Market Panic Spreading, Which Assets Are Still Holding Strong?
Original Title: "Highlights and Shadows in a Downtrend | Frontier Lab Cryptocurrency Market Weekly Report"
Original Author: Frontier Lab
Market Overview
Overall Market Situation
This week, the cryptocurrency market has been in a rapid downtrend, with the market sentiment index dropping from 33% to 11%. The market capitalization of stablecoins has essentially ceased continuous growth (USDT reaching 142 billion, USDC reaching 55.9 billion, with changes of 0.02% and -0.53% respectively), indicating that as the market experienced a significant decline, institutional funds have stopped entering, leading to signs of exiting. Market sentiment saw panic mainly due to the Bybit exchange being hacked for $1.5 billion in assets and Trump's aggressive tariff policy, intensifying market concerns about inflation. This has reduced the likelihood of a Fed rate cut, heightened market fears of a U.S. economic recession, and had a strong impact on market sentiment, plunging it into extreme fear. Altcoins have generally underperformed the benchmark index.
Next Week Forecast Targets
Bullish Targets: LTC, S, SOSO, BERA
LTC: LTC rose against the trend this week, showing strength in the market as a whole declined. This strong performance was mainly due to market expectations for its LTC ETF approval. This week, the spot LTC ETF proposed by Canary Capital has been listed in the Depository Trust & Clearing Corporation (DTCC) system, and LTC has received 87% approval for staking on Polymarkt. The market currently has high expectations for the approval of the LTC spot ETF, so there will be continuous hype around the LTC spot ETF event until its formal approval.
S: Sonic has recently entered the DeFi industry, attracting a large number of on-chain users and funds through its on-chain DeFi project with high APY. In its on-chain primary liquidity staking projects, Beets and Origin, the APY for liquidity pools based on the S token can reach up to 32.22% and 123% respectively. The average interest rate for users borrowing the S token in Sonic's on-chain lending protocol is 10.21%, allowing users to achieve a yield of over 20%. Additionally, the recent surge in demand for the S token due to the popularity of Sonic's on-chain activities has driven up the price of the S token against the trend. This increase in price has further boosted the earnings of Sonic's on-chain users. Therefore, in the current bear market, users can still gain over 20% in risk-free returns, attracting a large number of users to participate through borrowing, increasing the market demand for the S token and driving its price into a spiral uptrend.
SOSO: The SoSoValue project team is able to continuously adjust its future development direction according to the market trend. Originally, SoSoValue positioned itself as an AI-technology-enhanced all-in-one investment service platform, aiming to keep up with the market trend of AI Agents. After the decline of AI Agents, market attention and funding shifted back to Defi projects. As a result, SoSoValue seized the current trend of high APY to attract users and transformed itself into a financial service center. While still leveraging its AI technology within the product, the focus of promotion shifted to highlighting the high APY it could provide. Recently, the project launched its second season of mining activities, allowing users to mine the SOSO token by holding or staking the SSI packaged index token. Through this initiative, users can earn staking rewards along with additional airdropped SOSO tokens, with APY reaching up to 42%. This move attracted more users to participate in mining, further increasing the bullish sentiment towards the SOSO token.
BERA: The overall market was in a downtrend this week. Initially, BERA was also affected by the market and experienced a decline. However, the Berachain project team quickly adjusted the on-chain APY of the LSD project. In Berachain's main LSD project, Infrared Finance, the APY of WBERA was increased to a maximum of 123%, and the borrowing rate of BERA in the on-chain lending project reached 23.68%. This adjustment allowed arbitrage participants to earn a 100% risk-free annualized return, swiftly reversing the downtrend to an uptrend. The strategy employed by the Berachain project team was similar to Sonic's, focusing on attracting on-chain users and funds through high APY to facilitate staking, liquidity provision, DeFi empowerment, and token appreciation. By offering high APY, the project aimed to increase the demand for the on-chain primary coin BERA in the market, thereby promoting an increase in the BERA token price.
Bearish Targets: ETH, SOL, ADA, AI, TKO, RUNE
ETH: Bybit was hacked this week, resulting in the theft of 491,000 ETH. Although Bybit has already fully recovered the stolen ETH through purchase and redemption, the buying pressure generated has not been reflected in the market price. This indicates that market investors still hold FUD sentiments towards ETH, as they anticipate continued selling pressure from the hacker. Furthermore, the investigation report on the Bybit hack explicitly stated that the main reason for the theft was a vulnerability in the platform's safe system, rather than a flaw in the exchange's infrastructure. This raised significant doubts in the market regarding safe technology, which is commonly used by most projects in the Ethereum ecosystem. Therefore, this poses a potential risk to the security of most projects in the Ethereum ecosystem. Additionally, Ethereum's Pectra upgrade is scheduled to go live on the testnet this weekend. Historically, price pumps occur before technical upgrades, followed by retracements post-implementation. Given that the Pectra upgrade has not injected much bullish momentum into ETH's price, a probable scenario after its implementation is a price decline for ETH.
SOL: This week, SOL experienced a significant drop following the overall market trend. This was mainly due to the recent retreat of the Meme coin craze. Solana, as the public chain with the highest Meme coin returns, also faced various FUD (Fear, Uncertainty, Doubt) voices in the market. This led to an outflow of funds from Solana's chain, with its Total Value Locked (TVL) dropping from $12.1 billion to $7.3 billion, a decrease of 39.66%. The on-chain liquidity staking yield on Solana also decreased from 10.29% to 7.26%. Additionally, on-chain transaction volume decreased from $35.5 billion to $2.4 billion, plunging by 93.23%. These indicators suggest that Solana's on-chain ecosystem is on the brink of collapse. Moreover, on March 1st, 11.2 million SOL tokens will be unlocked, with these tokens predominantly held by institutions. This unlocking may lead to continued selling pressure, exacerbating market investors' fear and panic regarding SOL.
ADA: This week, Cardano's on-chain TVL experienced a significant decline, dropping by 26.88% to $3.08 billion. This marks a 56.06% decrease from its peak of $7.01 billion. The TVL of all ecosystem projects on its chain also saw declines of over 10%, indicating a rapid outflow of funds from the Cardano ecosystem. This trend reflects the current market sentiment of FUD towards the Cardano ecosystem. Trading volume on its on-chain DEX has decreased by over 68%, and the ADA token's borrowing rate is currently at 3.29%. These numbers suggest that very few participants are engaging in borrowing and lending activities in the Cardano ecosystem, leading to borrowing rates significantly lower than those of other public chain tokens. Therefore, if outflows from the Cardano on-chain funds continue, it is expected that ADA will continue to decline next week.
AI: Sleepless AI is an AI-based GameFi project. Among all AI and GameFi projects, Sleepless AI experienced the deepest retracement during this downturn. This is because investors in the market have lost interest in the Play-to-Earn model of GameFi, resulting in a gradual decrease in users and minimal new capital inflow. There is a widespread belief that AI projects are currently overvalued, leading to a significant pullback trend in the AI track. Additionally, AI is set to unlock 17.27 million tokens next week, accounting for 1.73% of the current circulating supply. With a large unlocking percentage and the recent downturn in this track, it is expected that a downturn will occur shortly after the token unlocking.
TKO: Tokocrypto is the largest cryptocurrency exchange in Southeast Asia. Due to the recent Bybit hack incident, various centralized exchanges have been negatively impacted, causing the tokens of various exchanges to underperform. Additionally, TKO is about to unlock 100 million tokens, which accounts for 2.02% of the current circulating supply. The high unlock percentage is expected to lead to a price decline after the unlock.
RUNE: THORChain is a decentralized cross-chain AMM trading protocol. This week, it experienced a significant counter-trend surge from Monday to Wednesday. This surge was mainly caused by the hacker who stole from Bybit continually transferring ETH into THORChain to conduct money laundering transactions. As a result, THORChain saw a substantial increase in trading volume and fees. Despite not following the overall market trend, the exposure of the hacker's use of THORChain for money laundering led to THORChain's developer, Pluto, announcing resignation. It is expected that next week, the price will continue to fall due to reduced transaction volume and market FUD regarding its alleged money laundering activities.
Market Sentiment Index Analysis
The market sentiment index decreased from 33% last week to 11%, placing it close to the extreme fear zone overall.
Hot Track
Sonic
· Current Status
In recent weeks, Sonic's chain TVL has maintained a rapid growth trend. This week, while the TVL of most other chains on the network experienced a downward trend, Sonic was the only chain with a TVL exceeding $50 million to maintain a 10% growth rate. The TVL on the chain increased to $683 million, demonstrating that its on-chain ecosystem can continue to attract funds even in a severely bearish market. Sonic's token, S, also saw a 7.63% increase this week. Although the rise is not significant, achieving an increase while the overall market is collapsing indicates market recognition.
· Reasons for Hot Trend
Recently, Sonic has shifted its project focus from GameFi to DeFi on-chain, using high APY to attract on-chain users. In its main liquidity projects on the chain, users can receive up to 123% APY, while the borrowing and lending side offers around 10% interest rates, enabling users to achieve over 100% APY arbitrage opportunity. In the current bearish market, APY over 100% is highly attractive to on-chain users, prompting them to participate in arbitrage through buying or borrowing, increasing the demand for token S and leading to its outperformance compared to most other tokens.
· Future Outlook
The recent popularity of the Sonic ecosystem can be attributed to the LSD project within the Sonic ecosystem, which increased the annual percentage yield (APY), attracting more on-chain users to participate in arbitrage activities. Therefore, we can see that a quick development path for an ecosystem is to achieve efficient driving of its economic flywheel, with the project focusing on the DeFi track to empower assets efficiently. In order to empower assets around DeFi, emphasis needs to be placed on asset collateralization and liquidity, allowing assets to generate compound returns in DEX, lending, and asset management. The on-chain ecosystem's economic flywheel must be formed through staking + liquidity + DeFi empowerment + user growth in a positive feedback loop. The core driving force lies in the dual-wheel drive of on-chain native token staking and liquidity release, enabling the generation of compound returns in scenarios such as DEX, lending, and asset management, achieving "staking as productivity." Once on-chain users are attracted by high APY to the on-chain ecosystem, it is necessary to establish a positive cycle of staking lockup → liquidity release → DeFi empowerment → token appreciation → user retention → re-staking → developer aggregation. Otherwise, if new users' funds entering the ecosystem are insufficient to cover the selling pressure from arbitrage, the token price will decline, leading to a reduction in project yields and causing arbitrageurs to exit. This would be a significant blow to an ecosystem, so we need to continue monitoring the APY of Sonic's on-chain DeFi projects to assess if the Sonic chain still has development momentum through on-chain APY.
However, it is important to note that although Sonic's TVL was the fastest-growing among all chains with over $1 billion TVL this week, its TVL did not consistently rise this week but experienced a peak and retreat phenomenon.
Berachain
· Current Status
This week, the entire market was in a rapid downturn trend, and the top ten projects by TVL were all in a declining state except for Berachain. Although Berachain's TVL only increased by 4.66% this week, maintaining positive growth in the current environment is already commendable. The TVL reached $3.194 billion, ranking sixth in TVL among all public chains, surpassing the Base chain. The price of its token, BERA, also saw an increase this week, with a rise of 7.26%, placing it in a strong position among Altcoins.
· Reasons for Popularity
This week, the TVL of the top DEX, Lending, and LSD projects in the Berachain ecosystem showed a slowing growth rate compared to the previous weeks. Additionally, there was a decrease in Berachain's TVL in the first half of the week. However, the situation reversed when the primary LSD project on Berachain, Infrared Finance, offered the highest WBERA APY of 121%, and the emerging LSD project, Stride, achieved an APY of 190.12%. Simultaneously, the borrowing rate for BERA in Berachain's lending projects was 23.68%, allowing arbitrageurs to earn a risk-free 100% annual percentage yield. This quickly halted the downward trend and shifted it towards an upward movement.
· Future Outlook
Berachain remained vibrant this week mainly due to the increased APY of its on-chain DeFi projects, maintaining a high level of attractiveness to on-chain users. This led to a substantial inflow of funds into Berachain. Berachain's development path is somewhat similar to Sonic, so it faces similar challenges. Currently, Berachain has achieved a process of staking lockups → liquidity release → DeFi empowerment → token value appreciation. However, it has not seen outstanding on-chain projects in the process of user retention → re-staking → developer aggregation. Therefore, while the high-yield model has enabled rapid development of the on-chain ecosystem in the short term and promoted a swift rise in the project's token, BERA, it will inevitably face increasing selling pressure in the future. When the capital from new users is insufficient to offset the sell pressure from arbitrage, the BERA token price will decline. Subsequently, the returns of various projects will decrease, causing arbitrageurs to exit. Therefore, in the future, more attention should be paid to whether new stellar projects emerge in the Berachain on-chain projects and whether the interest rates for on-chain LSD projects significantly decline.
Market Theme Overview
Data Source: SoSoValue
In terms of weekly returns, the Sociafi track performed the best, while the PayFi track performed the worst.
· Sociafi Track: In the Sociafi track, TON and CHZ account for a significant portion, totaling 95.17%. Their respective weekly declines were: -4.86% and -4.79%. Although both are in a downward trend, they still outperformed other Altcoins, resulting in the best performance of the entire Sociafi track index.
· PayFi Track: In the PayFi track, XRP, LTC, and XLM account for a significant portion, totaling 94.62%. Their weekly declines were: -19.23%, -1.21%, and -16.96%, respectively, making the PayFi track the worst performer.
Next Week's Crypto Major Events Preview
Monday (March 3rd): U.S. February ISM Manufacturing PMI
Wednesday (March 5th): U.S. February ADP Employment Change; Pectra Network upgrade plan launches on the Ethereum testnet
Friday (March 7th): U.S. February Seasonally Adjusted Nonfarm Payrolls; U.S. February Unemployment Rate
Summary
This week, the cryptocurrency market experienced a significant decline, with the market sentiment index plummeting sharply, reflecting investors' widespread concerns. However, some projects such as LTC, Sonic, SoSoValue, and Berachain attracted users through high APY strategies. In the long run, market stability and the emergence of new projects will be key factors. It is advisable for investors to closely monitor market dynamics and exercise caution.
You may also like
CFTC Reportedly Plans New Prediction Market Rules Focused on Manipulation Risk and Public Interest Review
The CFTC is reportedly preparing new prediction market rules focused on manipulation risk, public interest review, and retail trader protections.
Meet the new WEEX trial fund—your gateway to greater profits
WEEX Labs Lands at Dutch Blockchain Week: A Disruptive Crypto × AI Conversation Sets Sail in Amsterdam
SK Hynix Reportedly Plans U.S. ADR Listing as Early as August, With SEC Approval Possible in Late June
SK Hynix may pursue a U.S. ADR listing as early as August, with SEC approval reportedly possible in late June amid strong AI chip supply chain demand.
SpaceX vs Tesla vs xAI: Which Elon Musk Trade Has the Biggest Upside in 2026?
OpenAI Reveals It Has Confidentially Submitted an S-1 to the SEC, Keeping the Door Open for a Future IPO
On June 9, according to an OpenAI announcement, the company recently confidentially submitted a draft S-1 registration statement to the U.S. Securities and Exchange Commission (SEC), beginning the preliminary compliance process for a potential initial public offering. OpenAI said it chose to disclose this proactively because it expected the news might leak; however, the company has not yet set a specific listing timeline, and related arrangements may still take some time.
Latest research from 13 top universities including Cornell University: The current state, challenges, and misconceptions of the fusion of Crypto and AI
Deconstructing Anthropic: The Best AI Company, Possibly Also a Type of Organizational Invention
Apollo and Blackstone Reportedly Back $35 Billion Anthropic Chip Financing as Deal Details Remain Unclear
On June 9, according to currently available news alerts, Apollo and Blackstone Group participated in a $35 billion financing for an Anthropic “chip project.” Based on the original wording of the report, the funding has already been raised, but public information remains limited. The financing structure, use of proceeds, project entity, and whether Apollo and Blackstone participated through equity, debt, or project financing have not yet been disclosed.
Humanity Protocol Security Incident Escalates: More Than $31 Million Stolen From Related Addresses as Attacker Continues Selling H for ETH
On June 9, according to monitoring by Onchain Lens, more than $31 million has been stolen from addresses linked to Humanity Protocol, and the attack is still ongoing, with the hacker continuously swapping H tokens for ETH. Project founder Terence Kwok later confirmed the security incident on X, saying the issue involved a private key leak.
Bloomberg: As Bitcoin Weakens, Stablecoins and RWA Continue to Drive Expansion in Crypto Businesses
In June, Bloomberg reported that despite Bitcoin falling below $60,000 last week, wiping out about $235 billion in market value within seven days, and dropping close to 50% from last year’s peak, some core businesses in the crypto industry are still expanding, mainly in stablecoins, real-world asset tokenization (RWA), payments, and infrastructure. The report also noted that overall altcoin activity has contracted significantly: altcoin market capitalization has fallen from a peak of about $431 billion in November 2021 to around $170 billion, and among the tens of millions of tokens issued in recent years, fewer than 1,700 still maintain meaningful trading activity.
Galaxy Deep Research Report: How Hyperliquid's HIP-4 Upgrade Changes the Landscape of Prediction Markets?
Binance Research: RWA Market Expected to Expand Nearly 6x from Early 2025, with Public Equities and Onchain Payments Heating Up Together
In June, Binance Research said in its monthly market report that the real-world asset (RWA) market is expected to grow by about 589% from the beginning of 2025. Bond- and money market fund-related RWA expanded by about $6.5 billion, up 83% year over year, while publicly traded equity RWAs grew by about 422%. The report also noted that monthly crypto debit card transaction volume exceeded $747 million in May, up 48.6% year to date.
Japan to Assess a Framework for Yen Stablecoins and Crypto ETFs as Asia’s Compliant Payments Narrative Heats Up
Recently, according to the original report, Japan is considering the launch of yen stablecoins and cryptocurrency ETFs. Public information remains limited at this stage, and there is still no complete policy text, regulatory draft, or clear implementation timeline, so this is better characterized as a “policy discussion” rather than formal implementation. The original wording also noted that advancing stablecoin regulation in Asia is driving XRP usage and supporting growth in the XRPL ecosystem. However, based on currently available public information, there is not enough evidence to directly establish a clear causal relationship between this round of discussion in Japan and XRP or XRPL.
ZachXBT: Humanity private key leak and abnormal surge in H token should be viewed separately
On June 9, according to related disclosures, on-chain investigator ZachXBT posted an update on Humanity’s roughly $31 million security incident, saying that after further analyzing fund flows, he currently tends to believe the project team was not involved in an “inside job” or a self-staged attack. According to him, the official explanation about the private key leak was broadly accurate, but before the token unlock, the price of H had been artificially pushed higher, and the hacker later took advantage of that market environment; therefore, the private key leak and the earlier abnormal price pumping should be regarded as two separate and independent events. This reframing has shifted the market’s understanding of the nature of the incident. Earlier discussion around Humanity had focused on whether the team directly participated in the attack or used the security incident to cover up internal operations. ZachXBT’s latest remarks shift the focus from “whether it was self-theft” to “whether there were pre-unlock market structure issues.” He also questioned whether the team may have.
Morning Report | OpenAI has submitted an S-1 registration statement draft to the U.S. SEC; Morpho completes $175 million financing
Morning Report | BitMine increased its holdings by 126,971 ETH last week; trader Eugene announced his exit from the crypto market
Wang Chuan: How can one not feel anxious after the neighbor Old Wang made thirty times profit by investing in storage stocks? (Seven) - A quarter-century cycle
CFTC Reportedly Plans New Prediction Market Rules Focused on Manipulation Risk and Public Interest Review
The CFTC is reportedly preparing new prediction market rules focused on manipulation risk, public interest review, and retail trader protections.
Meet the new WEEX trial fund—your gateway to greater profits
WEEX Labs Lands at Dutch Blockchain Week: A Disruptive Crypto × AI Conversation Sets Sail in Amsterdam
SK Hynix Reportedly Plans U.S. ADR Listing as Early as August, With SEC Approval Possible in Late June
SK Hynix may pursue a U.S. ADR listing as early as August, with SEC approval reportedly possible in late June amid strong AI chip supply chain demand.
SpaceX vs Tesla vs xAI: Which Elon Musk Trade Has the Biggest Upside in 2026?
OpenAI Reveals It Has Confidentially Submitted an S-1 to the SEC, Keeping the Door Open for a Future IPO
On June 9, according to an OpenAI announcement, the company recently confidentially submitted a draft S-1 registration statement to the U.S. Securities and Exchange Commission (SEC), beginning the preliminary compliance process for a potential initial public offering. OpenAI said it chose to disclose this proactively because it expected the news might leak; however, the company has not yet set a specific listing timeline, and related arrangements may still take some time.
