. It is recommended to gradually increase positions during the market decline.

B. Market Data

1. Total Locked Value of Public Chains

2. TVL Proportions of Various Public Chains

This week, the overall TVL has risen by nearly $1.4 billion, an increase of 3.6%. Although there has been a considerable increase in TVL this week, it has not yet exited the downward trend. This week, the ETH chain rose by 7.4%, the BSC chain rose by 3.3%, the ARB chain rose by 6.8%, and both the POLYGON and OP chains also saw increases of over 3%. Notably, the TRON chain achieved over 20% growth in the past week, while the BASE chain's growth has significantly slowed after explosive increases in previous weeks. Other chains have generally risen, and market sentiment has slightly improved over the past week, showing optimism.

3. Locked Value of Various Chain Protocols

1) ETH Locked Value

2) BSC Locked Value

3) Polygon Locked Value

4) Arbitrum Locked Value

5) Optimism Locked Value

6) Base Locked Value

4. Historical ETH Gas Fees

In terms of gas consumption, Uniswap still holds the top position, accounting for 12.98% of the entire market. On-chain transfer fees are about $0.94, Uniswap trading fees are about $3.22, and OpenSea's trading fees are about $1.25. This week, gas fees continued to decline slightly. Although there was a slight rebound in on-chain applications and transactions with the small increase in BTC over the past week, the NFT market's sluggish sentiment has also seen a slight recovery. In terms of gas consumption, Uniswap still leads, accounting for 10.81% of the entire market.

5. Changes in NFT Market Data

1) NFT -500 Index

2) NFT Market Situation

3) NFT Trading Market Share

4) NFT Buyer Analysis

This week, the floor prices of leading blue-chip projects fluctuated little, with BAYC rising by 2.3%, MAYC by 1.3%, DeGods by 2.8%, and Pudgy Penguins by 9.4%. The total number of wallets and repeat buyers are both on the rise, indicating an overall improvement in market conditions, with a certain rebound in first-time buyers, although prices have not yet completely emerged from the slump.

6. Latest Financing Situation of Projects