Summary

• Last week, the overall sentiment in the crypto market showed a "cautiously optimistic" pattern, with marginal easing of geopolitical risks in the Middle East and rising expectations for Fed rate cuts this year. BTC rose from $68,000 to above $77,000, and BTC ETFs continued their trend of net inflows.

• The trading heat in TradFi has receded compared to the peak of risk aversion in March, but gold remains a core trading asset, while the proportion of stocks and commodities has rebounded.

• On-chain funds continue to concentrate on high liquidity and high turnover scenarios, with PancakeSwap's weekly trading volume nearing $36 billion, while the Solana ecosystem exhibits characteristics of "small-scale high-frequency trading."

• Stablecoin funds have noticeably flowed back into settlement-type dollar assets, with USDT supply rising to nearly $200 billion, while yield-bearing stablecoin USDe saw a net outflow of nearly $2 billion in a week.

• Following the rsETH incident, on-chain risk appetite has significantly declined, with Aave's lending balance plummeting by 26.7% in a week, core stablecoin borrowing rates rising sharply, and funds accelerating towards competing protocols like Spark.

• The derivatives market has shown a typical divergence structure of "negative funding rates + high volatility," with BTC perpetual contracts remaining crowded with shorts, but spot and institutional buying still providing support; meanwhile, implied volatility and options trading volume have risen in tandem.

• On the institutional and platform side, spot trading increased by 20.09% week-on-week, with over 30 new opportunities; CrossEx trading volume and capital scale hit new highs, increasing by 79% and 816% respectively, as institutions accelerated cross-exchange arbitrage and hedging; the trading system 3.0 architecture is advancing, with infrastructure continuously improving and institutional capital access speeding up.

1. Market Focus Interpretation

Last week, the overall sentiment in the crypto market was characterized as "cautiously optimistic," driven mainly by the marginal easing of the geopolitical situation in the Middle East, rising expectations for Fed rate cuts, and effective hedging against profit-taking pressure from short-term holders due to continued institutional buying. During this period, BTC rose from around $68,000 to above $77,000, an increase of about 12%.

Trump extended the ceasefire agreement with Iran, indicating his desire to resolve the conflict through diplomatic means, but negotiations for a more lasting peace agreement are currently stalled. The Strait of Hormuz, which accounts for about one-fifth of the world's oil supply, remains closed, causing oil prices to rebound to $95 per barrel. In recent weeks, the market has largely digested the tail risks of the Middle East situation, with BTC and ETH continuing to rise, and ETH showing greater resilience due to ecological expectations, while the stock market has also recovered from the sell-off in March. As the Federal Open Market Committee (FOMC) meeting approaches, yields remain stable, with the 10-year Treasury yield around 4.30%. The dollar index remains around 98, having entered a consolidation phase after falling from above 100. Affected by the dollar and interest rates, gold is under overall pressure. Meanwhile, expectations for a rate hike by the Bank of England have risen, with the pound rebounding to around 1.36; if a 22 basis point hike occurs before the end of the year, it may weaken the dollar's key structural support.

This week, while the FOMC meeting is likely to keep interest rates unchanged, the market will focus on changes in the wording regarding inflation, war impacts, and risk balance in the statement, as well as whether there are signals of adjustment for the long-term neutral rate of 3.1%. Expectations for the Fed's rate cut path this year have significantly increased, with the probability of a 25 basis point cut before December now at 39%, up from 23% previously. This change is influenced on one hand by the U.S. Department of Justice dropping its investigation into Powell, further clearing obstacles for Waller to succeed him as Fed Chair, and on the other hand reflects market expectations that if oil prices return to normal ranges, the Fed will have greater easing space in the second half of the year.

2. Liquidity Analysis

2.1 BTC ETF Total Net Asset Value Surpasses $102.64 Billion

Last week, BTC ETFs continued their trend of net inflows since April 14, recording four positive inflow trading days, with a total net inflow of $585 million for the week. ETH ETFs had a total net inflow of $87.3 million for the week, with the pace of inflows slowing compared to the previous week, but overall market sentiment remains optimistic, with institutional investors showing strong long-term holding beliefs.

Top products by net inflow for BTC ETFs:

1. IBIT (BlackRock) - weekly net inflow of $476.6 million

2. ARKB (ARK 21Shares) - weekly net inflow of $59.6 million

Top products by net inflow for ETH ETFs:

1. ETHA (BlackRock) - weekly net inflow of $61.9 million

2. ETHB (Bitwise) - weekly net inflow of $47.8 million

The flow of funds shows a clear concentration effect, with BlackRock's IBIT leading with a weekly net inflow of $476 million, contributing over 80% of the total inflow for BTC ETFs; ETHA also leads the ETH ETF market with $61.9 million. Meanwhile, Grayscale's GBTC and ETHE continue to face persistent outflow pressure, reflecting that the structural migration trend of investors from high-fee legacy products to low-fee new products has not yet ended.

As of April 24, the total net asset value of U.S. spot BTC ETFs has surpassed $102.64 billion, accounting for about 6.5% of Bitcoin's total market capitalization. The total net asset value of ETH ETFs is approximately $13.79 billion, accounting for about 4% of Ethereum's total market capitalization. In terms of fund trends, the net flow of BTC ETFs has turned positive year-to-date, reaching about $1.85 billion, indicating that market confidence is recovering, but whether it can break through the historical cumulative net inflow peak still needs to be observed in the context of the long and short battle around the $80,000 mark.

2.2 TradFi Liquidity

• TradFi Perp DEX: Trading volume over the past week continued to slightly decline compared to previous weeks, with the latest weekly total trading volume dropping to around $10 billion, indicating that after the marginal easing of the Middle East situation and the repair of market risk appetite, the previously high trading heat driven by risk aversion is gradually cooling down. From the asset structure perspective, commodities still dominate, with gold-related asset trading remaining the market core and accounting for most of the trading volume. However, compared to the peak phase in March, the proportion of commodities has contracted, while the proportion of equities, ETFs, and stocks has slightly rebounded, indicating that funds are beginning to spread from single risk-averse trades to a broader range of risk assets.

• TradFi Perp CEX: Since April 20, the overall trading heat in the market has receded compared to the previous March peak but remains in a relatively active range. From the trading structure perspective, precious metals like gold still dominate, but compared to the peak in mid to late March when daily trading exceeded $1.5 billion, recent overall trading volume has significantly contracted, with most trading days maintaining in the $300 million to $500 million range, reflecting that market sentiment is gradually shifting from extreme risk aversion to a phase of oscillation and digestion. Meanwhile, the proportion of stocks and commodities has slightly increased, indicating that funds are beginning to spread from single gold trading to a broader range of TradFi assets, with some users starting to reposition in equities and cyclical assets.

• CEX TradFi Asset Categories: Over the past week, the number of CEX TradFi asset categories has further expanded, with the total number of three major CEXs in TradFi asset categories (only counting TradFi and CFD segments, excluding perpetual contracts) increasing from 955 to 956, a week-on-week growth of 0.1%. Among them, the growth in stock categories is the most significant, increasing from 590 to 594, with only Gate adding 4 stocks in the TradFi category among major exchanges last week, driving an overall week-on-week increase of 0.7%.

• TradFi Order Book Depth: We selected XAUT, which has the highest TradFi trading volume, to analyze its order book depth (Delta). Between April 20 and 22, the market depth Delta frequently showed large negative values, especially around the 21st, where it approached -$600,000, while the price of XAUT also quickly fell from around $4.78K to below $4.70K, indicating a temporary cooling of gold-related risk aversion sentiment. However, after the 22nd, the order book structure clearly shifted to a bullish bias, with green positive Delta continuously expanding, and one-sided buying depth frequently maintained in the $300,000 to $800,000 range, with peaks approaching $1 million around the 23rd, indicating a significant increase in underlying support funds. Overall, XAUT is currently in a stage of "weak price but improving liquidity support," indicating that despite the Middle East situation not fully dissipating and rising expectations for rate cuts, there is still demand for allocation in gold-related assets, but short-term momentum for chasing prices has clearly weakened compared to the previous peak of risk aversion.

3. On-Chain Data Insights

3.1 Trading Flow Back to Spot and High Turnover Scenarios, Liquidity Further Concentrating at the Top

This week, PancakeSwap's trading volume reached nearly $36 billion, significantly higher than Uniswap's $18.3 billion; Aerodrome, Curve, and Fluid were between $2.5 billion to $3.5 billion. On the Solana side, Raydium and Meteora accounted for about $1 billion, but the number of trades exceeded 100 million, showing characteristics of small-scale high-frequency trading. Trading volume remains high, and on-chain trading demand has not significantly contracted. However, as funds shift from credit-based DeFi to low-fee and high-turnover spot trading scenarios, liquidity is further concentrating at the top pools.

3.2 Stablecoin Funds Concentrate on Settlement-Type Dollars, USDe Sees Nearly $2 Billion Net Outflow in a Week

In the past week, USDT supply rose to $199.959 billion, an increase of $2.418 billion; USDC was $80.391 billion, a decrease of $184 million; UShDS was $8.136 billion, an increase of $340 million; USDe was $4.410 billion, a decrease of $1.997 billion; PYUSD was $2.750 billion, a decrease of $677 million. This week, stablecoin funds overall concentrated on directly settleable and quickly transferable dollar assets, with yield-bearing and synthetic stablecoins showing significant net outflows, among which USDe had a net outflow of nearly $2 billion. Leading stablecoins are strengthening the priority of settlement layers and compliant assets, with Circle and OSL launching a 1:1 USD/USDC conversion and unified margin system, while Tether cooperated with law enforcement to freeze $344 million USDT.

3.3 LST Risks Begin to Price Complex Paths, Leading Protocols Show Slight Declines

Leading LST protocols like Lido, Rocket Pool, Jito, and Jupiter Staked SOL saw small outflows of 2%-5% over the past week. After the rsETH incident, the market has not denied staking yields but is re-pricing the risks of cross-chain and re-staking paths. The scale of leading LST protocols has slightly declined, while high-complexity, yield-enhancing paths have shown more significant pullbacks. Lido, as a representative LST leading protocol, recently proposed to utilize up to 2,500 stETH for rescue, further indicating the broad impact of systemic risk, requiring relevant DeFi protocols to face it collectively.

3.4 Aave Lending Balance Drops Sharply, Funds Escape to Competitors

Aave's total lending balance fell from $17.027 billion the previous week to $12.481 billion, a decrease of $4.546 billion or -26.7%, with Ethereum mainnet dropping from $12.880 billion to $9.671 billion, and Plasma from $1.930 billion to $0.942 billion. The lending balance shows a stepwise decline, triggered by risk events leading to fund withdrawals. After the rsETH incident, Aave froze multi-chain rsETH/wrsETH and restricted new borrowing of WETH, further accelerating position contraction. Most funds have not left the chain but have shifted to Aave's competitor, Spark.

3.5 Liquidity Temporarily Tight, Core Asset Rates in Aave Rise Significantly

Over the past week, the average borrowing rate for USDC in Aave Ethereum V3 rose to 12.50%, up from 6.91%; USDT rose to 13.30%, up from 6.76%; WETH rose to 5.21%, up from 4.00%. The rising rates reflect a contraction in stablecoin liquidity. Due to the ongoing risks from the rsETH security incident, the utilization rate of core assets like USDC in the Ethereum Core market is close to 100%, with some liquidity unable to be extracted, keeping borrowing rates high. The demand for extractable dollar liquidity has significantly increased, and the market has entered a liquidity repair phase. However, with the ongoing joint rescue efforts, asset rates are expected to return to normal ranges in the coming weeks.

3.6 Income Flow Back to Settlement and Volatility Links, Lending Protocols Benefit

Tether and Circle's income remained roughly flat; Hyperliquid and Pump saw weekly declines of over 10%; Aave's income grew by over 40% in a week to nearly $2.9 million amid rate fluctuations. Stablecoin issuance and settlement remain the most stable cash flow sources; trading protocols' income is beginning to diverge, while lending protocols are gaining more income during volatility and position restructuring. Aave's income is rising while lending scale is declining, reflecting shorter positions and faster capital turnover.

4. Derivatives Tracking

4.1 BTC Funding Rate Deeply Negative with Rising OI, Short Squeeze Structure Continues to Strengthen

Over the past week, the BTC perpetual contract funding rate remained in negative territory, with several instances of extreme negative values (lowest near -0.02) from mid to late April, indicating that market short sentiment continues to dominate, and short crowding remains high. Correspondingly, BTC prices have been oscillating upward since early April, peaking around $78K around April 20, showing a typical divergence structure of "deeply negative funding rate but high price," indicating that shorts are continuously paying funding fees while facing upward price pressure.

Meanwhile, open interest (OI) has shown an overall upward trend, rising from about $21 billion to above $25 billion, with some temporary pullbacks but a clear upward central tendency. The continued negative funding rate combined with rising OI means that during the price oscillation and strengthening process, new positions in the market are primarily short, forming a typical "short accumulation + price not falling" divergence structure.

On April 17 and around April 22, OI saw rapid spikes, corresponding to price phase increases and high volatility, while the funding rate remained deeply negative, indicating that shorts did not effectively stop-loss during the price rise but instead continued to accumulate positions. This combination of "negative rate + OI expansion + price strengthening" usually indicates that short squeeze momentum is accumulating, and once prices break through the range, short covering may accelerate the market. However, it is important to note that high OI combined with a high divergence structure also means that market leverage levels are high, and if prices weaken, the deleveraging process may also lead to amplified volatility.

4.2 Options Trading Volume Temporarily Expands, Monthly Contracts Dominate Structure Remains Unchanged

The BTC options market has shown a characteristic of temporary expansion in trading volume, with clear peaks around April 17 and April 23, with daily trading volumes significantly exceeding the weekly average. From a structural perspective, monthly options continue to dominate, consistently accounting for a higher proportion than weekly and daily options, indicating that market participants are primarily focused on mid-term structural layouts, while short-cycle trades exist more as event-driven or short-term hedging tools.

In terms of timing, the points of volume expansion roughly correspond to rapid price fluctuations or phase peaks, reflecting that during price increases, market hedging demand and active trading behavior have simultaneously strengthened. Overall, the options market has not shown significant signs of migrating towards short cycles; the structure still leans towards mid-term allocation; however, the impulsive expansion of trading volume also indicates that in key price ranges, volatility trading and risk management demand have significantly increased, which may exacerbate short-term price volatility.

4.3 Implied Volatility Across All Expiration Dates Overall Rebounds, Term Structure Tends to Converge

In the past week, the implied volatility across all expiration dates for BTC has shown an oscillating upward trend, with 7D, 30D, 60D, and longer-term IV gradually rising from low levels at the beginning of the month, with short-term (7D) volatility being more pronounced, rebounding quickly to around -3 after dipping close to -10. This indicates that the short-term market's pricing of volatility has significantly repaired. Meanwhile, the interest rate differentials between different expiration dates have gradually narrowed, and the term structure shows a certain degree of "flattening" characteristics.

In terms of timing, after mid-April, the IV across all expiration dates has risen simultaneously, indicating that market expectations for future volatility uncertainty have increased, rather than being driven by a single short-term event. Overall, the rebound in implied volatility corroborates the high-level price oscillation, with market divergences intensifying and hedging demand rising. Against the backdrop of converging term structures, the differences in risk premiums between short-term and mid-term have weakened; if directional breakthroughs occur subsequently, IV still has further upward space.

4.4 BTC Volatility Index Stabilizes After Oscillating Downward, Short-Term Volatility Compresses

The BTC Volatility Index (BVOL) has shown an overall oscillating downward trend, experiencing a significant drop in mid-April, and gradually stabilizing in low regions, currently maintaining narrow fluctuations around 41. From the structural perspective, volatility did not amplify during the price increase phase but rather compressed, indicating that the market's pricing for trend continuation is stabilizing, and short-term panic sentiment has significantly eased.

In terms of timing, around April 18, volatility quickly dipped, corresponding to price phase adjustments and subsequent rebounds, indicating that the market has entered a relatively stable phase after experiencing a round of volatility release. Overall, the current state of "high price oscillation + volatility compression" indicates that the market is accumulating conditions for the next phase of directional breakthroughs. Once prices break through the range, volatility is likely to expand again, driving rapid adjustments in derivatives pricing.

5. Outlook for This Week

6. Gate Institutional Dynamic Updates

• Trading Structure Optimization, Outperforming the Industry

￮ Spot trading continues to outperform the market, with a week-on-week growth of 20.09%; contract performance remains stable and better than the industry.

￮ Over 30 new opportunities added in a week, with pipeline expansion accelerating.

• CrossEx Trading Volume and Capital Continues to Hit Historical Highs

￮ Several leading institutions have initiated cross-exchange arbitrage, hedging, and cross-exchange strategies.

￮ CrossEx trading volume and capital scale continue to hit historical highs, with trading volume increasing by 79% week-on-week and capital scale increasing by 816%.

• Gate Trading System Technology Continues to Upgrade, 3.0 Architecture Launching Soon

￮ 3.0 architecture deployment preparations are complete, expected to begin customer testing in May.

￮ SBE + real-time BBO have been launched, significantly improving data and matching efficiency.

￮ Continuous optimization of latency and API capabilities, enhancing high-frequency trading experience.

• TradFi and Institutional Infrastructure Continues to Improve

￮ Bank and compliance channels continue to expand, accelerating institutional capital access.

￮ TradFi order management and API systems continue to improve.

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-tradfi#weekly-volume

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

• Bybit, https://www.bybit.com/future-activity/en/tradfi

• Bitget, https://www.bitgettradfi.com/tradfi/XAUUSD

• 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, and 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.