🟠 Binance Research: Key Trends of the Month

Last month, the cryptocurrency market continued to demonstrate its volatility and dynamic development.

In the new Binance Research report, key events and trends that significantly impacted the market in July are highlighted.

🔸 Overview

July 2024 brought a 6.1% growth in the cryptocurrency market, driven by events such as the SEC's approval of nine spot ETH ETFs and Germany's sale of 50,000 BTC.

However, concerns remain regarding Mt. Gox repayments and the potential BTC sell-off by the U.S. government.

📈 Cryptocurrency Performance

🧬 Solana (SOL) saw a 30.5% increase, fueled by a 42.2% rise in DEX trading volumes and growing ecosystem activity.

✖️ XRP experienced a 27.6% increase, supported by the announcement of new indices and reference rates for XRP.

🔻 TRON (TRX) rose by 9.8%, entering the top 10 by market capitalization following the announcement of a new gasless stablecoin.

🪙 BTC rebounded by 9.7% after the easing of selling pressure and positive news from Donald Trump at the Bitcoin 2024 conference.

Not all cryptocurrencies performed positively:

AVAX and ETH saw declines of 1.2% and 1.6% respectively, while TON dropped by 12.2%.

🟡 Decentralized Finance (DeFi)

Total Value Locked (TVL) in DeFi grew by 3.5%, with the highest growth seen in CORE, Scroll, and Mantle.

Symbiotic's TVL surged by 283%, driven by partnerships with major protocols and interest in restaking.

🖼 NFT Market

The NFT market in July declined by 7.14%, with total sales reaching $430 million.

DMarket led the market with $16.2 million in sales.

While Solana collections showed volume growth, major Ethereum collections declined.

👀 Upcoming Events

August 2024 will see significant token unlocks that could impact the cryptocurrency market.

Among the largest token unlocks are:

🔺 $AVAX — $253.62M (2.42% of total supply), unlock date — August 20

🧿 $W — $150.76M (33.33% of total supply), unlock date — August 3

🌑 $APT — $74.76M (2.41% of total supply), unlock date — August 12

💲 $SAND — $67.35M (9.00% of total supply), unlock date — August 14

✖️ $IMX — $47.09M (2.11% of total supply), unlock date — August 9

These unlocks represent significant amounts that could affect the liquidity and pricing of the respective tokens.

🔸 In Conclusion

Despite positive news such as the launch of spot ETH ETFs and the growth of the Solana ecosystem, there are also concerning factors that may impact the market in the future.

Ongoing attention to Mt. Gox repayments and U.S. government actions indicate that market volatility is likely to continue 📊

It is important to stay informed of new trends and be prepared for changes that could significantly influence the market in the coming months.

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❓ Liquidity Fragmentation: A Hidden Threat to Crypto Markets

Discussions around volatility and price swings in cryptocurrency circles never seem to die down, but one fundamental cause often remains overlooked — liquidity fragmentation.

This hidden phenomenon can become a catalyst for significant price discrepancies and sharp market movements.

Let's dive into how liquidity fragmentation impacts markets and what it might lead to.

📊 Crypto Markets and Liquidity Fragmentation

Liquidity fragmentation occurs when trading volumes and liquidity are unevenly distributed across various exchanges. As a result, different platforms can exhibit varying prices for the same asset.

Although these discrepancies have lessened over time, they still occur, particularly on smaller, less liquid exchanges and during sharp market events 🕯

A recent market sell-off on August 5th served as a clear example:

BTC prices on Binance.US 😀 diverged from those on more liquid platforms. The situation was even more dramatic for less liquid altcoins.

Binance.US, whose trading volumes and liquidity have plummeted since the SEC lawsuit in June 2023, became the epicenter of these price discrepancies.

📉 Price Slippage and Market Shocks

Price slippage — the difference between the expected price of an order and its actual execution price—serves as one of the best indicators of liquidity. During market sell-offs, this slippage tends to increase, making it harder to execute orders at the desired price.

During the August 5th sell-off, slippage increased across most exchanges, but the most significant spike was observed in the BTC-JPY pair on Zaif and the BTC-EUR pair on KuCoin, where slippage exceeded 5%.

Surprisingly, even stablecoin-quoted pairs like USDT and USDC on BitMEX and Binance US showed a significant increase in slippage, despite their reputation as the most liquid pairs on crypto exchanges.

⌨️ Liquidity Concentrates on Weekdays

With each passing year, liquidity in cryptocurrency markets is increasingly concentrated on weekdays. This trend has intensified with the launch of spot ETFs in the United States 🇺🇸

Unlike traditional markets, which close on weekends, crypto markets operate 24/7, leading to heightened uncertainty over the weekends, especially if a sell-off begins on a Friday.

In recent years, weekend volatility has generally decreased, but the increased concentration of trading during weekdays raises the risk of sharp price swings on weekends during market stress.

For instance, last week, Bitcoin 🪙 dropped by 14% between Monday and Friday.

📌 Conclusions

Liquidity fragmentation is more than just a technical term; it's a real threat capable of causing significant market disruptions.

However, despite the challenges, crypto platforms continue to adapt, investing in infrastructure and reducing the cost of arbitrage opportunities.

During the recent sell-off, BTC-USD and BTC-USDT trades reached record levels on Bybit, and this trend is expected to continue developing.

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🔔 Technology in Formation

Many are talking about the resurgence of interest in military technology and the sudden growth of venture investments in this area. However, when you dig deeper, the real picture is much more complex.

Let’s explore how civilian innovations and startups are changing the rules of the game.

🔍 What Really Lies Behind "Military Technology"?

Bessemer Venture, with its rich history and connection to the inventor Henry Bessemer, reveals in its latest report that modern military technology is not just about traditional weaponry.

Thanks to the significant increase in demand from the military, civilian innovations are attracting venture funding to develop:

⚪️Robots
⚪️Artificial Intelligence
⚪️New Communication Systems

For example, NATO has already allocated a substantial sum of €1 billion to support such projects.

However, the primary interest of these startups remains focused on civilian markets, which are still larger and more promising 📈

🎖 The Evolution of Military Technology

In the 20th century, horses disappeared from battlefields, and in the 21st century, the role of humans on the battlefield may also decrease thanks to technological progress.

Future conflicts may rely more on economies and production capacities than on direct military confrontation.

But what’s especially important is that these changes are being driven not only by military institutions but also by civilian startups, which see huge opportunities for implementing and scaling new technologies.

🪙 High-Yield Investments

Bessemer Venture openly states that government grants create unique conditions for startups.

These grants allow projects to grow without diluting investors' shares 🪪

This kind of support stimulates the development of a wide range of projects that can find applications in both military and civilian sectors.

Thus, civilian technologies are beginning to play a key role in enhancing defense capabilities.

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