🚀 Weekly Crypto Market Wrap: FEB 1, 2025

Contents

1. Overview in This Market
2. Movement in the Top 8:     Prices, Performance, and Key Drivers
3. This Week’s Narrative:     DeepSeek AI Threatens US Tech Dominance
4. Key Advancements:     Major Innovations Across Chains and Platforms
5. DeFi Brief:     Strategic Updates and Ecosystem Expansions
6. Meme's in Motion:     High-Profile Memecoins and Community Impacts
7. Airdrop Buzz:     Engaging Early Users Through Strategic Token Distribution
8. The Wrap Up:     Navigating Market Uncertainty with Resilience

Overview in This Market:   Bitcoin Finds Stability as Market Navigates DeepSeek Shockwave‍

This week saw heightened volatility driven by the DeepSeek news, which triggered a sharp correction in both crypto and traditional equity markets. Bitcoin (BTC) initially dropped from $105,000 to $97,700, before rebounding later in the week. The total cryptocurrency market capitalization fell 0.9% to $3.708 trillion, down from $3.732 trillion the previous week. Bitcoin gained 1.1%, while Ethereum (ETH) underperformed with a 1.45% loss.‍

Key Metrics and Highlights:

• Daily Liquidations: Over $660 million in long positions were liquidated early in the week, triggered by the market’s response to the DeepSeek news, highlighting heightened leverage risk.
• Short Liquidations: Averaged just over $100 million per day, reflecting less aggressive shorting activity compared to long liquidations.
• Funding Rates: Mostly stable across major tokens, showing investor caution despite the initial sell-off, with rates remaining in single-digit and low double-digit ranges.

Major Developments:

• Michael Saylor’s MicroStrategy acquired 10,107 BTC for $1.1 billion, increasing its total holdings significantly. The purchase signals Saylor’s continued bullish stance on Bitcoin despite market volatility.
• MicroStrategy also announced a convertible preferred stock offering, STRK, designed to finance additional Bitcoin purchases, reflecting a long-term commitment to accumulating BTC.
• Trump Media and Technology Group declared plans to invest in Bitcoin and other cryptocurrencies, potentially opening doors for broader media-driven crypto adoption.

What This Means & The Impact:
Despite early-week turbulence, Bitcoin’s recovery highlights its resilience and investor confidence amid market uncertainty. The Fed’s interest rate stability further supported market stabilization, leading to broader risk-on sentiment by week’s end.

‍Movement in The Top 8:   Prices, Performance, and Key Drivers

1. Bitcoin (BTC): $101,613 (-2.57% over 7 days)
   BTC’s initial drop was driven by macroeconomic concerns and market-wide sell-offs following DeepSeek’s AI model launch. Recovery efforts were aided by institutional buying and reduced uncertainty after the Fed’s rate decision.
2. Ethereum (ETH): $3,247 (-0.57% over 7 days)
   ETH showed modest losses as investor caution persisted in the altcoin sector. Limited DeFi growth and subdued on-chain activity contributed to the underperformance compared to Bitcoin.
3. XRP (XRP): $3.00 (-2.60% over 7 days)
   Ongoing regulatory battles, including legal uncertainty surrounding the SEC case, kept XRP under pressure. Investors remain wary of near-term price action until clarity emerges.
4. Solana (SOL): $227.94 (+3.09% over 7 days)
   SOL continued its strong performance due to increased DeFi activity, NFT project launches, and the success of Solana-based protocols like Jupiter and Virtuals Protocol expansion.
5. BNB (BNB): $669.85 (-1.33% over 7 days)
   BNB faced modest declines due to broader market sentiment and limited major ecosystem announcements. However, Binance’s consistent activity and user base mitigated losses.
6. Dogecoin (DOGE): $0.3228 (-1.48% over 7 days)
   DOGE saw limited catalysts, with price action driven mostly by broader market trends. Speculative activity was relatively low, reflecting reduced interest in meme tokens.
7. Cardano (ADA): $0.9257 (-3.20% over 7 days)
   ADA underperformed due to delays in key network updates and limited ecosystem growth. Investor sentiment remains cautious until new developments drive renewed momentum.
8. TRON (TRX): $0.2534 (-0.57% over 7 days)
   TRX showed minor declines, reflecting market-wide sentiment. However, stable DeFi activity on TRON’s network prevented deeper losses.

The Impact & Significance:
The mixed performance highlights Bitcoin’s dominance and relative stability, while altcoins continue to face pressure from cautious sentiment and limited major catalysts. Solana remains a standout due to its thriving ecosystem.

‍This Week’s Narrative:  

DeepSeek AI Threatens US Tech Dominance, Sparking Market Reactions China-based AI firm DeepSeek released its R1 AI model, raising concerns over US tech dominance. The model’s cost efficiency and performance metrics shook investor confidence in traditional tech giants.

‍Key Developments:

• DeepSeek’s AI announcement contributed to a $1 trillion market loss, with semiconductor and tech stocks among the hardest hit. Nvidia saw a 17% drop in a single day.
• Investors shifted capital toward AI innovation rather than traditional hardware plays, reflecting a pivot in market sentiment.

What This Means & The Impact:
The narrative surrounding DeepSeek underscores the accelerating shift toward AI-led innovation globally. For crypto markets, this trend could result in increased investment in AI-driven blockchain projects and tokenized AI applications.

‍Key Advancements:  

Major Innovations Across Chains and Platforms

• Abstract Chain: The mainnet launch introduced a social wallet and streaming platform, enhancing the utility of Abstract’s ecosystem by catering to content creators and social finance users.
• Virtuals Protocol: Expansion to Solana boosts its omnichain capabilities, enabling seamless liquidity provision for AI agent tokens.
• THORChain: Facing insolvency, the network paused operations and is undergoing a restructuring plan to secure long-term viability.
• Blast Mobile: Introduced mobile access to Blast’s high-yield services, offering over 50% APY on USD deposits.
• Mode Network: Launched the Synth subnet, designed to support DeFi AI agents and incentivize Mode Network participants through dynamic tokenomics.

What This Means & The Impact:
Key advancements underscore the diversification of DeFi and blockchain utility across chains. Solana continues to attract significant development activity, while THORChain’s restructuring highlights the risks associated with liquidity crises.DeFi Brief:  

Strategic Updates and Ecosystem Expansions

• Jupiter Exchange: Redirecting 50% of protocol fees to JUP token buybacks aims to drive value accrual and tokenholder benefits.
• Jupnet: The launch of an omnichain network for crypto aggregation seeks to simplify user experiences by unifying disparate networks.
• Maple Finance: Introduced Lend + Long, a novel DeFi product combining loans with BTC options to enhance yield opportunities.
• Usual Money: Launched Usual Stability Loans (USL), providing a mechanism to unlock liquidity using stable bonds as collateral.
• Fluid (Instadapp): Released Multiply, a leveraged position product enabling efficient looping for higher returns.

What This Means & The Impact:
DeFi continues to evolve with new financial products and cross-chain solutions. Projects like Jupiter and Maple demonstrate how DeFi is positioning itself as an alternative to traditional financial services.

‍Meme's in Motion:  

High-Profile Memecoins and Community Impacts

• Sam Lessin’s jellyjelly: The gamified memecoin tied to Lessin’s social app Jelly saw strong engagement, reflecting the enduring appeal of combining social interactions with tokenomics.
• Jupiter Exchange Acquires Moonshot: By acquiring a memecoin-focused exchange, Jupiter is expanding its presence in retail-friendly markets, aiming to attract retail investors.
• Unicorn Fart Dust (UFD) Hack: A major token theft led to community-driven recovery efforts, showcasing the resilience of decentralized ecosystems in mitigating risks.

What This Means & The Impact:
The memecoin space remains highly speculative but continues to attract user engagement. Community resilience, as demonstrated by UFD, highlights the strength of decentralized support mechanisms.‍

Airdrop Buzz:  

Engaging Early Users Through Strategic Token Distribution

• Karak Network: Upcoming KAR token airdrop is designed to incentivize staking participation and early adoption within the network.
• Venice: Distributed 50% of its token supply to existing users and Base community members, driving cross-chain liquidity.
• OpenSea 2 Snapshot: Held for Gemesis NFT holders, providing early access to the next version of OpenSea’s platform, aimed at improving NFT trading.

What This Means & The Impact:
Airdrops remain an effective method for user engagement and ecosystem growth. Projects like Karak and Venice use strategic token distribution to build community loyalty and drive liquidity.

‍The Wrap Up:   Navigating Market Uncertainty with Resilience

‍This week highlighted the delicate balance between innovation and market volatility, with DeepSeek’s AI launch shaking both crypto and traditional sectors. Bitcoin demonstrated resilience, stabilizing sentiment, while Solana’s rapid development reinforced its leadership in DeFi and token launches. As the market continues to evolve, all eyes are on AI, regulatory clarity, and project innovation.

‍Your Trusted Crypto Research Team
Crypto Research Australia (CRA)
"Navigating trends for smarter decisions."