Crypto Market Enters Adjustment: WLFI Token Launch and Stablecoin Settlements Hit Record High
In the week of August 25–31, the crypto market entered an adjustment phase. The crypto market saw Bitcoin (BTC) fall sharply, altcoins decline, and liquidity peak during Trump-related token activity. Ethereum (ETH) drew attention despite net $1.4 billion outflows—the highest since March. Macro liquidity improved amid expectations that the Fed will cut rates twice this year and four times next. Among top 300 tokens, ULTIMA, CRO, and QTUM led gains while KTA, QUBIC, and CTC saw declines. Trump family’s DeFi project WLFI plans its 20% initial token release at $0.015–$0.05 on September 1. On-chain data shows the MVRV-ZScore at 2.5, indicating holders are at a loss. Futures funding rates are normal at 0.01%, with open interest dropping as major funds exit and a bullish bias with a 1.8 long-short ratio. Global stablecoin supply reached $277.8 billion (+0.1% WoW). USD1, WLFI’s stablecoin, grew 10% to $2.7 billion, ranking seventh. USDT and USDC flows increased on Polygon, MNT, AVAX, and HYPE chains. North America leads stablecoin usage at 38%, followed by Europe at 37% and Asia at 16%.
Bearish
The weekly report highlights a significant market correction, with Bitcoin and most altcoins declining while institutional capital exits evidenced by $1.4 billion ETH outflows and reduced futures open interest. The MVRV-ZScore of 2.5 signals that holders are overall at a loss, and liquidity peaked during WLFI-related activity—often marking local tops. Though WLFI token issuance and record stablecoin settlements suggest continued on-chain innovation, the prevailing downward trend and high net outflows point to bearish short-term sentiment. Historically, similar patterns of rate-cut expectations and large ETF inflows followed by sharp pullbacks, such as in early 2021 corrections, have led to extended market consolidations. In the long term, macro liquidity improvements and Fed rate cuts could provide support, but traders should remain cautious until clear reversal signals emerge.