Crypto Market Volatility: Institutions Stay Cautious as High-Impact Risk Events Approach | Frontier…

Crypto Market Volatility: Institutions Stay Cautious as High-Impact Risk Events Approach | Frontier Lab Weekly Report

Market Overview

Market General Situation

The cryptocurrency market exhibited a volatile trend this week, with both BTC and ETH showing a fluctuating upward trajectory. The Market Sentiment Index dipped slightly from 42 last week to 41, remaining within the neutral range overall.Stablecoin Market Dynamics

The total market capitalization of stablecoins showed an upward trend, though the overall increase compared to last week was marginal. Both USDT and USDC demonstrated a synchronized rise:

• USDT: Market cap reached $185.7 billion, a week-on-week increase of 0.16%. While the trend of net capital inflows from the previous week, the scale of inflow this week was smaller, amounting to only $300 million. This indicates that capital — dominated by non-US investors — remains relatively cautious.
• USDC: Market cap stands at $78 billion, a week-on-week increase of 0.38%. Although it continued last week’s upward trend, the growth rate dropped significantly to just $300 million, suggesting that US investors also maintained a more cautious stance this week.

Analysis of Market Drivers

• Cautious Balance in Institutional Capital Flows: This week, BTC and ETH spot ETFs and listed treasury companies failed to continue last week’s buying trend. Daily buying and selling volumes were roughly equivalent, maintaining an overall balance. This reflects a cautious “wait-and-see” attitude among most market investors.
• Dual Impact of Federal Reserve Policy: The Fed cut rates as expected at the December meeting. The 2026 interest rate dot plot indicates two future cuts, and the Fed announced the purchase of $40 billion in Treasury bonds via RMP within 30 days. While not conventional QE, this boosted market sentiment. However, Powell’s remarks on the “neutral rate” — suggesting current levels are adequate — dampened expectations for further easing.
• Easing US-China Trade Relations: The US government announced it would allow Nvidia to sell H200 chips to China. This further cooling of US-China trade tensions helps stabilize subsequent market sentiment.
• Concerns Over AI Infrastructure Commercialization: Oracle’s earnings report, which fell short of expectations, reversed market sentiment. This triggered concerns that the monetization cycle for AI infrastructure might be longer than anticipated, leading to widespread profit-taking and price correction across various risk assets.

Policy Expectations and Regulatory Progress

• Acceleration of Crypto Legislation: Multiple crypto bills were introduced this week. The draft of the “CLARITY Act” is set to be released before the weekend, with hearings for amendments and voting scheduled for next week. This advancement of previous legislative processes has boosted market sentiment.
• Continued Improvement in Regulatory Environment: The SEC Chair declared that various types of ICOs should be treated as non-securities transactions and fall outside the SEC’s regulatory scope. This is favorable for improving the fundraising environment for crypto enterprises.
• Intensive Release of Key Macro Data: Next week we will see the release of key data including the US November unemployment rate, seasonally adjusted non-farm payrolls, annual CPI rate, and annual core PCE price index. These will directly influence market expectations for the Federal Reserve’s January meeting.
• High Certainty of Bank of Japan (BOJ) Rate Hike: The BOJ is expected to raise interest rates by 25 basis points on December 19. Although the market has fully priced this in, it will inevitably cause market tremors, and post-hike market trends require close monitoring.

Forecast of Key Events Next Week

• Intense Speculation on Macro Data: The dense release of US macro data will be the focus of trader speculation. The results will directly impact judgments on the Fed’s monetary policy path; market reactions need to be watched closely.
• Policy Shock from the Bank of Japan: While the BOJ rate hike is priced in, its effect of draining global liquidity will determine market price direction in the short term, constituting a significant risk factor.
• High Variability in Institutional Purchasing Power: The purchasing power of treasury companies and spot ETFs was flat this week. Since their activity often follows market trends, the sustainability of their purchasing power remains uncertain against the backdrop of the Japanese rate hike and key data releases.

Market Outlook

• Continuation of Volatile Pattern: The market’s volatile trend this week stems mainly from the cautious balance of institutional flows and the complex interplay of policy expectations. This pattern is likely to persist in the short term.
• Guard Against Policy Risks: The BOJ rate hike and US key data releases next week will be the primary drivers of market volatility. Any shift in policy expectations could trigger drastic fluctuations.
• Maintain a Cautious Defensive Stance: Given the uncertainty of institutional purchasing power and the complexity of the macro environment, the market could quickly shift to “risk-off” mode under the influence of unfavorable data or policy signals. Investors should maintain a cautious attitude, prepare defenses, and strictly control risk exposure to cope with potential short-term market plunges.

Target Forecasts for Next Week

Bearish Targets: VANA, MANTA, ZK

VANA: User Data Sovereignty AI Public Chain Ecosystem Collapse; Fundamental Deterioration Compounded by Massive Unlock Sell Pressure

Project Fundamentals and Positioning

Vana is an EVM-compatible AI public chain focused on the management and governance of user-sovereign data. Its core objective is to establish a distributed network where users can not only own and govern the data they contribute but also profit directly through data monetization.

Severe Deterioration of Fundamental Data

• TVL Continues to Shrink: Vana’s Total Value Locked (TVL) has dropped significantly from an initial $2.97 million to $1.79 million, a decline of 39.73%. This indicates continuous capital outflow from the Vana ecosystem, with the few existing on-chain users gradually withdrawing.
• Extremely Low On-Chain Transaction Activity: Vana’s average daily DEX transaction volume maintains a level of only around $50,000. This extremely low level directly reflects severe insufficiency in on-chain trading activity and minimal user participation.

• Ecosystem Application Revenue Near Zero: Daily revenue from Vana on-chain applications is less than $20, indicating an extremely depressed state. This suggests the ecosystem has essentially lost its user base, with application usage rates approaching zero.
• Continuous Decline in User Activity: Comprehensive analysis of on-chain data shows a general downward trend in user activity within the Vana ecosystem. The on-chain ecosystem is on the verge of recession.

Token Unlock Risk Assessment

• Unfavorable Unlock Scale and Timing: On December 16, 8.55 million VANA tokens will be unlocked. This massive unlock comes at a critical moment when project fundamentals are deteriorating, making the timing extremely unfavorable.
• Severe Lack of Market Absorption Capacity: With VANA’s average daily trading volume at only around $1 million, market liquidity is clearly insufficient to effectively digest the incoming unlocked token volume, which will create significant selling pressure.
• Strong Selling Motivation Among Unlocked Holders: According to the linear unlock schedule, this unlock mainly involves investment institutions and the project team. Given the project is currently in a clear downward cycle, these holders have strong motivation to cash out and will likely choose to sell and exit.
• Weak Liquidity Depth: The relatively small daily trading volume reflects insufficient market depth. It cannot effectively buffer the price shock caused by the token unlock, and the selling pressure will transmit directly to the price level.

Summary

The Vana project faces multiple systemic risks. On the business front, TVL has shrunk by 39.73%, daily DEX volume is only $50,000, on-chain app revenue is under $20, and ecosystem user activity is in comprehensive decline. On the capital front, the imminent unlock of 8.55 million VANA tokens on December 16 will create significant selling pressure in a market with weak liquidity (daily volume of only $1 million). Furthermore, the unlocking parties are investment institutions and the team, who have strong motivations to cash out. These overlapping negative factors constitute continuous downward pressure on the VANA token price, making it difficult to reverse the bearish trend in the short term.

MANTA: Total Ecosystem Decay Amidst Privacy Sector Application Dilemmas; 98% Capital Withdrawal Highlights the Collapse of the Modular Narrative

Project Fundamentals and Positioning

Manta Network is a modular ecosystem focused on building privacy protection for Web3, consisting of two main parts: Manta Atlantic and Manta Pacific. Manta Atlantic is an underlying L1 designed for verifying private on-chain identities, featuring extremely high performance and fast local proof generation capabilities. Manta Pacific is an Ethereum-based L2, providing a scalable and low-cost Gas fee environment for EVM-native ZK applications. Manta is dedicated to providing users with end-to-end privacy protection through Zero-Knowledge Proof technology, while balancing interoperability, convenience, high performance, and auditability.

Core Operating Metrics in Comprehensive Decline

• TVL Massive Contraction: Manta Network’s TVL has plummeted from a peak of $667 million to $11.56 million, a decline of as much as 98.26%, reflecting that users are withdrawing from the Manta Network on-chain ecosystem on a massive scale.
• Continuous Stablecoin Outflows: The market cap of on-chain stablecoins has dropped to a historical low of $8.53 million, indicating that capital is continuously withdrawing from the Manta Network ecosystem.
• On-Chain Activity Near Stagnation: Manta Network’s daily on-chain gas fee revenue is only around $60, reflecting extremely low user frequency; the chain has almost entered a dormant state.
• DEX Trading Volume Continues to Slide: Daily on-chain DEX trading volume is currently only around $170,000. Volume has basically vanished and shows a continuous downward trend, indicating severe insufficiency in ecosystem activity.
• Meager Ecosystem Project Revenue: Daily revenue for DApps on Manta Network is only about $500, reflecting that the entire ecosystem is in an extremely depressed state.

Circulating Supply Shock and Sell Pressure Warning

• Large Unlock Scale: On December 18, 15.67 million MANTA tokens will be unlocked, accounting for 1.57% of the total locked amount. This massive unlock occurs at a critical point where project fundamentals are continuously deteriorating.
• Severe Lack of Market Absorption Capacity: MANTA token average daily trading volume is only around $1.1 million. Relative to the scale of tokens about to be unlocked, market liquidity is clearly insufficient to effectively digest the selling pressure.
• Strong Selling Motivation Among Unlocked Holders: According to the linear unlock schedule, this unlock mainly involves investment institutions and the project team. Given the project is currently in a clear downward cycle, these holders have strong motivation to cash out and will likely choose to sell and exit.
• Weak Liquidity Depth: The relatively small daily trading volume reflects insufficient market depth, unable to effectively buffer the price shock caused by the token unlock.

Summary

The Manta Network project faces multiple systemic risks. At the market level, application scenarios for the privacy track are limited, and the L2 sector overall is facing a trust crisis, being questioned for exacerbating Ethereum ecosystem fragmentation; the project has failed to establish a differentiated advantage in this track. At the business level, TVL has plummeted by 98.22%, stablecoin funds have dropped to historical lows, on-chain activity is near stagnation, and user activity is extremely low. At the capital level, the imminent unlock of 15.67 million MANTA tokens on December 18 will create significant selling pressure in a market with weak liquidity (daily volume of only $1.1 million). Furthermore, the unlocking parties are investment institutions and the team, who have strong motivations to cash out. These overlapping negative factors constitute continuous negative pressure on the MANTA token price. It will be difficult to reverse the downward trend in the short term, and the project already exhibits characteristics of ecosystem decay.

ZK: Collapse of the Layer 2 Scaling Narrative; Death Spiral Amidst Comprehensive On-Chain Data Failure

Project Fundamentals and Positioning

ZKsync is a Layer 2 scaling solution based on Ethereum, aimed at increasing the transaction speed and reducing transaction costs of the Ethereum network through Zero-Knowledge Proof technology. ZKsync utilizes the Rollup architecture to process transactions off-chain, and then submits the results in the form of a Zero-Knowledge Proof to the Ethereum mainchain for verification, thereby achieving faster transaction speeds and lower fees while maintaining Ethereum’s security.

Comprehensive Decline in On-Chain Operational Data

• Massive Capital Withdrawal: ZKsync’s TVL has plummeted from a high of $273 million to $38.53 million, a drop of up to 85.88%. This indicates that the majority of capital has withdrawn from the ZKsync ecosystem, and on-chain liquidity is severely depleted.

• On-Chain Transaction Activity Near Stagnation: ZKsync’s on-chain DEX trading volume continues to decline, currently maintaining only around $900,000/day. This reflects extremely low user frequency, and the on-chain trading ecosystem has essentially lost its vitality.
• Meager Gas Fee Revenue: ZKsync’s daily gas fee revenue is only about $1,300, and the total ecosystem DApp revenue is only $15,000/day. This core metric directly reflects that there is virtually no actual usage demand on the chain, exhibiting characteristics of a “dead chain.”

• Extremely Low User Activity: Although ZKsync has a total of 10.82 million accounts, there are only about 8,700 active accounts, an activity rate of less than 0.1%. Furthermore, the number of new accounts continues to decline, indicating that users are gradually withdrawing from the ZKsync ecosystem.

• Stablecoin Market Cap Hits Historical Low: The market cap of stablecoins on the ZKsync chain has dropped to a historical low of $58.02 million. The continuous downward trend indicates ongoing capital outflow and a further deterioration of the ecosystem’s financial foundation.

Circulating Supply Shock and Sell Pressure Analysis

• Relatively Large Unlock Scale: On December 19, 163.75 million ZK tokens will be unlocked, accounting for 0.87% of the total locked supply. While the proportion is not extremely high, it still constitutes significant pressure in the current market environment.
• Severe Lack of Market Absorption Capacity: ZK token average daily trading volume is only about $4.8 million. Relative to the scale of tokens about to be unlocked, market liquidity is clearly insufficient to effectively digest the selling pressure, which will impact the price.
• Strong Selling Motivation Among Unlocked Holders: According to the linear unlock schedule, this unlock mainly involves investment institutions and the project team. Given the project is currently in a clear downward cycle, these holders have strong motivation to cash out and will likely choose to sell and exit.

Summary

The ZKsync project faces multiple systemic risks. At the market level, the Layer 2 sector overall is facing a trust crisis, with its scaling value being questioned; the project has failed to establish a differentiated advantage in the fiercely competitive L2 space. At the business level, TVL has plummeted by 85.88%, daily trading volume is only $900,000, Gas fee revenue is meager, and active users account for less than 0.1%, signifying a complete loss of its basic functionality as a blockchain network. At the capital level, the imminent unlock of 164 million ZK tokens on December 19 will create significant selling pressure in a weak liquidity market with a daily trading volume of only $4.8 million. Furthermore, the unlocking parties are investment institutions and the team, who have strong motivations to cash out. These overlapping negative factors constitute continuous negative pressure on the ZK token price. The project already exhibits the typical characteristics of a “dead chain,” making it difficult to reverse the downward trend in the short term.

Token Unlock Schedule Next Week (Unlock Value > $1 Million)

Market Sentiment Index Analysis

The Market Sentiment Index dropped from 42 to 41. BTC rose by 1.97% this week, ETH rose by 5.28% this week, and TOTAL3 fell by 1.67% this week. Altcoins generally remain in the neutral range.

Next Week’s Key Crypto and Macro Events

• Monday (December 15): US SEC Public Roundtable on Crypto Privacy and Financial Surveillance.
• Tuesday (December 16): US November Unemployment Rate; US November Non-Farm Payrolls (Seasonally Adjusted).
• Thursday (December 18): US November CPI Annual Rate (Unadjusted); US Initial Jobless Claims for the week ending December 13.
• Friday (December 19): Bank of Japan Target Rate (until December 19); US December Michigan Consumer Sentiment Index (Final); US November Core PCE Price Index Annual Rate.

Sector Performance

Based on weekly return statistics, the SocialFi sector performed the best, while the Depin sector performed the worst.

• SocialFi Sector: TON and CHZ hold significant proportions in the SocialFi sector, totaling 96.35%. Their weekly changes were 1.76% and 8.16% respectively. Since TON accounts for a large share (89.15%) within the SocialFi sector and was on an uptrend this week, the SocialFi sector performed the best overall.
• Depin Sector: FIL, RENDER, IOTA, HNT, THETA, and AR hold significant proportions in the Depin sector, totaling 83.81%. Their weekly changes were: -10.71%, -5.56%, 0.81%, -6.32%, 1.17%, and -4.86% respectively. It can be seen that the decline in most of the major projects in the Depin sector was greater than in projects from other sectors, causing the Depin sector to perform the worst.

Summary

The cryptocurrency market exhibited a volatile trend this week, with BTC and ETH recording gains of 1.97% and 5.28% respectively. The Market Sentiment Index slipped from 42 to 41, remaining in the neutral range but showing weak characteristics overall. Capital flow changes in the stablecoin market reflect investor caution: USDT’s market cap grew marginally by 0.16% to $185.7 billion, continuing net capital inflow but at a scale of only $300 million, significantly lower than last week, reflecting a relatively cautious attitude from non-US investors. USDC’s market cap grew by 0.38% to $78 billion, with an increase of only $300 million; this substantial drop in growth indicates that US investors also adopted a more conservative strategy this week. The cautious balance in institutional capital flows was the core reason for the market’s volatility this week. Spot ETFs and treasury companies failed to continue last week’s buying trend, with buying and selling largely flat. This, coupled with the dual impact of Federal Reserve policy and concerns over AI infrastructure commercialization, created a complex, interwoven pressure on the market.

Although the sustained improvement in the regulatory environment and the acceleration of crypto legislation provided some support to the market, investors must remain highly vigilant regarding the intensive risk events scheduled for next week. The Bank of Japan’s expected 25 basis point rate hike on December 19, while largely priced in, will have a short-term effect of draining global liquidity that will determine the market price direction. Simultaneously, the intensive release of key macro data, including the US November unemployment rate, non-farm payrolls, CPI annual rate, and core PCE price index, will directly influence market expectations for the Federal Reserve’s January meeting, becoming the focus of trader speculation. Of particular concern is the high uncertainty regarding the sustainability of institutional purchasing power. Changes in institutional flows often follow market trends; should unfavorable data or policy signals emerge, they could quickly shift to a risk-off mode, forming a negative feedback loop.

Considering the current market environment, investors are advised to adopt a cautious and defensive strategy. Although the improving regulatory environment and policy expectations offer some support, the market faces multiple overlapping risk factors in the short term, including the BOJ rate hike, the release of critical US data, and uncertainty in institutional capital flows. Investors should closely monitor next week’s macro data releases and the BOJ policy decision, as these events will directly determine the market’s direction. In the current complex macro environment, maintaining a cautious attitude, strictly controlling risk exposure, and preparing for possible short-term market plunges will be the prudent choice.