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Weekly Review
This week, from July 1 to July 8, the highest price of Sugar Orange was around $63,861 and the lowest was close to $53,485, with a fluctuation range of about 16.25%.
Observing the chip distribution chart, there are a large number of chip transactions around 55,000, which will have certain support or pressure.
analyze:
59000-63000: about 1.24 million pieces;
64000-68000: about 1.11 million pieces;
The probability of not falling below 51,000-53,000 in the short term is 53%;
The probability that it will not rise below 61,000-64,000 in the short term is 70%.
Important news
Economic News
The Congressional Budget Office reported two weeks ago that it expects the U.S. budget deficit to increase by 27% to $1.9 trillion next year.
The minutes of the Federal Reserve meeting showed that several participants said that if inflation persisted at a high level or rose further, interest rate hikes might be needed; the vast majority of members believed that economic growth was gradually cooling down and the Federal Reserve was waiting for more information to gain confidence in cutting interest rates.
ActivTrades analysts said gold prices rose while the dollar fell, mainly after Federal Reserve Chairman Powell acknowledged that inflation is finally moving in the right direction, while today's data showed a cooling in labor demand. Powell's remarks raised traders' expectations that the Fed will cut interest rates shortly after the end of the summer.
On Friday, the U.S. announced the unemployment rate for June, which was 4% in the previous month and expected to be 4%; the non-farm employment in June was 272,000 in the previous month and expected to be 190,000.
The U.S. unemployment rate was 4.1% in June, the highest since November 2021, and non-farm employment fell sharply.
Encrypted ecological news
On July 4, according to EmberCN data, an address marked as "German Government" transferred 1,300 BTC to centralized platforms.
Steve Kurz, head of Galaxy Digital Asset Management, said the U.S. Securities and Exchange Commission may approve a spot ETH ETF by the end of July and is optimistic about more cryptocurrency ETFs.
QCP Capital said that concerns about large-scale BTC sales after MtGox compensation may exacerbate bearish sentiment. MtGox will begin compensating customer assets in July, which may bring selling pressure to both markets. It is expected that the price will rise to $150,000 after the MtGox compensation is completed.
Matrixport said that as the total market value dropped from US$2.7 trillion to US$2.3 trillion, the daily trading volume of cryptocurrencies also dropped from US$180 billion to US$50 billion. There is a saying in traditional finance: "Don't short a depressed market."
Because any little momentum can push prices higher, this could also apply to the crypto market, as the market could see a rebound during the summer doldrums given multiple possible stimulus factors (such as the Fed’s rate cuts, the U.S. election, etc.).
The correlation between BTC and the S&P 500 index fell to 0.05, indicating market differentiation. In the past five years, the two have been highly positively correlated. In early 2024, both rose significantly. Since 2019, BTC and the S&P 500 index have increased four times. A negative correlation occurs, each indicating local lows in BTC price.
Richard Galvin, co-founder of hedge fund Digital Asset Capital Management, said that if weak U.S. economic data stimulates people to bet on the Federal Reserve to ease monetary policy, sentiment in the cryptocurrency market may shift and boost market sentiment.
On July 5, MtGox continued to send BTC to the creditor's address. Lawyer Nobuaki Kobayashi said: MtGox has begun to repay some creditors with BTC and BCH through some designated cryptocurrency platforms. Data shows that MtGox has sent 1200, 1544, 2702, 1545, and 47228 BTC to the new address. Many creditors said that they have received BTC/BCH repaid by MtGox.
Justin Sun said that he was willing to negotiate with the German government to purchase all BTC in an off-market manner to minimize the impact on the market. On July 4, Sun's address sent 30 million USDT to Bitfnex. From July 2 to date, Sun's three addresses have sent a total of 80 million USDT to the exchange.
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
Position structure of participants in different age groups
New additions and destruction of chips on the chain
Illiquid Whale Positions
Total spot selling pressure
(The following figure shows the holding structure of participants in different age groups)
Looking at the overall market from here, the selling by long-term participants has not accelerated, and those who have been in the market for one to two years have already begun to continue to increase their holdings.
The continuous increase in holdings by long-term participants is the key to market stability and even the key to continuous upward prices.
(The following figure shows the addition and destruction of chips on the chain)
From this point of view, the new chips on the entire chain have not increased, but the destroyed chips have increased. The market is currently relatively sluggish, and there has not been a significant increase in real gold and silver chips.
(Figure below shows illiquid whale positions)
Illiquid whales showed a little selling, which may be slightly related to the recent compensation event and the German government's selling. If there is no subsequent accelerated selling, it is not a big problem and we need to pay close attention to this data.
(Figure below: Total spot selling pressure)
If we consider the short-term right side safety, we may have to wait until the total spot chip selling pressure drops to the green range.
The haze in the market has not yet been cleared and it takes time to digest it.
Mid-term exploration
Analysis of short-term holder behavior
Accumulation trend points
Liquidity Supply
BTC exchange trend net position
BTC Profitable Supply Cycle
(The figure below shows the cost structure analysis of short-term holders)
The red and blue lines are the lower and upper limits of the cost for short-term participants.
Yellow line: Average cost of short-term participants
The following inferences can be drawn regarding the cost distribution of short-term participants:
(1) The cost of short-term participants may be related to the changes in bull and bear markets. For example, in the market from the second half of 2022 to the beginning of 2023, the short-term cost was below the market price for a long time, which may be a signal of surrender.
(2) When the market price falls below the short-term cost lower limit, it may indicate a low point adjustment area or an area where short-term participants formally surrender;
(3) The upper limit of the market can be calculated by the cost of short-term participants. The market price may be 35%-50% higher than the cost of short-term participants, which will be the relative limit of market profit. Of course, all conditions for calculating the upper and lower limits of the market are subject to stock conditions. If the market is in an incremental state, market capitalization growth, liquidity and other factors increase, many theoretical calculations about the upper limit may fail.
(The following figure shows the accumulation trend)
In the current accumulation trend, the whale addresses with 1k-10k and less than 10k show signs of slowing down, while the large addresses with 100-1k show accumulation and increase in holdings, and the current score is around 0.6.
It is possible that the main players in the current market accumulation are large investors, and the market accumulation situation is still in the process of recovery, so that the state of the entire market is not particularly stable.
(Figure below shows liquidity supply)
From the perspective of liquidity supply, the recent rate of liquidity reduction is slowing down.
If the situation continues to improve, the market will show a certain degree of recovery, which still needs to be observed.
(Figure below shows the trend of BTC exchange net positions)
There is still a large amount of BTC accumulated within the exchange, creating a large potential selling pressure, and the differences within the market are still continuing.
(Figure 2: BTC Profitable Supply Cycle)
After a sharp correction, the current market profitability has dropped below 80%.
If the impact on earnings is alleviated, the pressure of earnings selling that causes the market to continue to slide downward may be relatively alleviated.
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 green zone. Derivatives have low risk.
(The figure below shows the risk factor of derivatives)
ETH's risk factor is still in the green zone. Although there are conditions for short squeeze, the probability is low. The current market is still expected to continue to fluctuate.
(The figure below shows the option intention transaction ratio)
There was a large increase in option trading volume, and the put option ratio was in the middle.
(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)
At present, the most panic period in the market has passed, and the panic sentiment (orange line) has reached a turning point this week. At the same time, the positive sentiment in the market (blue line) has also continued to decline. It is expected that the market will show more continuous fluctuations.
(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)
BTC exchange net positions have seen a moderate inflow accumulation.
(The following figure shows the net position of E-Tai Exchange)
ETH exchange net positions continue to outflow.
(Figure below shows high-weight selling pressure)
There is no high-weight selling pressure at present.
Purchasing power rating: Global purchasing power as a whole is in a state of outflow, while the purchasing power of stablecoins has rebounded significantly.
(Figure below shows the global purchasing power status)
The current purchasing power in the Americas is the same as last week and is still in a state of loss. The market is more volatile during this period.
(The following figure shows the net position of USDT exchanges)
USDT exchange net positions saw moderate outflows.
Off-chain transaction data rating: There is a willingness to buy at 53,000; there is a willingness to sell at 70,000.
(The following figure shows Coinbase off-chain data)
There is a willingness to buy at a price around 50,000~53,000;
There is a willingness to sell at prices around 70,000.
(Binance off-chain data in the figure below)
There is a willingness to buy at a price around 50,000~53,000;
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 50,000~53,000;
There is a willingness to sell at prices around 70,000.
This week’s summary:
Summary of news:
The interest rate swap market has once again fully priced in two rate cuts from the Federal Reserve before the end of the year.
From employment to economic data, the overall economic situation is cooling down. What remains is to pay further attention to the CPI data in the next one to two months, which will determine whether there will be one or two interest rate cuts this year. If the data is relatively positive, that is, CPI falls again, the market may have expectations of two interest rate cuts.
Whether from the macro perspective or from the evolution of the cycle, the current price is relatively low if we extend the time period.
The current market sentiment is quite panicky, partly due to the issue of compensation and partly due to the issue of government selling. This form of panic needs to wait for the market to be squeezed. Once the sentiment is squeezed, it will slowly return to a normal level, and then undergo a secondary price repair based on future expectations and cyclical evolution.
On-chain long-term insights:
Long-term players have started to accumulate again, mainly those with 1-2 years of experience;
There is no real money and silver chips being created, which means that the real new forces are not yet fully in place;
Whales are selling relatively slowly;
From the perspective of safe buying on the right side, it may take a little while.
Market setting:
The haze in the market has not been completely eliminated, and it will take time and more funds to slowly digest it.
On-chain mid-term exploration:
The current market is below the short-term cost price and is in the adjustment area;
The main players in the market accumulation are large investors, and the accumulation status may still need to be repaired;
The rate at which liquidity supply is decreasing is slowing down;
There is still a lot of potential selling pressure accumulated in the market;
BTC's profitability is declining, and the profit impact on the market may slow down.
Market setting:
Adjustment and testing
The market still needs to resume accumulation and gradually digest the impact of potential selling pressure, which will bring challenges to the market.
On-chain short-term observations:
The risk factor is in the green area and the risk is low.
The number of newly added active addresses is at a relatively low level, and the market activity is low.
Market sentiment status rating: Neutral.
The overall net position of the exchange shows that BTC has a moderate amount of inflow accumulation and ETH has an accumulated outflow.
Global purchasing power as a whole is in a state of outflow, and the purchasing power of stablecoins has rebounded significantly.
Off-chain transaction data shows that there is a willingness to buy at 58,000 and a willingness to sell at 70,000.
There is a willingness to sell at 70,000. The probability that the price will not fall below 51,000-53,000 in the short term is 53%; the probability that the price will not rise below 61,000-64,000 in the short term is 70%.
Market setting:
After a round of decline, the current market sentiment has turned from panic to neutral. Since 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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