Macro Research: As expectations of U.S. rate cuts continue to weaken, which crypto sectors have the opportunity to outpe

Over the past week, the market has continued to adjust deeply. Has the opportunity to buy at the bottom appeared? Recently, the Congressional Budget Office of the United States has significantly raised its deficit forecast, which reflects the intention of fiscal policy to support the economy. It is expected that the restart of fiscal efforts will further support market liquidity and the real economy, and the urgency and magnitude of interest rate cuts may be weakened. Affected by the performance of US stocks, Bitcoin rebounded after falling below $60,000 this week, while the performance of altcoins continued to be weaker than that of value coins.

Macro environment

Recently, US consumption and real estate data have been weak. Although the non-farm data in May was higher than Bloombergs expectations (the same below), the broad employment data showed signs of further weakening. Corporate investment continued its recent improvement trend. Overall, the growth momentum of the United States has cooled down, but it still maintains a certain degree of resilience.

The Congressional Budget Office (CBO) released new budget estimates. The deficit increased by $408 billion from the February estimate, and the corresponding deficit ratio increased from 5.6% to 7%, which is much higher than the market median expectation of 5.8%. CBO expects the deficit to reach $1.9 trillion in fiscal 2024, which is roughly the same as the $1.86 trillion figure announced by the White House Office (OMB). The restart of fiscal efforts will further support market liquidity and the real economy, and the urgency and magnitude of interest rate cuts may weaken, which greatly affects the situation in the market.

Affected by the Mentougou sell-off, the price of Bitcoin (BTC) continued to be under pressure this week, with altcoins falling even more. The continued rise of the US dollar index put Bitcoin at risk of falling. The Bitcoin panic index also continued to fall from 70 and entered the fear range from greed.

The Chicago Volatility Index (VIX) rose first and then fell. Since long-term high interest rates may bring greater financial turmoil, we need to pay close attention to the possible amplification of volatility in the future.

High-quality track

1) Curve

Reasons to pay attention:

Curve still holds the best position for large-scale stablecoin transactions, and generates a steady stream of profits for the project. However, the narrative is too old, and there are no new products or operations that excite the market, which leaves the project with insufficient imagination and prospects. After the liquidation, the market continues to be pessimistic about its development.

Reasons for bottom-fishing:

On the one hand, many whales bought CRV at a price higher than $0.3, and the current price is in an absolutely reasonable range. On the other hand, Curves profitability has not been damaged and it will continue to generate cash flow.

2) Ethereum blue chip projects

Market catalysts:

The ETH spot ETF is expected to be approved by the SEC on July 4. This news has a significant need to repair the market sentiment. The approval of the ETH spot ETF means that more institutional investors can enter the market more conveniently, which is expected to push up the price of the currency.

ETH-related blue-chip assets will be able to achieve a greater winning rate. Blue-chip assets usually have higher market value and stronger market trust. Therefore, when market sentiment improves, such assets tend to rebound faster and achieve higher returns.

Specific currency list:

ENS: ENS is a distributed, open and scalable naming system based on Ethereum, which is extremely popular in Europe and the United States. ENS is planning a Layer 2 network, which may push its price to a higher level.

Ethena (ENA): Ethena is a decentralized finance (DeFi) platform. Ethena is expected to have a second round of airdrops, which will continue to attract capital inflows.

User attention

1) Popular Tokens on Twitter

• $BLAST

BLAST is an Ethereum L2 network built by the Blur team. The ETH that users bridge to BLAST will automatically compound, and the income comes from Ethereum staking and RWA protocol, with an annualized rate of return of 4% and 5% respectively. BLAST has a tiered invitation reward model, and depositing more than 20 ETH can unlock a permanent invitation link. BLAST provides Dapps with a business model for automatic appreciation of cross-chain assets and returns gas fee income to developers. BLAST will issue airdrops to users next week. In the future, the project will transfer control of the Blast Twitter account, Blast website, and Blast protocol governance from Arcade Research (the developer of Blast) to the Blast Foundation.

BLAST is expected to become an indispensable DeFi hub. After the airdrop, Blast (BLAST) surged 40%, outperforming other high-profile airdrops listed in recent weeks. Most of the market believes that the valuation of this airdrop is lower than their expectations.

• $IO

IO (io.net) is the native cryptocurrency and protocol token of io.net. io.net is building an enterprise-grade decentralized computing network that allows machine learning engineers to access distributed cloud clusters at a fraction of the cost of centralized services. This decentralized GPU network aims to provide unlimited computing power for machine learning applications, making computing more scalable, accessible, and efficient. io.nets mission is to provide fair access to computing power by assembling more than 1 million GPUs from independent data centers, crypto miners, and other crypto projects such as Filecoin or Render.

IO was launched on June 11, with the lowest opening price being $0.06. The next day, IO successfully set a new all-time high of $6.5, and is currently showing a bottoming trend.

2) Popular DApps

Particle Network is a full-stack, data-driven, composable Web3 data and development platform designed to accelerate the transition of the traditional world to Web3.0. Its key features include: using a powerful SDK to help developers quickly build applications; the core module zkWaaS provides Wallet-as-a-Service services based on zero-knowledge proof, supporting basic AA scenarios and Web2-style OAuth privacy login and privacy transactions through account abstraction; solutions such as Chain Abstraction simplify the interaction between different blockchains, allowing a single address to manage general accounts; high-speed transactions support Optimism, Sepolia and other protocols to ensure fast and efficient transactions; BTC Connect integrates with the Bitcoin network to expand the functionality and coverage of the ecosystem. The future of Web3 will be a full-chain future, and projects like Particle Network are paving the way for a truly unified user-friendly experience.

This article is sourced from the internet: Macro Research: As expectations of U.S. rate cuts continue to weaken, which crypto sectors have the opportunity to outperform the market?

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