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Weekly Review
This week, from May 6 to May 13, the highest price of Sugar Orange was around $6550 and the lowest was close to $60187, with a fluctuation range of about 8%.
Observing the chip distribution chart, there are a large number of chip transactions around 60,000, which will have certain support or pressure.
analyze:
59000-63000: about 1.14 million pieces;
64000-68000: about 800,000 pieces;
The probability of not falling below 57,000-61,000 in the short term is 82%;
The probability that it will not rise below 71,000-74,000 in the short term is 72%.
Important news
Economic News
On May 9, the Bank of England announced its interest rate decision, keeping the benchmark interest rate unchanged at 5.25% for the sixth consecutive time. Bank of England: 7 people voted to keep the interest rate unchanged, and 2 voted to cut the interest rate.
Bank of England forward guidance: The risk of persistent inflation is weakening. Bank of England Governor Bailey said: CPI is expected to be close to the target level in the next two months, and the optimistic thing is that things are moving in the right direction.
On Friday, the minutes of the ECB's April meeting showed that several members believed that the conditions for a rate cut had been met in April, and if wage and inflation data remained at their current relatively mild levels, the next move would be a rate cut, most likely on June 6.
ECB Executive Board member Elderson said: If the outlook for consumer prices is confirmed by the latest quarterly forecasts, the ECB is "very likely" to cut interest rates at its June meeting, and he believes the central bank is likely to take that step.
The number of initial jobless claims in the United States for the week ending May 4 was 231,000, the highest since the week ending August 26, 2023. The weakening momentum in the job market has brought the Federal Reserve's two interest rate cut plans this year back to the negotiating table. Financial markets expect the Fed to begin its easing cycle in September.
Bank of America cited EPFR data: In the most recent week, bond funds attracted $17.8 billion in inflows, the largest weekly inflow since July 2021; stocks attracted $14.8 billion in inflows, the largest inflow in 6 weeks; cash inflows were $67.8 billion, cryptocurrencies inflows were $100 million, and gold outflows were $700 million.
Encrypted ecological news
According to CCData’s report, cumulative trading volume in spot and derivatives markets fell 43.8% to $6.58 trillion. The decline was due to unexpected macroeconomic data and negative net flows of U.S. spot BTC ETFs, causing major crypto assets to give up their gains in March.
According to 13F information filed with the U.S. Securities and Exchange Commission, U.S. Bancorp and Rothschild & Co. purchased approximately $20 million in spot BTC ETFs in the first quarter.
Analyst Rekt Capital said the altcoin market has been hit hard over the past month, with the market capitalization of altcoins excluding the top ten cryptocurrencies falling more than 21% to $265 billion last month.
BTC fell for the fifth consecutive trading day, the longest losing streak since October last year, and spot ETFs have seen net outflows of $169 million so far this month, with overall net inflows of $11.8 billion.
British Economy Minister Bim Afolami said the UK government is likely to pass stablecoin and staking legislation in the coming weeks, but will outline more later, calling the two things "absolute priorities" in the coming weeks and months.
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
Total selling pressure on the chain
Grayscale ETF Net Position
Long-term participants' position structure
Long-term participant loss and profit costs
(Figure below shows the total selling pressure of spot on the chain)
The total spot selling pressure on the chain has reached a stage point, which means that if the market may not be in a bear market, then it is either in a volatile or slow bull market relative to the future.
They all have a certain suggestive function, which is to confirm the market's periodic low point.
(Figure below: Grayscale ETF net position)
There was no selling of Grayscale's ETF positions on the last trading day, and the selling is currently decreasing.
The current ETF selling in the market comes from BlackRock.
(The figure below shows the long-term participants’ holding structure)
Long-term participants begin to make new holdings. They tend to sell their chips at the peak or high point of the bull market, and tend to collect chips in the bear market.
Therefore, these groups play a decisive role in prices and markets.
Currently, participants with a 3-5 year period are the main buyers of food in the market.
(The figure below shows the loss and profit expenses of long-term participants)
🔵 LTH Realized Price shows the average acquisition price of the queue.
🔵 LTH pricing range represents the price levels at which LTH holds significant profits (150% and 350%) or losses (-25%).
When the price moves above or below these levels, it usually results in heavy selling by this group.
🟩 Take profit when LTH is holding 350%+ profit and the selling rate is high at the moment.
🟥 Capitulation as LTH holds -25%+ losses and selling is high right now.
At present, these key points can be used as a reference;
Long-term holders' cost basis is currently: $20,510
Long-term participants lose 25% at $15,383
150% profit for long-term participants: $30,766.
Long-term participants 350% profit: about $71,787
If the market moves upward in the future, the 350% profit of long-term participants, which is around 71,800, needs to be paid special attention to, as it may be the psychological pressure point of the market.
The holding cost for long-term participants often means one of the bottom prices in a bear market, and it also needs to be paid attention to in future bear markets.
Mid-term exploration
Cost-to-output profit ratio: 1 day - 6 months
Positive sentiment on the Internet
Realized capital within 1 month
Exchange Trend Net Position
(Figure below: Cost-output profit rate: 1 day - 6 months)
Green area: The short-term supply of 1-6 months generates a positive growth in the cost-output profit margin
The statistical method of the cost-output profit ratio (SOPR) is the ratio of the realized value to the value at the time of creation, that is, the selling price/initial price.
When the market is dominated by profit supply, the overall transaction status will be upward.
Through this model, we can observe the rising cycle of the market. When the market enters the green zone, it means that profit supply is dominant.
When leaving the profit supply range, the market may have lost new buying liquidity and will enter a relative consolidation position.
At that time, it might be better to observe the existing stock market.
(Figure below: Network sentiment positivity)
The online sentiment is in the process of slowing down and declining.
The overall weakening liquidity in the market may be in the consolidation stage.
(The figure below shows the realized real capital within one month)
The meaning of realized real capital is the product of the number of chips and their cost, which is the total amount of funds actually injected into the market.
The value has been in a downward trend in the past month, which may mean that the short-term funds in the market are decreasing.
This will lead to a shortage of funds in the market, and put the market in an area of competition for existing stocks, that is, liquidity contraction, which is only temporarily alleviated at present.
(Figure below shows the trend of net positions on exchanges)
The exchange is currently gradually reducing inflows.
At the same time, the overall situation is also entering a state of weak accumulation.
Maybe the venue is also in a period of exchanging time for space.
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 neutral area. The risk of derivatives is moderate.
(The figure below shows the risk factor of derivatives)
BTC continues its volatile trend, and the current risk factor is in a neutral zone. Judging from the risk factor alone, the volatile trend may continue this week.
(The figure below shows the option intention transaction ratio)
Both option trading volume and put option ratio are at relatively low levels.
(Figure below shows derivatives trading volume)
Derivatives trading volumes returned to low levels.
(The figure below shows the implied volatility of options)
Implied volatility fell slightly.
Emotional state rating: Neutral
(The following figure shows the amount of profit and loss transfer)
The continued volatility of the market has not caused panic selling, and the market's positive sentiment is also at a low level. The current price has come to the short-term holder cost line near 60K, and this week we will continue to pay attention to the panic of loss.
(Figure below shows newly added addresses and active addresses)
New and active addresses are at low levels.
Spot and selling pressure structure rating: The overall situation is in a state of accumulated outflow, and the selling pressure is relatively low.
(Figure below: Net position of Bingtang Orange Exchange)
Currently, the overall situation is still in a state of accumulated outflow.
(The following figure shows the net position of E-Tai Exchange)
The second cake is currently in an outflow accumulation state.
(Figure below shows high-weight selling pressure)
There is no high-weight selling pressure at the moment.
Purchasing power rating: Global purchasing power has been lost in large quantities, and the purchasing power of stablecoins has remained basically the same.
(Figure below shows the global purchasing power status)
Currently, global purchasing power is in a state of massive loss.
(The following figure shows the net position of USDT exchanges)
USDT net position remained flat overall.
Off-chain transaction data rating: There is a willingness to buy at 60,000; there is a willingness to sell at 65,000.
(The following figure shows Coinbase off-chain data)
There is willingness to buy at prices around 56,000, 58,000, and 60,000;
There is a willingness to sell at prices around 65,000 and 70,000.
(Binance off-chain data in the figure below)
There is willingness to buy at prices around 59,000 and 60,000;
There is a willingness to sell at prices around 65,000.
(Bitfinex off-chain data in the figure below)
There is a willingness to buy at a price around 60,000;
There is a willingness to sell at prices around 65,000.
This week’s summary:
WTR public real trading section:
Starting from February, the actual status of funds will be disclosed on a regular basis every month.
Strategy: prudent strategy.
Initial capital amount: US$240,000.
Current funding: US$275,800.
Yield: 15%
Summary of news:
Overall analysis of the relationship between policy expectations and market changes.
At the beginning of 2023, the Federal Reserve showed a tendency to cut interest rates, and cryptocurrencies subsequently saw a sharp rise;
At the beginning of 2024, the market expected the Federal Reserve to cut interest rates six times throughout the year, and cryptocurrencies subsequently rose to new highs.
In April, six rate cuts were reduced to one or two, and the market fell.
The crypto market currently relies on the mainstream market, and the corresponding monetary policy will give rise to the same direction of market movements.
At present, after experiencing the initial excitement of the interest rate cut discussion, we are waiting for the confirmation of the time of the rate cut in order to enter the bull market in the era of monetary easing (Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley believe that the Fed will cut interest rates on July 31).
Historically, summers have generally been a quiet season for cryptocurrencies.
In a high-interest rate environment, the size of U.S. money market funds has reached new highs several times, rising to $6.03 trillion.
Once the interest rate is cut from 5.5% to 2.5%, money market funds will look for new investable targets, such as risky assets, gold, and crypto assets, which will once again give birth to better market conditions.
In the short term, pay attention to CPI on Wednesday.
On-chain long-term insights:
The total spot selling pressure shows that the market has reached a stage low;
Grayscale ETF, however, did not see any selling in the last trading day;
Participants who hold coins for 3-5 years are the main buyers and eaters in the current market;
Then the 35% profit of long-term participants, which is around 71,800, needs to be paid special attention to, as it may be the psychological pressure point of the market.
Market setting:
The selling pressure decreased and the market began to accumulate slowly.
On-chain mid-term exploration:
The market is in the process of supply arrangement;
The liquidity in the market gradually decreases and weakens;
Lack of capital injection from participants within 1 month;
The weak accumulation state enters a period of exchanging time for space.
Market setting:
Shock bottoming out
The market is in a state of slight accumulation with weak liquidity, and a change in the stock market is needed.
On-chain short-term observations:
The risk factor is in the neutral area and the risk is moderate.
The number of newly added active addresses is in a relatively low range, and the market activity is at a low level.
Market sentiment status rating: Neutral.
The overall net position of the exchange showed an accumulated outflow state, and the selling pressure was relatively low.
Global purchasing power is being lost in large quantities, and the purchasing power of stablecoins remains the same.
Off-chain transaction data shows that there is a willingness to buy at 60,000 and a willingness to sell at 65,000.
The probability that it will not fall below 57,000-61,000 in the short term is 82%; the probability that it will not rise below 71,000-74,000 in the short term is 72%.
Market setting:
The overall market sentiment is neutral at present. Although the selling pressure is at a low level, the market activity and purchasing power are relatively insufficient. The current market is once again fluctuating and testing the price range near the cost line of short-term holders. The short-term market may be brewing a change, so you need to pay attention to the risks.
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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