1. Market Focus Interpretation

Last week's core driver of the market was the severe escalation of the US-Iran conflict. With the Strait of Hormuz facing substantial threats, WTI crude oil prices surged nearly 17% during the week, returning above the $100 mark. This also triggered strong inflation expectations, leading to rising US Treasury yields and putting heavy pressure on overvalued tech stocks. The US dollar index broke through the 100 mark, suppressing gold gains. Cryptocurrencies, as high-risk assets, faced significant sell-offs, with weekly declines exceeding 6%. As the US-Iran conflict entered its fifth week with no signs of resolution, the sell-off continued. Last week's volatility and uncertainty indicators reflected the current macroeconomic tone. The VIX index closed at 31.05, the highest level since the outbreak of war; meanwhile, CNN's Fear and Greed Index fell to the "extreme fear" level, the lowest since November last year. The bond market further adjusted pricing, with the 10-year US Treasury yield rising to 4.44%, and the 30-year yield briefly surpassing 5% before retreating slightly below that level. This trend reflects the market's entrenched expectation that "high interest rates will last longer," with the current consensus being that the likelihood of the Federal Reserve cutting rates before autumn is minimal, while the chance of a 25 basis point rate hike this year is about 25%.

2. Liquidity Analysis

2.1 Net Inflow of Crypto ETFs

In the past week, the flow of crypto ETFs showed a clear "outflow followed by recovery" structure: during the middle of the week, fund sentiment quickly weakened, with a total net outflow of about $500 million from spot ETFs, including approximately $296 million from BTC and about $207 million from ETH. The selling pressure was mainly concentrated on the trading days of March 26-27, indicating a clear phase of risk reduction by institutions. Over the weekend, there was a marginal return of funds, ending a trend of consecutive outflows. Overall, institutional funds remain cautiously allocated amid macro uncertainty.

2.2 TradFi Liquidity

In the past week, on-chain trading remained centered around macro asset volatility. Perp DEX TradFi trading volume rose to $17 billion, with crude oil trading still holding the highest weight but continuing to decline month-on-month, while gold's share increased again. CEX saw a surge in TradFi perpetual trading volume, with March 23 setting a historical high. All subcategories showed significant growth, with commodities and metals experiencing the highest month-on-month increases.

In the past week, the market depth changes of PAXG exhibited a "weak then strong, tail volume increase" structure. At the beginning of the week, Delta was mainly negative, combined with prices retreating from highs, indicating a market dominated by net selling and liquidity leaning towards withdrawal; subsequently, around March 23, there was a wave of concentrated selling pressure, corresponding to a rapid price drop, creating a temporary liquidity vacuum. Over the weekend, the depth structure improved significantly, with Delta turning to sustained positive values and expanding in scale, indicating that funds began to actively absorb and push prices back up.

In the past week, the number of TradFi asset categories further expanded, with three mainstream CEXs increasing the total number of TradFi asset categories (counting only TradFi and CFD segments, excluding perpetual contracts) from 598 to 619, a month-on-month growth of 3.5%. The growth in metal categories was the most significant, increasing from 22 to 31, a month-on-month growth of 40%; overall, only Gate saw an increase in the number of TradFi asset categories last week.

3. On-Chain Data Insights

3.1 DEX Trading Cools Down, Meteora Maintains High Levels

Trading enthusiasm shifted from a peak last week to a cooling phase, with leading protocols generally retreating. PancakeSwap and Uniswap saw weekly trading volumes decline compared to last week, with overall spot trading demand on mainstream chains converging. On the Solana side, there was a divergence, with Meteora still maintaining a trading volume slightly above $20 billion, but marginal increments have slowed; Raydium's weekly trading volume fell by 50%, marking the largest decline among leading DEXs. Aerodrome, Humidifi, and Bisonfi also experienced varying degrees of decline. Looking at the protocol side, PancakeSwap's Infinity architecture and Meteora's DLMM remain the strongest efficiency labels, but the market this week places more emphasis on deterministic liquidity.

3.2 Stablecoin Total Volume Consolidates at High Levels, DAI Shows Resilience

This week, the stablecoin sector did not see new external increments, overall consolidating at high levels. USDT remained almost flat compared to the previous week. USDC fell by about $1.4 billion, and PYUSD also declined by nearly $200 million, indicating a slight retreat in demand for payment and settlement-oriented stablecoins this week. Relatively more stable were protocol-based stablecoins, with DAI showing slight growth and USDS maintaining high levels. USD1, USDe, and GHO experienced slight fluctuations, leaning towards structural reallocation. Circle is still promoting the multi-chain expansion of USDC + CCTP, but this week's data reflects a shift in stablecoin internal demand from payment and settlement towards DeFi scenarios.

3.3 LST Protocols Synchronize Retreat, ETH and SOL Both Begin to Slow Down

In the past week, the liquidity staking sector saw ETH and SOL both slowing down simultaneously. Affected by ETH's poor performance, ETH LST funds began to reduce positions, with Lido and Rocket Pool both seeing declines in TVL. Lido's V3 and EarnETH / EarnUSD treasury expansions have widened product boundaries, but short-term TVL is more influenced by market risk appetite and the price volatility of staked assets. SOL is similarly under pressure, with Jito and Sanctum Validator LSTs also experiencing declines. Overall, this week reflected a downward shift in the sector's overall risk appetite.

3.4 Aave Loan Volume Retreats, Mantle Becomes One of the Few Markets Absorbing Increment

This week, Aave's total loan balance slightly retreated compared to the previous week. The Ethereum main market and Plasma both saw declines of about $100 million, indicating signs of deleveraging in the mainstream market. Multi-chain expansion also temporarily slowed this week, with Base and Arbitrum both retreating. Mantle is one of the few markets experiencing counter-cyclical growth, with loan volumes rising from $555 million to $574 million, becoming a structural highlight this week. Ink also saw a slight increase from $289 million to $292 million, but the growth was limited. Aave is currently advancing around the V4 Hub-and-Spoke, with the market pricing for future cross-market liquidity efficiency, but current funds are prioritizing reducing overall leverage and reallocating a small amount of increment to sub-markets with new narratives.

3.5 Aave's Three Core Assets Loan Rates Continue to Diverge

The average floating borrowing APR for USDC rose from 3.10% to 3.23%, while the demand for dollar stablecoins did not weaken in tandem with the overall loan balance decline this week. In contrast, USDT fell from 3.10% to 3.02%, and WETH also slightly decreased from 2.25% to 2.23%. This week, on-chain funds concentrated borrowing demand more on USDC while compressing broader risk exposure. From a strategic perspective, this typically corresponds to institutions preferring to use USDC for liquidity management, collateral management, and neutral strategy turnover. Combined with Aave's latest governance developments, the risk isolation and liquidity routing framework of V4 is gradually becoming clearer, and the differentiation of interest rates between different assets is likely to occur more frequently in the future, better reflecting true funding preferences.

3.6 Protocol Revenue Shifts from Transaction-Driven to Stock-Driven

The revenue of transaction-based protocols has generally cooled down, with stablecoin issuers remaining the most stable profit centers. Tether and Circle's revenues remained stable at high levels this week. In contrast, Hyperliquid fell from $14.3025 million to $12.6277 million, Pump dropped from $7.1452 million to $6.6905 million, and EdgeX also retreated from $4.5534 million to $3.7969 million, indicating that the cooling of trading activity has transmitted to the revenue side. Overall, the main storyline of protocol revenue this week is which revenues are less dependent on short-term trading fluctuations.

4. Derivatives Tracking

4.1 Funding Rates Shift to Short-Term Bullish, Sentiment Switches to Tentative Longs

BTC funding rates overall showed a structure shifting from repair to briefly turning positive and then fluctuating again. The previously deep negative sentiment dominated by shorts has clearly eased, with funding rates turning positive mid-week and maintaining for several days (peaking close to +0.005), as the market shifted to actively testing long positions, with short-term risk appetite showing signs of recovery, resonating with a phase of price rebound. However, this positive funding rate phase was short-lived and of limited intensity, failing to form a trend of positive premium structure.

4.2 Open Interest Peaks and Retreats, Leveraged Funds Shift to Wait-and-See

In the past week, BTC open interest initially expanded to a peak alongside price increases but then quickly fell back to around $21 billion as prices retreated, indicating clear deleveraging in the market; thereafter, open interest failed to return to previous highs, instead oscillating within the $21 billion to $22.5 billion range, with overall central tendency shifting downwards, and insufficient momentum for new funds to enter, leading to a shift from expansion to contraction in leverage. Overall, the current open interest structure is primarily based on existing positions, lacking sustained volume support, and the market remains in a phase of oscillatory reconstruction after deleveraging.

4.3 Options Open Interest Concentrated in Mid-to-Late Month and High Strike Prices, Bullish Structure Dominates

BTC options open interest is mainly concentrated in mid-to-late month contracts such as April and June, with the market primarily focused on mid-term layouts; structurally, Calls are significantly higher than Puts, remaining overall bullish. In terms of strike prices, Calls are mainly concentrated in the $80,000 to $120,000 range, while Puts are distributed in the $60,000 to $80,000 range, forming a typical structure of bullish sentiment above and hedging below. It is noteworthy that the Put open interest around $60K to $70K is not low, indicating that while the market maintains mid-term bullish expectations, short-term defensive sentiment is also strengthening.

4.4 Skew Remains in Negative Territory, Short-Term Defensive Sentiment Dominates

In the past week, BTC 25D Skew remained in negative territory (around -6 to -10), with Puts still carrying a premium relative to Calls, indicating that the market's pricing of downside risks remains elevated. Short-term (7D, 30D) volatility was more pronounced, experiencing a rapid decline followed by a brief recovery, reflecting the short-term sentiment's repeated switching; while medium to long-term (60D and above) remained relatively stable, overall maintaining in the -5 to -7 range, showing little change in mid-term risk expectations. Overall, Skew has not shown a sustained rise towards neutral or positive territory, indicating that while the market has attempted to recover, defensive allocations still dominate.

4.5 Implied Volatility Stabilizes, Market Has Limited Expectations for Short-Term Volatility

In the past week, the BTC DVol index oscillated within the 52% to 55% range, initially experiencing a slight decline followed by a rebound, without showing a trend of significant increase, as the market's pricing of future volatility remains relatively restrained. During this period, prices experienced a notable decline, but implied volatility only rose moderately, without panic-driven expansion, indicating that the market does not view the current adjustment as a high-risk event. Overall, IV and prices exhibit a certain desensitization characteristic, reflecting that traders prefer expectations of range-bound volatility rather than one-sided trending markets.

5. This Week's Outlook

6. Gate Institutional Dynamics Update

Refined Operations

1. Promoting data-driven and refined management, accurately identifying customer needs, and enriching customized solutions.

2. Significant effectiveness in waking up dormant users.

Funding Business

1. Collateral lending scale continues to grow, approaching bull market levels.

2. BTC interest rates lowered, driving new demand growth.

Products and Technology

1. Websocket contract BBO real-time push fully opened in April.

2. AI gradually being implemented, with institutional services entering the AI-assisted operational phase.

Activities and Market

1. CrossEx advanced trading incentive program launched, with a maximum contract rebate order fee rate of -0.01% starting April 9.

2. The April Hong Kong Web3 Festival Side Event is about to begin.

Data Sources:

• Investing, https://investing.com/currencies/xau-usd-historical-data

• Gate, https://www.gate.com/trade/BTC_USDT

• CMC, https://coinmarketcap.com/real-world-assets/?type=all-tokens

• Coinglass, https://www.coinglass.com/pro/depth-delta

• Dune, https://dune.com/gateresearch/gate-institutional-weekly-report

• CryptoQuant, https://cryptoquant.com/asset/btc/chart/derivatives

• Amberdata, https://pro.amberdata.io/options/deribit/btc/current/

Gate Research Institute is a comprehensive blockchain and cryptocurrency research platform that provides readers with in-depth content, including technical analysis, hot insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.

Disclaimer

Investing in the cryptocurrency market involves high risks. Users are advised to conduct independent research and fully understand the nature of the assets and products they purchase before making any investment decisions. Gate is not responsible for any losses or damages resulting from such investment decisions.