Original Title: "Stablecoin Project Ethena Shows Strong Growth, Fed's Hawkish Stance Triggers Market Caution | Frontier Lab Crypto Market Weekly Report"

Original Source: Frontier Lab

Market Overview

Market Summary

This week, the cryptocurrency market exhibited a downward trend, with BTC showing a decline while ETH relatively displayed a strong breakout from the oscillating uptrend. Most altcoins followed BTC in the downward trend. The market sentiment index dropped significantly from 59% last week to 27.81% this week, entering the overall bearish territory.

Stablecoin Market Dynamics

The total market value of stablecoins continued to grow, but the growth rate significantly weakened, showing an increase in USDT and a decrease in USDC:

· USDT: With a market value of $163.8 billion, a weekly growth rate of 0.74%, USDT continued its rapid upward trend. Although the weekly incremental funding decreased compared to last week, it still remains above $1 billion, indicating a slight decrease in the intensity of this week's capital inflow.

· USDC: With a market value of $64 billion, a weekly decrease of 1.68%, USDC ended its three-week uptrend and began a downtrend, with a significant drop of $1.1 billion.

This phenomenon deserves investors' attention: USDT's consistent weekly growth of over $1 billion for the past five weeks indicates that institutional funds, mainly from non-US users, are still increasing their entry positions. On the other hand, USDC's significant decline reflects that US investors have ended their recent FOMO sentiment and taken risk-averse actions due to less optimistic macroeconomic data. This signal needs to be continuously monitored.

Market Driving Factors Analysis

· Strong Economic Data Impact: On Wednesday, ADP employment numbers and GDP data grew higher than expected, indicating the continued strength of the US economy, which is not favorable for the Fed's interest rate cut decision.

· Fed's Hawkish Stance: Powell's hawkish remarks after the interest rate meeting caused the market's September rate cut expectations to drop to 50%, and the October rate cut expectations were abandoned.

· Persistent Inflation Pressure: The June core PCE price index remained at 2.58%, higher than the expected 2.7%, showing no downward trend, further affecting the rate cut expectations.

· Earnings Below Expectations: Coinbase's second-quarter earnings report, released after Thursday's close, fell short of the market's expectations, leading to a crypto downturn.

· Institutional Demand Support: ETH whales and publicly traded companies continued to purchase ETH, helping to stabilize market prices and sentiment to some extent.

International Trade and Political Factors

· Trade Relations Eased: The U.S. reached a decision with China to further postpone tariffs for 90 days and also reached a tariff agreement with the EU, positively impacting market sentiment.

Next Week's Key Event Predictions

· Lack of Macro Data: With no significant macroeconomic data releases next week, the market focus will shift to institutional buying pressure.

· Institutional Buying Pressure: Continued monitoring of BTC and ETH purchases by publicly traded companies and ETFs is advised, as a weakening of buying pressure may lead to a market pullback.

Investment Strategy Recommendations

· Maintain a Cautious Stance: In the current market environment, investors should remain cautious.

· Guard Against "Black Swans": Be prepared to respond to potential risk events.

· Monitor Institutional Trends: Keep a close eye on large institutions' buying behavior regarding BTC and ETH, as this serves as a key indicator of market direction.

Market Outlook

Against the backdrop of a hawkish Fed stance and stubborn inflation, the crypto market may continue to experience volatility in the short term. The Fed's cautious approach to its rate-cut timeline will be a core factor influencing the market in the coming months, especially as the probability of a September rate cut has decreased from certainty to 50%, significantly dampening market risk appetite. However, Coinbase's earnings report dealt a fatal blow to the market. The next crucial support for market stability will be institutional fund flows. Currently, the continued buying behavior of ETH whales and publicly traded companies has provided some cushion to the market. Still, if this trend weakens, it could trigger a larger-scale pullback. Particularly, with a demand for adjustments already evident in the technical aspect, a reduction in institutional buying pressure may accelerate downside pressure.

The easing of international trade relations is one of the few positive factors at present. The temporary suspension of U.S.-China trade tariffs and progress in the U.S.-EU tariff agreement help improve the global economic outlook and indirectly support risk assets. However, whether this positive factor can offset the negative impact of the hawkish Fed stance remains to be seen.

Overall, the market may be entering a consolidation phase, awaiting clearer monetary policy signals. Investors should be prepared for medium to long-term holdings while maintaining sufficient liquidity to handle potential volatility. In the absence of significant catalysts, the market may need more time to digest previous gains, building momentum for the next phase of the trend.

Next Week Forecast Targets

Bearish Targets: ATA, MOVE

ATA: Privacy Track Marginalized Project Faces Unlocking Pressure and Fundamental Challenges

· Project Fundamentals and Positioning

Automata Network is a decentralized platform focused on providing privacy protection and cross-chain integration in the blockchain and Web3 space. Through its decentralized middleware protocol, it offers infrastructure for building Web3 applications, with a strong emphasis on privacy and security. It aims to address key issues such as blockchain privacy, security, and interoperability.

· Industry Ecology and Market Position Continuously Weakened

Marginalization in the Privacy Track Market: Automata Network's position in the privacy track is a niche area within the crypto market, consistently at the market's edge, failing to attract mainstream market attention and funding.

· Insufficient Ecological Integration: Despite the application value of privacy technology in the Web3 space, Automata Network has not effectively integrated with mainstream public chains and DeFi ecosystems, limiting its use cases and user base.

· Severe Deterioration in Fundamental Data

Near-Stagnant On-chain Activity: On-chain data shows that Automata Network generates only about 20 attestations per day, a key indicator reflecting platform usage, indicating almost no active users on-chain.

Automata Network's Daily Attestation Generation Count (Source: https://dune.com/automata_network/attestation-dashboard)

· Drastic Decline in Fund Inflows: On-chain ETH deposit data reveals that Automata Network receives less than 1 ETH in daily deposits, reflecting investor confidence in the project plummeting.

Automata Network Daily Deposit Count (Source: https://dune.com/automata_network/attestation-dashboard)

· Cross-chain Application Adoption Dismal: Across all supported chains, Automata Network's cross-chain interoperability feature sees only 68 transactions daily, indicating the project's real-world use case and user base have nearly disappeared within the broader crypto ecosystem.

Automata Network Daily Cross-chain Data (Source: https://dune.com/automata_network/attestation-dashboard)

· Token Unlocking Risk Assessment

- Unfavorable Scale and Timing of Unlocking: On August 6, 25.22 million ATA tokens, representing 2.52% of the total locked amount, are set to unlock during a crucial deterioration of the project's fundamentals.

- Severe Market Illiquidity: ATA token's average daily trading volume is only around $700,000, indicating a significant lack of market liquidity to effectively absorb the upcoming unlocked tokens, leading to considerable selling pressure.

ATA Token Average Daily Trading Volume (Source: https://www.coingecko.com/en/coins/automata)

- Strong Motivation for Unlocking Entities to Sell: Analysis based on the linear unlocking schedule indicates that this unlocking primarily involves investment firms and the project team. Given the project's current clear downward trend, these holders have a strong incentive to cash out and are highly likely to choose to sell and exit.

- Weak Liquidity Depth: The relatively small daily trading volume reflects inadequate market depth, unable to effectively cushion the price impact from the token unlocking.

Summary

Automata Network faces multiple systemic risks: at the market level, the privacy sector's overall appeal is limited, as the project has failed to establish a leading position in this niche field; at the operational level, on-chain activity is nearly stagnant, user engagement is extremely low, and capital inflows are negligible; at the capital level, the upcoming unlock of 25.22 million ATA tokens on August 6 in a thinly traded market with only $700,000 in daily volume will create significant selling pressure. Furthermore, the unlocking entities are investment firms and team members with a strong cash-out motivation. The overlapping multiple bearish factors exert continual downward pressure on the ATA token price, making it difficult to reverse the downward trend in the short term.

MOVE: Move Language L2 Project Faces Dual Crisis of Fundamental Collapse and Unlocking Pressure

· Project Fundamentals and Positioning

Movement is an Ethereum L2 based on the Move scripting language, aiming to bring the security and performance of the Move language into various blockchain ecosystems, including Ethereum. It seeks to enhance Ethereum's network by building an L2 solution to increase transaction speed and efficiency, while addressing scalability, interoperability, and security vulnerabilities.

· Deteriorating Market Environment

-L2 Track Value Proposition Questioned: Over the past year, the L2 track has been widely criticized in the market for not only failing to bring the expected prosperity to Ethereum but also causing fragmentation of the Ethereum ecosystem. As a project in this track, Movement has similarly been negatively affected.

-Overall Lack of Wealth Effect in the Track: L2 ecosystem projects have failed to generate significant wealth effects in the recent market cycle, resulting in diminished investor interest. Movement has not received adequate market attention and funding injection.

-Unfavorable Market Competitive Landscape: In the crowded L2 track, Movement has failed to establish a clear differentiation advantage. Pressured by leading L2 projects such as Arbitrum and Optimism, its market share continues to shrink, lacking the momentum for ecosystem development.

· Severe Deterioration in Fundamental Data

-TVL Plummets: Movement's TVL has plummeted from a historic high of $166 million to $81.5 million, a significant 50.91% decline, clearly reflecting users' massive exodus from the Movement ecosystem.

Movement's TVL (Source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=false&tvl=true&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)

-Stablecoin Market Cap Continues to Shrink: The on-chain stablecoin market cap has dropped from $34.98 million to $30.8 million in the past month, a decrease of 11.95%, indicating that funds are continuously flowing out of the Movement ecosystem, eroding market confidence.

On-chain Stablecoin Market Cap of Movement (Data Source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)

Near Stagnation of On-chain Activity: On-chain fee data shows that Movement's daily transaction fees are only between $10-20, indicating an extremely low level that directly reflects very little on-chain activity on Movement.

Movement Daily Fees Revenue (Data Source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)

-Continued Decline in DEX Trading Volume: On-chain DEX trading volume continues to show a downward trend, currently only maintaining at $4.66 million per day, indicating a continuous decrease in on-chain trading activity.

Movement On-chain DEX Trading Volume (Data Source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)

- Ecosystem Project Revenue Struggling: The total daily revenue of all on-chain application projects in the Movement ecosystem is only around $2,000 and continuously decreasing, indicating the ecosystem is on the brink of decline.

Movement On-chain All App Revenue per Day (Source: https://defillama.com/chain/movement?currency=USD&stablecoinsMcap=true&tvl=false&chainFees=false&groupBy=daily&chainRevenue=false&dexsVolume=false&appRevenue=false)

- New User Growth Completely Stagnant: On-chain data shows that Movement has seen no new user onboarding recently, indicating market interest in the project has plummeted, with user growth coming to a complete standstill.

Movement On-chain New Users (Source: https://dune.com/ethenelabs/movement-cornucopia)

· Token Unlock Risk Assessment

- Unfavorable Unlock Scale and Timing: On August 8th, 50 million MOVE tokens will unlock, accounting for 1.5% of the total locked amount, at a critical point of ongoing deterioration in the project's fundamentals.

- Severe Lack of Market Absorption Capacity: The average daily trading volume of MOVE token is only around $2.9 million, indicating market liquidity is significantly insufficient to effectively absorb the upcoming unlocked tokens, creating significant selling pressure.

MOVE Token Daily Trading Volume (Source: https://www.coingecko.com/en/coins/movement)

· Strong Incentive for Unlock Recipients to Sell: According to linear unlock plan analysis, this unlocking primarily involves investment institutions and the project team. Given the project's current evident downtrend, these holders have a strong incentive to cash out and are highly likely to choose to sell and exit.

· Weak Liquidity Depth: The relatively small daily trading volume reflects insufficient market depth, unable to effectively cushion the price impact of token unlocks.

Summary

The Movement project faces multiple systemic risks: at the market level, the L2 track is overall questionable, failing to bring the expected value to Ethereum, with a lack of wealth effect; at the business level, TVL has plummeted by 50.91%, stablecoin market cap has shrunk by 11.95%, on-chain fees are only $10-20 per day, DEX trading volume continues to decline, ecosystem revenue is only $2000 per day, and new user growth has completely stalled; at the capital level, the upcoming unlock of 50 million MOVE tokens on August 8 will create significant selling pressure in a weak liquidity market with only $2.9 million in average daily trading volume, and the unlocking parties are investment institutions and the team with a strong incentive to cash out. With multiple bearish factors piling up, MOVE token price faces sustained negative pressure and is unlikely to reverse its downward trend in the short term.

Next Week Token Unlock Schedule (Amount Exceeding $1 Million)

Market Sentiment Index Analysis

TOTAL3 Data (Source: https://www.tradingview.com/chart/xUGZrDd8/?symbol=CRYPTOCAP%3ATOTAL3)

The market sentiment index has dropped from 87% to 59%, with BTC down 2.72% this week, ETH up 1.36% this week, TOTAL3 down 2.21% this week, and the overall Altcoin market entering the bearish zone.

Top Project of the Week

Ethena Ecosystem Analysis: USDe Market Share Expansion and Stable Growth in the Stablecoin Sector

Recently, with the passing of the U.S. "GENIUS Act," it has driven market enthusiasm for stablecoin projects, shifting market attention to stablecoin projects. While most of the market has been in a range-bound state this week, with most meme projects in a oscillating downtrend, Ethena has shown strong upward momentum compared to other Altcoins, attracting widespread market attention.

Recent Performance of ENA Token (Data Source: https://www.coingecko.com/en/coins/ethena)

On-Chain Data Analysis

TVL

TVL of Ethena (Data Source: https://defillama.com/protocol/ethena?tvl=true)

Due to the recent rapid price increase of ETH, we have calculated TVL in ETH terms, showing a significant recent surge in Ethena's TVL from a short-term low of 1.65 million ETH to 2.19 million ETH, a 30.91% increase. In USD terms, it has surpassed the $8 billion mark, reaching an all-time high, demonstrating the project's strong attractiveness.

Fees

Fees of Ethena (Data Source: https://defillama.com/protocol/ethena?tvl=false&fees=true&groupBy=weekly)

As shown in the chart above, Ethena's Fees have been increasing on a weekly basis, especially with a more noticeable growth in recent weeks, reaching a recent high of $19.68 million, indicating that Ethena's user base is continuously expanding, and platform activity is steadily increasing.

On-Chain Fund Flow

On-Chain Fund Flow of Ethena (Data Source: https://defillama.com/protocol/ethena?tvl=false&usdInflows=true)

From the chart above, it can be seen that Ethena's on-chain funds have been maintaining a state of large-scale inflow recently, with an average daily inflow of over $300 million, indicating that the market's confidence in USDe continues to strengthen and investors are optimistic about its prospects.

USDe Supply

USDe Supply (Data Source: https://dune.com/hashed_official/ethena)

From the chart above, it can be seen that USDe's supply has recently experienced a rapid surge, reaching a scale of $7.839 billion, hitting a historic high with a growth rate of 47.93% in the past month, reflecting a significant increase in market demand for USDe.

Comparison of Major Decentralized Stablecoins

Comparison of Major Decentralized Stablecoins (Data Source: https://dune.com/stablescarab/defi-savings-rate)

Comparison of Major Decentralized Stablecoins (Data Source: https://dune.com/stablescarab/defi-savings-rate)

From the data in the chart, it can be seen that sUSDe's APY has slightly decreased recently to 10.24%, but its APY still remains at the forefront of yields among major decentralized stablecoin projects. Additionally, its scale is the largest among all mainstream decentralized stablecoin types, reaching $50.12 billion.

sUSDe Weight

sUSDe Weight (Data Source: https://dune.com/hildobby/ethena)

From the above chart, we can see that the market share of sUSDe has exceeded that of USDe, reaching 53.4%. This indicates that most users are utilizing USDe to earn stablecoin rewards, and the majority of on-chain transaction users are not.

USDe Transaction Volume and Buyer Count

USDe Transaction Volume and Buyer Count (Data Source: https://dune.com/entropy_advisors/ethena-usde)

From the above chart, we can see that USDe's transaction volume has significantly increased in the past month, reaching a scale of $1.79 billion, second only to November 2024. Additionally, the number of purchasing users has also seen a noticeable increase, reaching 16,016 individuals, indicating a continuous influx of new funds and users in the recent period.

USDe Volatility

USDe Volatility (Data Source: https://dune.com/entropy_advisors/ethena-usde)

From the chart, we can observe that USDe's volatility has remained remarkably stable without any significant decoupling events, demonstrating excellent stability. This is a core competitive advantage of the stablecoin project.

Summary

Ethena and its stablecoin USDe have shown outstanding performance and strong growth potential in the current cryptocurrency market. With the favorable policy environment of the U.S. "GENIUS Act," Ethena has successfully seized the opportunity presented by the market's increasing demand for stablecoins, achieving comprehensive increases in TVL, transaction volume, and user count. The $8 billion TVL, $7.8 billion supply, and ongoing large-scale fund inflows collectively form the foundation for Ethena's robust development. The sUSDe's over 53% share reflects user recognition of its reward model, while the leading 10.24% APY continues to attract yield-seeking investors. Moreover, USDe's outstanding price stability has earned market trust, establishing it as a core competitive advantage.

As the importance of stablecoins in the crypto ecosystem continues to rise, Ethena is poised to further expand its market share, solidifying its leading position in the decentralized stablecoin field. However, the project also needs to be wary of potential risk factors such as regulatory environment changes, intensified market competition, etc., and continuously optimize its products and services to sustain long-term growth.

Market Theme Overview

Data Source: SoSoValue

Based on weekly return rate statistics, the SocialFi track performed the best, while the AI track performed the worst.

· SocialFi Track: In the SocialFi track, TON and CHZ have a relatively large share, totaling 96.05%. Their weekly price changes were 11.83% and -7.96%, respectively. Due to TON's significant share in the SocialFi track, accounting for 91.93%, TON's rise drove SocialFi's performance better than other tracks, making the SocialFi track perform the best.

· AI Track: In the AI track, TAO, RENDER, WLD, and FET hold a relatively large share, totaling 75.61%. Their weekly price changes were -15.16%, -9.36%, -12.78%, and -7.63%, respectively. It can be seen that projects with heavier weight performed lower than projects in other tracks, thus making the AI track perform the worst.

Next Week's Crypto Key Events

· Monday (August 4th) Solana Mobile's second phone Seeker begins shipping

· Tuesday (August 5th) 2025 Blockchain Science Conference

· Thursday (August 7th) U.S. Initial Jobless Claims figures for the week ending August 2nd

Summary

This week, the cryptocurrency market showed a downward trend, with ETH fluctuating, while Bitcoin and most altcoins exhibited a volatile downtrend. The market sentiment index dropped from 59% to 27.81%, entering the bearish zone. The stablecoin market growth slowed down, with USDT market cap reaching $163.8 billion, a weekly increase of 0.74%; USDC market cap at $64 billion, a weekly decrease of 1.68%, ending a three-week uptrend. The market was influenced by multiple factors: better-than-expected U.S. employment and GDP data, hawkish remarks from Fed Chair Powell leading to a 50% reduction in rate cut expectations for September, the core PCE price index remaining at 2.58% without a downward trend, and Coinbase's earnings report falling short of expectations, causing an overall market decline. On the positive side, the U.S. and China reached a 90-day tariff truce decision, as well as a tariff agreement with the EU; ETH whales and public companies' continued purchases to some extent stabilized market sentiment.

This week, the Ethena ecosystem has shown remarkable performance, seizing the opportunity presented by the market's increasing demand for stablecoins. The supply of USDe surged to $7.839 billion, reaching a historic high and experiencing a growth of 47.93% in the past month, far surpassing other stablecoin projects. In terms of TVL, Ethena has surpassed $8 billion, calculated in ETH from a recent low of 1.65 million ETH to 2.19 million ETH, representing a 30.91% growth. On-chain fund flow data shows that Ethena maintains a daily inflow of over $300 million, reflecting the market's continued confidence in USDe. Notably, the sUSDe proportion has reached 53.4%, exceeding USDe itself, indicating that most users hold USDe mainly to earn stablecoin rewards. Although its 10.24% APY has slightly decreased, it still leads among major decentralized stablecoins. The USDe trading volume has reached $1.79 billion in recent months, with the number of purchasing users increasing to 16,016, while maintaining excellent price stability without significant decoupling, consolidating its leading position in the decentralized stablecoin field.

In the short term, the cryptocurrency market may continue to experience consolidation and volatility as the Federal Reserve's cautious approach to interest rate cuts remains a core influencing factor. Institutional fund flows are a key pillar of market stability, and currently, continued purchases by ETH whales and publicly traded companies provide a buffer to the market. However, if this trend weakens, it could trigger a larger-scale pullback. A de-escalation of international trade relations is a positive factor, but whether it can offset the negative impact of the Fed's hawkish stance remains to be seen. Investors should prepare for medium to long-term holdings while maintaining sufficient liquidity to withstand fluctuations. In the absence of significant catalysts, the market needs more time to digest previous gains and build momentum for the next phase of the market trend. Overall, investors should maintain a cautious stance, guard against "black swan" events, and closely monitor institutional buying behavior of BTC and ETH as a key indicator of market direction.

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