Macro research: The expectation of interest rate cut in the United States continues to weaken, what encryption zone has the opportunity to outperform the market?

Over the past week, the market has continued to undergo a deep adjustment. Has the opportunity to buy the dip already appeared? Recently, the U.S. Congressional Budget Office significantly raised its deficit expectations, reflecting the intention of fiscal policy to support the economy. It is expected that the resumption of fiscal strength will further support market liquidity and the real economy, and the urgency and extent of interest rate cuts may diminish. Dragged down by the trend of US stocks, Bitcoin rebounded after falling below $60,000 this week, while the trend of altcoins continued to be weaker than that of value coins.

Macro Environment

Recently, U.S. consumer and real estate data has been weak. Although non-farm payrolls in May were higher than Bloomberg’s expectations (the same below), there were further signs of weakening in overall employment data. Corporate investment has continued the recent trend of improvement. Overall, the growth momentum in the United States has cooled somewhat, but still maintains a certain resilience.

The Congressional Budget Office (CBO) has released a new budget estimate. The deficit has increased by $408 billion compared to the February estimate, with the corresponding deficit ratio rising from 5.6% to 7%, far higher than the market’s median expectation of 5.8%. The CBO expects the deficit for the 2024 fiscal year to reach $19 trillion, roughly the same as the $18.6 trillion figure announced by the Office of Management and Budget (OMB). The restart of fiscal efforts will further support market liquidity and the real economy, reducing the urgency and magnitude of interest rate cuts, which has greatly impacted the market situation.

Affected by the sell-off in Mentougou, the price of Bitcoin (BTC) continued to be under pressure this week, with a larger decline in altcoins. The continuous rise of the US dollar index has put Bitcoin to the test of decline. The Bitcoin fear index has also continued to decline from 70 and has entered the fear zone from greed.

The Chicago Board Options Exchange Volatility Index (VIX) first rose and then fell, as the long-term high interest rates may bring about greater financial turmoil, and it is necessary to closely follow the potential amplification of future volatility.

High-quality Track

1) Curve zone

Reason for following:

The best place for stablecoin block trading is still firmly occupied by Curve, generating a continuous profit for the project. However, the narrative is too old-fashioned and lacks exciting new products or operations to create enough room for imagination and prospects for the project. The market continues to be pessimistic about its development after the liquidation downturn.

Reasons for catching the bottom:

On the one hand, the prices at which multiple whales bought CRV are all higher than $0.3, and the current price is in an absolutely reasonable range. On the other hand, Curve’s profitability has not been affected, and it will continue to generate cash flow.

2) Ethereum blue chip project

Market Catalysts:

The ETH Spot ETF is expected to be approved by the SEC on July 4th, and this news has a significant need for market sentiment repair. Approval of the ETH Spot ETF means that more institutional investors can enter the market more easily, which may push up the coin price.

ETH-based blue-chip assets will be able to achieve a greater success rate. Blue-chip assets usually have higher market value and stronger market credibility, so when market sentiment improves, these assets often 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 America. 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 Airdrop, which will continue to attract capital inflows.

User follow

1) Popular Tokens on Twitter

• $BLAST

BLAST is an Ethereum L2 network created by the Blur team, where users bridged to BLAST’s ETH will automatically compound interest, with earnings coming from Ethereum staking and RWA protocol, with annual percentage rates of 4% and 5% respectively. BLAST has a tiered referral reward model, and depositing more than 20 ETH can unlock a permanent referral link. BLAST provides a business model for Dapps to automatically appreciate cross-chain assets, and returns gas fee income to developers. BLAST will distribute 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 (Blast’s developer) to the Blast Foundation.

BLAST is expected to become an indispensable DeFi hub. After the airdrop, Blast (BLAST) soared 40%, outperforming other highly anticipated airdrops that have recently been listed. 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-level 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 computation more scalable, accessible, and efficient. The mission of io.net is to fairly access computing power by assembling over a million GPUs from independent data centers, crypto miners, and other crypto projects (such as FIL or Render).

IO was launched on June 11th with an opening price of $0.06. The next day, IO successfully refreshed its historical high at $6.5 and is currently showing a trend of support.

2) Popular DApp

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