Analysis of Future Development Trends and Investment Opportunities in the Crypto Market

Recently, positive signals have emerged in the traditional financial market, and the crypto market is also experiencing a phase of recovery. In July, the US CPI data was lower than expected, indicating a relief in inflationary pressures. From the perspective of wealth destruction, this year's bear market in the encryption market has been more severe than at any time in history, but this also means that large-scale sell-offs are unlikely to occur again in the short term.

Macroeconomic Analysis

The correlation between cryptocurrency and traditional financial markets has reached a record high. Risk appetite is gradually returning, and there are signs of a rebound in the crypto market. It is expected that the market will experience sideways fluctuations for a period of time, especially with Bitcoin potentially rebounding slowly.

Recently, after a rebound, the market has shown obvious differentiation. Altcoins have performed poorly, while Bitcoin and Ethereum are doing better. This situation where Bitcoin and Ethereum lead the decline but ultimately it is mainly the altcoins that suffer heavy losses is relatively rare.

The next 4-5 weeks are an important time window; the market may drop first and then rise, digesting risks such as the Ethereum merger and the Federal Reserve's interest rate decision in advance. If economic data continues to improve, the extent of the pullback may be relatively small.

Ethereum Analysis

Ethereum has recently led the crypto market, significantly outperforming other large-cap coins. Layer 2-related tokens are more worthy of attention. Ethereum is the main asset that big players are betting on during the merge, with a narrative that surpasses Bitcoin.

From a technical perspective, Ethereum below $1800 is worth buying. Caution is required if it breaks the support level at $1650. If it holds that level, reaching $2000 during the merger is almost certain.

Other Asset Analysis

DOGE and SHIBA INU: Indicators that can be used to assess retail investor entry. Recent performance has been outstanding, which may indicate that a new round of market activity is about to arrive.

Solana: performed excellently last year, but experienced multiple outages. The latest upgrade will help improve network performance. $48.5 is an important breakout level.

Chilliz: A leader in the sports entertainment financial technology field, collaborating with many well-known clubs. The public chain Chilliz 2.0 is set to launch soon. It has currently broken through the downtrend line.

XMON: Related to Sudoswap, this platform is a decentralized AMM in the NFT space, experiencing rapid growth.

Investment Strategy

• It is unlikely that new lows will occur before the Ethereum merge, consider going long.
• Bitcoin lacks short-term positive factors, and can be used to hedge risks
• Pay attention to Dogecoin, on-chain options, MEME coins, and other high-risk assets
• Focus on: ETH, SOL, SHIB, DOGE, CHZ
• Observation: tokens related to mergers such as SNX, LINK, LDO

Future Outlook

The market is focusing on the Ethereum merger. There is still uncertainty in the macro environment, and close attention needs to be paid to economic data and Federal Reserve policies. Future hotspots may include:

• Sol 2.0 and Localized Fee Market
• L2 Upgrade: Arbitrum Nitro, Optimism Bedrock
• Privacy DeFi: Aztec, Secret Network, etc.
• NFT AMM:sudoSwap
• Cross-chain security and interoperability
• On-chain options
• zkEVM: Scroll, zkSync, etc.
• New Public Chains: Aptos, Sui
• Cross-chain communication: CCIP, StarGate, etc.
• Modular Execution: Celestia, FuelVM
• Blockchain games: Aurory, Illuvium, etc.

There will still be opportunities in the coming month, the key lies in grasping emerging narratives and hot tracks.