Market Overview

This week, the cryptocurrency market experienced volatile downward movement. Bitcoin saw a correction, and Altcoins generally followed suit with volatile declines. The market sentiment index dropped significantly from 71% last week to 36%, indicating a bearish sentiment overall.

Stablecoin Market Dynamics

The stablecoin market maintained its upward trend from last week, continuing to show a simultaneous increase in both USDT and USDC:

• USDT: Market cap reached $152.9 billion, a weekly increase of 0.65%. Its weekly growth has exceeded $1 billion for four consecutive weeks, maintaining an upward trajectory.
• USDC: Market cap was $61.2 billion, a weekly increase of 0.33%, continuing last week's slight upward trend.

The continued increase in stablecoin market capitalization reflects a few key points: USDT's rapid and sustained growth suggests that institutional funds, primarily from non-U.S. users, are increasing their market entry. USDC's continuation of its slight upward trend from last week indicates that U.S. users, while optimistic about future trends, are still entering the market cautiously. Therefore, based on the capital flows over the past few weeks, it's evident that funds are actively entering the market regardless of whether it's trending up or down.

Reasons for This Week's Market Volatility

• BTC's new all-time high led to increased market divergence around the $110,000 mark, with insufficient follow-up capital.
• Altcoins lacked independent trends, with most projects passively following BTC's fluctuations.
• The market lacked new positive macro events and capital inflows, making it unable to sustain upward momentum.
• The existing market capital scale and investor sentiment were insufficient to support continued upward movement in the crypto market.
• Negative impact of external macro factors:
• Traders expressed concerns about U.S. Treasury issues, increasing market uncertainty.
• Expectations of the Federal Reserve potentially reducing the number of interest rate cuts this year curbed the attractiveness of risk assets.
• Market participants remained cautious about short-term upward prospects, with concerns outweighing optimistic expectations.
• Positive market sentiment failed to persist, leading investors to adopt a wait-and-see attitude.

Potential Reversal Factors and Investment Advice

Despite the subdued sentiment, major cryptocurrencies are still consolidating at high price levels, indicating some market resilience. The U.S. tariff situation remains complex, and the ongoing negotiation is not yet over.

Potential positive factors that could trigger a quick reversal:

• The Stablecoin Bill passing in the U.S. House of Representatives.
• FTX compensation funds continuing to flow into the market and being used to purchase crypto assets.

Investment Advice:

• Maintain a cautious attitude, avoiding blind FOMO (fear of missing out) buying or panic selling.
• Adopt a right-side trading strategy, waiting for trend confirmation before taking action.
• Be wary of the risks associated with blindly shorting, as the market could quickly reverse due to positive factors.

Next Week's Predicted Target

Bullish Target: ELDE

ELDE: Centralized Holdings and Potential for Price Rallies

This Wednesday, Binance Alpha launched Elderglade (ELDE), a GameFi project combining AI and NFT elements. After its TGE (Token Generation Event), the token followed the broader market trend downwards, but its tokenomics caught our attention.

Tokenomics Structure Analysis

The total supply is 400 million ELDE tokens, with a highly concentrated distribution structure:

• Liquidity/LP accounts for the highest share at 25% (100 million tokens).
• Marketing/Ecosystem accounts for 17.75% (71 million tokens).
• Development/Treasury accounts for 12.5% (50 million tokens).
• Team and Seed Investors each account for 10% (40 million tokens each).
• Airdrop accounts for a mere 3% (12 million tokens).
• IDO accounts for the lowest share at only 1% (4 million tokens).

Circulation and Holding Characteristics

After the TGE, the actual holdings of ordinary users are extremely small:

• Retail investors primarily obtained tokens through airdrops (only 3% of the total supply).
• Most users who participated in the airdrop quickly exited after the TGE.
• Liquidity/LP rewards obtained by retail investors were very limited.
• The vast majority of tokens remain concentrated in the hands of the project team and related stakeholders.​​

From the chart, we can see that while Elderglade's in-game daily trading volume has been relatively high recently, it's already on a downward trend. This is likely due to users farming airdrops.

As the chart shows, Elderglade's daily active users are rapidly declining.

Market Conditions & Potential Risks

The current market capitalization is only $13.26 million, which is relatively low. Real daily trading volume is less than $5 million, indicating limited liquidity.

This combination (low market cap + low liquidity + highly concentrated holdings) creates favorable conditions for the project team:

• The team can more easily influence the token's price movements.
• There's a potential risk of price manipulation.
• Even a small amount of capital can cause significant price fluctuations.

This tokenomics structure suggests ELDE may face a high centralization risk, which is very conducive for the Elderglade team to drive up the token price.

Bearish Targets: SOPH, SLF

SOPH: Shell Layer 2 Project Faces Cold Shoulder After Binance Listing; High Valuation and Low Activity Hint at Deep Correction Risk

On Thursday this week, Binance Alpha and Binance HODLer listed SOPH. While Sophon garnered market attention and hype during its pre-listing warm-up activities, its price plummeted over 35% after going live.

Poor Market Environment and Sector Performance

• In the current bull market, the Ethereum ecosystem's overall performance has fallen short of expectations, and Layer 2 projects generally underperformed.
• Market attention towards Layer 2 projects is gradually decreasing, putting Sophon at risk of being abandoned by the market.
• In the highly competitive Layer 2 market, Sophon lacks clear technological or application advantages.

Extremely Low On-chain Activity and Actual Usage

• On-chain DEX activity data shows that actual user trading activity is very low and trending downwards.
• Daily trading volume is only $690,000, indicating extremely thin on-chain activity.
• The top-ranked SyncSwap Protocol generated only $560,000 in on-chain fees over a year, reflecting extremely low actual usage.
• Insufficient on-chain transaction activity indicates that the project has failed to attract a real user base and valuable trading activity.

Ecosystem Development Severely Lags

• Only two on-chain ecosystem projects exist, with no native project development.
• Lacks a complete DeFi ecosystem to support it, preventing the formation of a virtuous cycle.
• No unique application scenarios or killer apps to attract users.
• Compared to other mature Layer 2 solutions, ecosystem development is severely behind, lacking momentum for growth.

Unrealistic User Growth and Valuation Bubble

• The surge in user data primarily stemmed from the anticipation of the Binance Alpha listing, increasing from 120,000 to 430,000 within 7 days.
• This user growth is highly likely driven by users farming points for airdrops, rather than genuine project usage demand.
• With a lack of substantive ecosystem and applications, the market capitalization of $132 million and an FDV (Fully Diluted Valuation) of $661 million are clearly overestimated.
• After the airdrop hype subsides, Sophon, lacking real usage scenarios, may face a severe price correction.

In summary, the Sophon project currently faces multiple issues including an unfavorable market environment, scarce on-chain activity, a nascent ecosystem, and unrealistic user growth, while its valuation is clearly inflated. These factors collectively form the bearish fundamental logic for Sophon, and investors should cautiously assess the associated risks.

SLF: Investment Risk Analysis Under Dual Pressure of Modular Public Chain Dilemma and Token Unlock

Self Chain is a modular, intent-centric Layer 1 project, a rebranding from its previous identity (Front).

Declining Market Positioning and Conceptual Appeal

• The modular concept has gradually faded in the market over the past six months, losing its hype advantage.
• Although public chain projects have become a market focus, Self Chain failed to seize this trend and distinguish itself in the highly competitive public chain arena.
• The project lacks clear technical differentiation and a unique value proposition, making it difficult to establish a competitive edge among numerous public chain projects.

Lagging Ecosystem Development

• The ecosystem lacks high-yield DeFi projects, unable to attract liquidity providers and traders.
• No breakthrough applications have emerged, lacking killer apps that could drive user growth.
• Failed to attract developers to build applications on its platform, with ecosystem development significantly lagging behind other public chains.
• The absence of a complete application ecosystem prevents the formation of network effects, leading to low user retention.

Impending Token Unlock Pressure

• On June 7th, 118 million SLF tokens will unlock, accounting for 3.54% of the total locked supply.
• According to the whitepaper's linear unlock schedule, this unlock primarily comes from institutional investors and the project team.
• Institutional and team unlocks are usually accompanied by a higher selling intention, especially if project development falls short of expectations.
• A large token unlock will significantly increase market supply in the short term, creating clear selling pressure.

Insufficient Liquidity and Weak Market Absorption Capacity

• Daily trading volume is only approximately $3 million, indicating severe lack of market liquidity.
• Low trading volume means insufficient market depth, making it difficult to absorb large sell orders without causing significant price fluctuations.
• The upcoming unlocked token amount far exceeds the current market's daily buying power.
• Without strong buying support, the selling pressure after the unlock is highly likely to lead to a significant price drop.

In summary, Self Chain (SLF) faces multiple unfavorable factors including declining conceptual appeal, lagging ecosystem development, impending token unlock pressure, and insufficient liquidity. These factors collectively form the bearish fundamental logic for SLF. Without significant positive news or ecosystem breakthroughs, SLF is highly likely to face downward price pressure in the short term, and investors should cautiously assess the associated risks.

Market Sentiment Index Analysis

The market sentiment index significantly decreased from 71% last week to 36%. This week, BTC fell by 4.6%, ETH by 1.2%, and TOTAL3 by 4.14%, indicating that Altcoins have, as a whole, entered a bearish phase.

Hot Sectors

Hyperliquid: From Precision Sniping to Market Resurgence – Growth Engine and Risk Analysis of an On-chain Perpetual Futures DEX

Overview

In March, Hyperliquid suffered significant losses and a substantial decline in both TVL and trading volume due as on-chain traders repeatedly exploited order book vulnerabilities for "precision sniping." Subsequently, Hyperliquid's official team improved the existing trading rules and closed down suspicious trades to curb these attacks.

Entering April, as the market trend continued to rise, Hyperliquid's trading volume gradually recovered. Notably, the return of on-chain whales, who frequently placed massive contract orders on Hyperliquid, began to attract market attention. Since then, Hyperliquid has gradually become a market hot spot, with its various metrics showing significant rebounds, and the HYPE token's price also reaching an all-time high.

On-chain Data Analysis

TVL

From the chart above, it can be seen that Hyperliquid's TVL reached a recent low of $230 million on April 7th, following the "precision sniping" incident. Over the subsequent month, it maintained a rapid upward trend, indicating a continuous return of funds. As of now, it has surpassed $500 million, an increase of over 100%.

Open Interest

As shown in the figure, Hyperliquid's open interest has rapidly grown over the past month, reaching an all-time high of over $9.3 billion, demonstrating rapid business growth for Hyperliquid.

Trading Volume

From the chart above, it can be seen that Hyperliquid's trading volume has been on a rapid upward trend recently, indicating quick business growth for Hyperliquid.

Project Revenue

As illustrated above, Hyperliquid’s revenue has recently remained elevated, peaking at US $4.32 million per day, and its annualized revenue is projected to surpass US $700 million.

As shown in the chart above, Hyperliquid’s project revenue fees (30-day average) rank 8th among all crypto projects. Excluding the issuers of USDT and USDC, Hyperliquid ranks 6th, with a monthly revenue of $64.46 million, just behind Jito’s $73.02 million, and even approaching Pump.fun. Additionally, with Hyperliquid’s buyback policy (97% of project revenue injected into the buyback fund), it provides solid support for the price of the HYPE token.

HLP amount

HLP is Hyperliquid’s signature innovation and the foundation of the entire project. As the chart shows, the HLP balance dipped after a precisely timed drawdown in March–April, but it soon resumed an upward trajectory. It has now returned to its previous level and pushed to a new all-time high of US $64.5 million.

Share of On-Chain Perp DEX Trading Volume (Major Platforms)

The chart above shows that Hyperliquid commands an overwhelmingly dominant share of trading volume among all leading on-chain perpetual DEXs.

Project Capital Flows

The chart shows that Hyperliquid has maintained strong net inflows over the past month. Continuous on-chain deposits indicate that more users are joining the platform to trade, which is boosting both trading volume and total value locked (TVL).

New Users vs. Trading Volume

The chart shows that Hyperliquid’s trading volume hit an all-time high during the past month, yet its influx of new users is far below the levels seen at the end of 2024. This suggests average volume per account has risen sharply—likely fueled by whale traders such as James Wynn and the so-called “50× Guy.” From another perspective, however, Hyperliquid’s new-user growth has declined markedly compared with earlier periods.

Binance vs. Hyperliquid Futures Trading Volume

The chart shows that Hyperliquid has experienced rapid growth recently, steadily eroding Binance’s market share in futures contracts. It has now reached 21.8% of Binance’s volume, and the upward momentum continues.

Large Holder Position Share

The chart shows that Hyperliquid’s total open interest currently stands at US $9 billion across 306,731 traders. The top 20 addresses alone hold US $2.186 billion, accounting for 24.28 % of all open positions—evidence that a small group of large holders drives a significant share of the platform’s activity.

Validator Staking Balance

As you can see from the chart above, HYPE's pledge balance has remained very stable, which shows that HYPE holders have been very confident in Hyperliquid. P/E Comparison The main competitors of Perp DEX, which is homogeneous with Hyperliquid, are: dydx, Drift, GMX, and Jupiter. The buyback policies are as follows: dydx uses 25% of its revenue for DYDX token buybacks (dydx's annualized revenue is $13.43 million) Drift does not have a token buyback mechanism at this point in time, and in the Drift DIP-4 proposal has a plan to buy back 4 million DRIFT, but no vote yet (Drift annualized revenue of $14.95 million) GMX doesn't have a token buyback mechanism yet (GMX annualized revenue of $23.98 million) Jupiter is using 50% of its revenue as a JUP token buyback (Jupiter annualized revenue of $87.9 million) Hyperliquid uses 90% of its revenue as a HYPE token buyback. (Hyperliquid's annualized revenue is $742.91 million)

From there, you can do a side-by-side comparison in terms of market cap/revenue and market cap/buyback amount:

Because most perpetual-DEX protocols now run buy-back programs—which not only support token prices but, more importantly, bolster market confidence—Hyperliquid retains a decisive edge when we compare market-cap vs. buy-back budget. Although its market value is well above that of its peers, its price-to-earnings ratio is actually lower.

Summary

The foregoing analysis shows that Hyperliquid is in a phase of rapid expansion and already commands a significant share of the perp-DEX market. The presence of high-profile traders executing very large positions on the platform should further amplify Hyperliquid’s visibility and brand stature. On key metrics such as business growth and valuation multiples, the project looks healthy and still offers meaningful upside.

That said, Hyperliquid faces a material risk: it relies heavily on a relatively small cohort of “whale” traders. Should these whales incur large losses or leave the platform, trading volume and revenue could fall sharply. Mitigating this concentration—by diversifying the user base and reducing dependence on any single segment—will be a critical priority for Hyperliquid going forward.

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