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Bitget Research: German Government Wallet Continues to Sell Off, Crypto Market Faces Liquidity Crisis and Drops Across the Board

John & Victoria
2024/07/05
Bitget Research: German Government Wallet Continues to Sell Off, Crypto Market Faces Liquidity Crisis and Drops Across the Board
In the past 24 hours, many new popular tokens and topics have emerged in the market, which are likely to be the next wealth creation opportunities.

Overview

Bitcoin (BTC) plummeted below $56,000 during the early morning hours, with a 24-hour decline expanding to nearly 5.8%, marking the lowest price since early May. The market is now pessimistic with poor liquidity due to various sell-offs. The highlights are as follows:
  • Sectors with strong wealth creation effect: Ethereum ecosystem and AI sector.
  • Top searched tokens and topics: Unisat, Hamster, and Tapswap.
  • Potential airdrop opportunities: Magic Eden Wallet and Movement.
Data collection time: July 5, 2024, 4:00 AM (UTC)

1. Market Environment

Bitcoin (BTC) plummeted below $56,000 during the early morning hours, with a 24-hour decline expanding to nearly 5.8%, marking the lowest price since early May. During this sell-off, the bankrupt cryptocurrency exchange Mt. Gox's wallet showed activity for the first time in a month. Additionally, the German government transferred over $75 million to cryptocurrency exchanges, with these funds being moved to Kraken and Coinbase, indicating a clear intent to sell.
The compounded sell-off information has resulted in a pessimistic market with poor liquidity, and it is advised for investors to adopt a wait-and-see approach in the near term.

2. Wealth Creation Sectors

2.1 Sectors to Focus on Next — ETH Ecosystem

Primary reasons:
  • The planned listing of the spot Ethereum ETF on July 4 did not materialize, leading to a decline in some tokens within the Ethereum ecosystem. However, there remains a chance for the ETF to launch in mid-July, presenting a potential rebound opportunity for these tokens due to an oversold bounce.
  • James Seyffart, a Bloomberg ETF analyst, mentioned in a social media post that the asset management company Bitwise has submitted a revised S-1 form for their spot Ethereum ETF, a few days ahead of the July 8 deadline. He also mentioned that they expect other issuers to submit more revised S-1 forms this week, and that these products could likely hit the market later next week or during the week of the 15th.
Factors affecting future market conditions:
Two core factors will primarily influence the token prices of Ethereum ecosystem projects: 1. Whether the spot Ethereum ETF can be listed soon; 2. The regulatory stance of the U.S. SEC on certain projects. If the spot Ethereum ETF is approved and begins trading by mid-July, it would be significantly beneficial for all projects within the Ethereum ecosystem; otherwise, unmet expectations may lead to market sell-offs.

2.2 Sectors to Focus on Next — AI Sector

Primary reasons:
  • Recently launched AI infrastructure projects like IO and ATH have garnered widespread attention. These projects, serving as platforms, can generate stable cash flows. Additionally, the AI narrative, being at the core of global technology discourse, continually enhances the valuation of AI projects in the crypto industry.
  • Due to the recent market downturn, tokens within the AI sector have experienced significant pullbacks, with short-term market sentiment leading to overselling. A rebound in market conditions is expected to bring a strong recovery in value.
Factors affecting future market conditions:
  • AI narrative: Projects like IO and ATH are AI computational power supply platforms, classified as infrastructure projects. If these projects can establish partnerships with mainstream technology companies, such as with Apple, Microsoft, or Nvidia, the valuation of their tokens could naturally increase.
  • Core data on ecosystem development: For platform-type projects, cash flow is relatively transparent. If the demand for the platforms continue to develop healthily and produce stable cash flows, the valuation of their tokens will enter a positive cycle.

3. Top Searches

3.1 Popular DApps

UniSat
UniSat announced that it had completed a pre-A funding round led by Binance in May of this year. The exact amount of the funding has not been disclosed. Unisat stated that this strategic investment strengthens the existing technical and business partnership between the two parties, laying a solid foundation for further collaboration in the future. Previously, Inception Capital announced its participation in the UniSat Pre-A funding round in May.

3.2 X (former Twitter)

Hamster:
Hamster Kombat is a clicker game on Telegram, where players can earn tokens by tapping and through other methods of interaction. Players take on the role of a cryptocurrency exchange CEO, and by tapping, they earn tokens which can be used to enhance their exchange and upgrade their hourly earnings. Future token airdrop rewards are possible, and players can also boost their earnings by subscribing to Telegram channels or inviting friends. It currently has over 200 million users, and it is the third-fastest app in history to reach 150 million users.

3.3 Google Search (Global and Regional)

Global focus:
Tapswap:
Since the beginning of 2024, various tap-to-earn games on Telegram have sparked a craze in the community. Launched on February 15, 2024, TapSwap allows users to earn in-game tokens by tapping and completing tasks. The app now boasts over 50 million users globally, with nearly one million active online users.
Regional focus:
(1) Asia: The phrases "why crypto is down today" and "greed and fear index" are trending in several parts of Asia, indicating that investors are highly concerned about the reasons behind the market downturn.
(2) Europe and the Americas: There are no significant trends. The tokens and terms on the top trending lists vary from country to country. For example, Italian traders are following TAO, NOT, and SOL, while German users are focusing on SOL and LDO, and UK users are interested in ETH and TAO.

4. Potential Airdrop Opportunities

Magic Eden Wallet
Magic Eden is a renowned NFT marketplace backed by major VCs such as Coinbase, Paradigm, and Solana. Magic Eden announced on the X platform that a token claim feature within its wallet will launch later in the third quarter.
The Magic Eden Wallet is its mobile app, which allows users to earn "Diamond" points by trading NFTs, among other methods. Magic Eden plans to release a test link for the Magic Eden Mobile Wallet via its official X account soon, which could potentially offer a way to receive airdrops.
How to participate: 1. Follow Magic Eden Wallet's X account (https://x.com/MagicEdenWallet) and set up a reminder for posts; 2. When the account posts the invitation link, quickly access and test the app, since each release has only a few thousand spots available.
Movement
Movement Labs is a blockchain development team founded in 2022, which secured $3.4 million in seed round funding in September 2023. In addition to its flagship product, Movement L2, Movement Labs will also launch Move Stack—an execution-layer framework compatible with rollup frameworks including Optimism, Polygon, and Arbitrum.
Recently, Movement Labs raised $38 million in a Series A funding round led by Polychain Capital, with participation from Hack VC, Foresight Ventures, Placeholder, and other prominent institutions.
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