Signs of recovery in the crypto market are emerging, exploring the next hot tracks.

Recently, the traditional financial market has shown positive signals, and the crypto market has also welcomed a phase of recovery. In July, the U.S. CPI data was lower than expected at 8.5%. Compared to the record high of 9.6% last month, it has declined, indicating that inflationary pressures have eased.

From the perspective of wealth loss, this year's crypto market has been more severe than any previous bear market in history. The Luna collapse in May wiped out $60 billion in market value, triggering a chain reaction. The price crashes of Bitcoin and Ethereum led to a crisis for the hedge fund Three Arrows Capital, and in June, the crypto market evaporated another $10 billion, resulting in the bankruptcy of several large CeFi institutions.

However, it is unlikely that such a large-scale sell-off will occur again in the short term, and this round of bottom may become a strong support in the future. The correlation between the crypto market and traditional financial markets has reached a historical high, but recently the risk appetite has returned, and there are signs of recovery in the crypto market. There may be a period of sideways fluctuations ahead, especially as Bitcoin's rebound may be slower than that of altcoins, which may have a clearer narrative.

On the technical side, the S&P 500, Nasdaq, and other indices have restored a bullish structure on the weekly chart, with prices breaking through the recent high points before the accelerated decline. Compared to the rebound in April, the current upward strength and pattern are clearer. However, the daily chart is approaching a strong resistance zone, which may lead to a pullback, or it could be an excellent buying opportunity. The key support is around 4080.

The market expects the Federal Reserve to achieve a "soft landing," but challenges such as high interest rates, high debt, and high inflation still persist. The recent rebound is attributed to improvements in employment and inflation data, but there are still many uncertainties and risks. Most people remain relatively optimistic about the economic outlook and do not believe that a global financial crisis similar to that of 2008 will recur.

In the next 4-5 weeks, the market may first decline and then rise, digesting the impacts of major events such as the Ethereum merger and the Federal Reserve's interest rate meeting. If next month's employment and inflation data perform well, the pullback is not expected to be too strong. However, the market is emotional, and adequate liquidity must be ensured while waiting for clearer signals.

Ethereum has recently outperformed, beating Bitcoin and other large-cap coins. Layer 2 network tokens like OP are worth paying attention to. Currently, Ethereum is the main target for major players betting on the merger, with a narrative that is better than Bitcoin. The independence of the crypto market is rising, showing a clear differentiation. Buying Ethereum below $1800 can be considered, unless it falls below the support of $1650. A breakthrough of $2000 is expected before the merger.

Dogecoin and Shiba Inu coin have recently strengthened, which may indicate that a new round of market activity is about to arrive. These two tokens are primarily driven by community sentiment and often lead the way before significant market movements. Technically, they have broken through the upper boundary of the range, so it is essential to pay attention to whether they can hold effectively. Google Trends data shows that interest is still relatively low and has not yet reached a peak.

As a representative public chain that can handle all transactions at layer one, Solana's recent network upgrade is expected to improve user experience. Technically, $48.5 is a key resistance level, and a breakthrough will lead to a rapid increase. Support is in the $40-42 range.

Chilliz is widely applied in the sports and entertainment sectors, collaborating with several well-known clubs. It is about to launch its own public chain, Chilliz 2.0. Recently, it has shown strong performance, breaking through the downward trend line, with resistance at $0.30 and support at $0.15-$0.17.

Sudoswap, as an AMM platform for NFT trading, has achieved sales of one-tenth of OpenSea within a month of its launch. The potential for future growth remains significant.

Overall, the worst period for the market may have passed. New lows are unlikely to occur before the Ethereum merger, but risk hedging is still needed. Bitcoin lacks new narratives in the short term and can serve as a hedging tool. Once the market improves, Dogecoin, on-chain options, and MEME coins may benefit first. There are still many opportunities in the metaverse track.

Future hotspots to watch include: Sol 2.0, Optimistic Rollups v2, privacy DeFi, sudoSwap, cross-chain security, on-chain options, zkEVMs, new public chains, cross-chain communication, modular execution, etc. The market is expected to maintain a good state in the coming month. Once the macro environment improves further, it is essential to seize emerging narrative opportunities in a timely manner.