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This report is provided by the "WTR" Research Institute: Members' Twitter ID: Golden Egg Diary @jindanriji; Elk will not get lost @crypto_elk_; Forex Brother; Xibei @Asterismone;
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Weekly Review
This week, from July 8 to July 15, the highest price of Sugar Orange was around $60,324 and the lowest price was close to $54,260, with a fluctuation range of about 11.18%.
Observing the chip distribution chart, there are a large number of chip transactions around 57,000, which will have certain support or pressure.
analyze:
59000-63000: about 1.21 million pieces;
64000-68000: about 1.03 million pieces;
The probability of not falling below 51,000-53,000 in the short term is 69%;
The probability that it will not rise below 61,000-64,000 in the short term is 60%.
Important news
Economic News
On Thursday, the annual rate of US CPI was 3%, lower than the expected value of 3.1%;
The core CPI was 3.3%, lower than the expected value of 3.4%; the monthly CP1 rate was negative -0.1%.
After the data was released, the probability of the Federal Reserve cutting interest rates in September increased.
Fed's Goolsbee said the June inflation report was excellent and that a single rate cut or a series of rate cuts could be considered.
Fed's Daly: More convinced that easing monetary policy should be done sooner rather than later, and some policy adjustments may be necessary.
Currently, the probability of interest rates remaining unchanged by September is only 7.3%, the probability of a cumulative interest rate cut of 25 basis points is 84.6%, and the probability of a cumulative interest rate cut of 50 basis points is 8.1%.
Encrypted ecological news
ETH ETF issuers are waiting for details from the Securities and Exchange Commission (SEC) on final filings. After multiple rounds of comments on issuers’ revised forms, each of which takes several weeks, issuers are beginning to hope that the process may be nearing its end.
FOX Business i#EleanorTerrettRietn, CFTC Director Behnam said that an Illinois court confirmed that BTC and ETH are digital commodities under the Commodity Exchange Act, and 70-80% of the crypto market is non-securities.
QCP Capital stated that the CPI data attracted everyone's attention, and the optimism has not yet been digested by the cryptocurrency market. The German government transferred 10,000 BTC to exchanges and market makers yesterday. The address now holds only 15,000 BTC, while it initially held 50,000 BTC in mid-June, indicating that supply pressure may have eased.
On July 12, the address marked as "德" transferred out 5248.2 BTC, leaving only 3846 BTC on the address. At the current rate, it may sell all BTC in the next 1-2 days.
On July 12, the U.S. spot BTC ETF had a net inflow of $79 million on July 11, with inflows for five consecutive days, totaling nearly $900 million. Fidelity's spot BTC ETF holdings exceeded 180,000 BTC, reaching about 181,221 BTC, with a value of about $10.5 billion.
JPMorgan Chase (JPM) said in a research report that cryptocurrency liquidations should weaken this month and the market is expected to rebound from August. The bank said the decline in reserves could be the result of creditors of Gemini or MtGox liquidating BTC, or the German government selling BTC.
Long-term insights: used to observe our long-term situation; bull market/bear market/structural change/neutral state
Mid-term exploration: used to analyze what stage we are currently in, how long this stage will last, and what situations we will face
Short-term observation: used to analyze short-term market conditions; the possibility of certain directions and certain events occurring under certain conditions
Long-term insights
Market chart
Long-term participants’ holding structure
Wallet Status of US ETF Shares
Long-term and short-term market overheating and overcooling chart
(Market trend chart below)
The market peaked in March of this year and then suffered a severe setback.
The market then underwent a recovery that lasted more than four months; this is similar to mid-2021 and mid-2016.
Generally speaking, the longer the rise lasts, the longer it takes to digest in cyclical industries.
If historical trends are followed, repair or recovery will begin in the next one or two months.
(The following figure shows the holding structure of long-term participants)
The holding structure of long-term participants is the key engine of the market;
They determine the probability of a market collapse, and during this period of time three to five years participants have nearly doubled their chips.
Currently, the main engine of the market is only half used. From this perspective, there is still half of the power to support the market to continue.
(The following figure shows the wallet status of US ETF shares)
This more reflects the relationship between market makers receiving additional funds. When secondary participants buy a large number of shares in the market, market makers will purchase additional chips in the market.
So this will reflect more of the advance amount.
(The following figure shows the long-term and short-term market overheating and overcooling)
The high profit point for long-term market participants is around 68,800-69,800;
This may be a relatively short- to medium-term pressure point for the market as it faces recovery.
At this point, you need to pay attention to risks and adjust your positions.
Mid-term exploration
Analysis of price structure
Liquidity Supply
A group of giant whales that have never moved
BTC Profitable Supply BTC Exchange Trend Net Position
(The figure below shows the price structure analysis)
According to this structural model, the orange line represents the short-term cost of 64,000, the blue line represents the market's pullback limit at around 45,000-49,000, and the light brown line represents the stock top at 68,722.
Of course, 45,000-49,000 is just a spatial correction expectation, and the market environment is also affected by the macro environment.
As time goes by, the negative impact of the Fed's speeches or policies will continue to decrease.
From the beginning of June to now, the callback time is nearly one and a half months. Historically, the empirical time range of BTC's callback cycle is basically within 2-3 months.
Therefore, the urgency of time may cause the expectation of a spatial correction to fail to work.
Dividing them into time and space is just a separation of perspectives for expectation management. It does not mean that there is an inherent contradiction between the two. Rather, they complement each other.
(Figure below shows liquidity supply)
The liquidity supply has been restored to a certain extent recently, which may lead to a preliminary solution to the liquidity problem in the market.
(The picture below shows a group of giant whales that have never moved)
The inactive group of whales have recently increased their holdings slightly, reversing their previous pace of reducing their holdings.
(Figure 2: BTC Profitable Supply Cycle)
Usually, when market expectations are good and the BTC profit ratio reaches 55%-80%, it may be a good time to buy.
From this perspective, the core of the market's correction may be profit-taking sales, or repricing when expectations weaken.
(Figure below shows the trend of BTC exchange net positions)
The BTC inflow within the exchange is in a stage of slowing down, and the potential pressure within the exchange may be reduced to a certain extent.
Short-term observation
Derivatives Risk Factor
Option intention transaction ratio
Derivatives Trading Volume
Option Implied Volatility
Profit and loss transfer
New addresses and active addresses
Net Position of Bingtang Orange Exchange
Net position of the Auntie Exchange
High-weight selling pressure
Global purchasing power status
Stablecoin exchange net positions
Off-chain exchange data
Derivatives rating: The risk factor is in the lower-neutral area. The risk of derivatives is increasing.
(The figure below shows the risk factor of derivatives)
The ETH risk factor has moved from the green area last week to the lower neutral area. At the same time, it was mentioned last week that the market has the conditions for a short squeeze judging from the risk factor alone, but the probability is low. We still maintain last week’s judgment and expect continued volatility.
(The figure below shows the option intention transaction ratio)
Options volume fell, with the put option ratio at a mid-range level.
(Figure below shows derivatives trading volume)
Derivatives trading volumes were at low levels.
(The figure below shows the implied volatility of options)
There has been a massive increase in implied volatility.
Emotional state rating: Neutral
(The following figure shows the amount of profit and loss transfer)
The current market panic (orange line) and positive sentiment (blue line) have both declined, and the overall market sentiment is still neutral. If the positive sentiment does not show much in the future, it is still expected to continue to fluctuate.
(Figure below shows newly added addresses and active addresses)
New and active addresses are at low levels.
Spot and selling pressure structure rating: BTC has medium inflow accumulation, ETH has accumulated outflow.
(Figure below: Net position of Bingtang Orange Exchange)
There is a moderate accumulation of net positions in BTC exchanges, and there is no sign of digestion of the current inflows.
(The following figure shows the net position of E-Tai Exchange)
ETH exchange net positions are in an outflow accumulation state.
(Figure below shows high-weight selling pressure)
There is no high-weight selling pressure at present.
Purchasing power rating: Global purchasing power is in an outflow state as a whole, and the purchasing power of stablecoins is the same as last week.
(Figure below shows the global purchasing power status)
Global purchasing power is currently in a state of loss.
(The following figure shows the net position of USDT exchanges)
USDT exchange net positions saw a small inflow.
Off-chain transaction data rating: There is a willingness to buy at 56,000; there is a willingness to sell at 70,000.
(The following figure shows Coinbase off-chain data)
There is willingness to buy at a price around 50,000~56,000;
There is a willingness to sell at prices around 70,000.
(Binance off-chain data in the figure below)
There is willingness to buy at a price around 50,000~56,000;
There is a willingness to sell at prices around 70,000.
(Bitfinex off-chain data in the figure below)
There is a willingness to buy at a price around 50,000~54,000;
There is a willingness to sell at prices around 70,000.
This week’s summary:
WTR public real trading section:
Starting from February 2024, the actual status of funds will be disclosed on a regular basis every month.
Strategy: prudent strategy.
Initial capital amount: US$240,000.
Current funds: 281,700 USD. Rate of return: 17.37%
In the near future, an additional 120,000 US dollars will be added, bringing the total funds to 401,700 US dollars.
Summary of news:
Germany and MtGox addresses are openly selling, and selling pressure continues;
Inflation is falling, and the Federal Reserve is clearly indicating the opportunity to cut interest rates.
MtGox did not specify when the sell-off at the German address was nearing its end.
The positive impact of interest rate cuts is dominant; if there is no more news from MtGox, the sell-off may end and a relative bottom will be established.
The probability of a rate cut in September has increased, but the crypto market suffered a severe blow in June and July, so the expected effect of the rate cut may be discounted.
The market may really accelerate after October.
As the crypto market becomes larger and larger, the demand for funds required is also increasing. It is relatively unknown how much this round will achieve.
On-chain long-term insights:
The market has been facing a period of repair, correction and downturn for more than 4 months. According to the experience of previous cycles, it may start to recover in the next 2 months.
Long-term participants have more than doubled their stakes in 3-5 years at this stage, and the market engine has only consumed more than half of its power at present;
ETFs began to see positive inflows for multiple days in a row;
68800-69800 is the key pressure worthy of attention in the relatively short term, and it is also a high-multiple profit area for long-term players.
Market setting:
The market may have entered the late mid-term stage and may start to recover within the medium term.
On-chain mid-term exploration:
The expectation of a spatial correction has not yet worked, and the expectation of time is even more urgent;
The problem of liquidity leakage has improved slightly;
The whale group increased its holdings slightly, changing its pace of reducing holdings;
BTC may be at a buying node for a profit-taking pullback;
There was a slight relief of underlying pressure within the exchange.
Market setting:
Repair and Improvement
There has been a slight improvement in liquidity in the market, and there is still a period of emotional recovery and pressure has eased.
On-chain short-term observations:
The risk factor is in the lower neutral area, and the risk is increasing.
The number of newly added active addresses is relatively low.
Market sentiment status rating: Neutral.
The overall net position of exchanges shows that BTC has a moderate inflow accumulation and ETH has an outflow accumulation.
Global purchasing power as a whole is in a state of outflow, and the purchasing power of stablecoins is the same as last week.
Off-chain transaction data shows that there is a willingness to buy at 56,000 and a willingness to sell at 70,000.
The probability that it will not fall below 51,000-53,000 in the short term is 69%; the probability that it will not rise below 61,000-64,000 in the short term is 60%.
Market setting:
The current market sentiment is still in a neutral zone. As market purchasing power and positive sentiment have not recovered, the market is expected to remain volatile this week, and the probability of a sustained sharp decline is low.
risk warning:
The above are all market discussions and explorations and do not provide any directional opinions on investment; please be cautious about and prevent market black swan risks.
This report is provided by the "WTR" Research Institute.
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