Original title: "After more than 4 months of correction and downturn, is the market about to recover? ｜WTR 7.15"
Original source: WTR Research Institute
Weekly Review
This week, from July 8 to July 15, the highest price of Bingtang 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 chips traded around 57,000, which will have a certain support or pressure.
• Analysis: 1. 59,000-63,000, about 1.21 million pieces; 2. 64,000-68,000, about 1.03 million pieces;
• The probability that the price will not fall below 51,000-53,000 in the short term is 69%; • The probability that the price will not rise below 61,000-64,000 in the short term is 60%.
Important news
Economic News
1. On Thursday, the annual rate of US CPI was 3%, lower than the expected value of 3.1%; 2. The core CPI was 3.3%, lower than the expected value of 3.4%; the monthly rate of CP1 was negative -0.1%. 3. After the data was released, the probability of the Fed's interest rate cut in September increased. 4. Fed's Goolsbee said: The June inflation report was very good, and one or a series of interest rate cuts can be considered. 5. Fed's Daly: More convinced that it is better to relax monetary policy sooner rather than later, and some policy adjustments may be necessary. 6. At present, 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
1. ETH ETF issuers are waiting for the SEC to provide details on the final documents. The SEC has provided multiple rounds of comments for issuers to revise the forms, each of which takes several weeks. Issuers are beginning to hope that the process may be nearing its end.
2. 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.
3. 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.
4. 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.
5. On July 12, the U.S. spot BTC ETF had a net inflow of $79 million on July 11, and inflows continued for 5 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.
6. 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 insight: 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 situation we will face Short-term observation: used to analyze short-term market conditions; and the possibility of certain directions and certain events occurring under certain conditions
Long-term insights
• Market trend chart • Long-term players' holding structure • US ETF share wallet status • Long-term and short-term market overheating and overcooling charts
(Market trend chart below)
The market peaked in March of this year and then suffered a severe setback.
The market then underwent a four-month correction; this was 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 position structure of long-term participants is the key engine of the market; they determine the probability of market collapse, and during this period, participants with three to five years of holding nearly doubled their chips. Currently, only half of the main engine of the market is 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 reflects more the relationship between the market maker receiving additional funds. When the secondary participants buy a large number of shares in the market, the market maker will purchase additional chips in the market. Therefore, 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 position in the face of market recovery. At this position, you need to pay attention to risks and adjust your positions.
Mid-term exploration
• Analysis of price structure • Liquidity supply • Inactive whale group • BTC profit supply BTC exchange trend net position
(The figure below shows the price structure analysis)
According to this structural model, the orange line is the short-term cost of 64,000, the blue line is the market's pullback limit area at around 45,000-49,000, and the light brown line is the stock top of 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.
(The following figure shows the 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.
(The following figure shows the trend of BTC exchange net positions)
The inflow of BTC into the exchange is slowing down, and the potential pressure on the exchange may be reduced to a certain extent.
Short-term observation
• Derivatives risk factor • Option intention transaction ratio • Derivatives transaction volume • Option implied volatility • Profit and loss transfer volume • New addresses and active addresses • Bingtangcheng exchange net position • Yitai exchange net position • High-weight selling pressure • Global purchasing power status • Stablecoin exchange net position • 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 is a large increase in implied volatility. Sentiment 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 a low level. Spot and selling pressure structure rating: BTC has a medium inflow accumulation, and ETH has an outflow accumulation.
(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 a willingness to buy at prices 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 a willingness to buy at prices around 50,000~56,000; there is a willingness to sell at prices around 70,000.
(Bitfinex off-chain data below)
There is a willingness to buy at prices around 50,000~54,000; there is a willingness to sell at prices around 70,000.
This week’s summary:
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 for interest rate cuts. · MtGox has no clear time, and the selling of the German address is nearing the end. · The positive news of interest rate cuts is dominant; if there is no more news from MtGox, then the selling may end and the relative bottom will be established. · The probability of interest rate cuts in September has increased, but the crypto market suffered a big blow in June and July, and the expected brewing effect of interest rate cuts may be discounted. · The real acceleration of the market may be after October. · As the crypto market becomes larger and larger, the demand for funds to be nurtured is also increasing. How much this round can reach is relatively unknown.
On-chain long-term insights:
1. 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 begin to recover within the next 2 months; 2. Long-term participants have more than doubled their holdings in this stage, and the market engine has only consumed more than half of it at present; 3. ETFs have begun to inflow positive funds for many consecutive days; 4. 68,800-69,800 is a key pressure that deserves attention in the relatively short term, and it is also a high-multiple profit area for long-term participants.
• Market tone: The market may have entered the late mid-term stage and may start to recover within the medium term.
On-chain mid-term exploration:
1. The expected spatial callback has not yet taken effect, and the time expectation is more urgent; 2. The problem of liquidity loss has improved slightly; 3. The whale group has increased its holdings slightly, changing the pace of reducing holdings; 4. BTC may be at a buying node for a profit callback; 5. The potential pressure within the exchange has eased slightly.
• Market tone: There has been a slight improvement in the repair and improvement of on-site liquidity. There is still a period of emotional recovery and pressure has eased.
On-chain short-term observations:
1. The risk factor is in the neutral to lower area, and the risk is increasing. 2. The number of newly added active addresses is relatively low. 3. Market sentiment rating: neutral. 4. The overall net position of the exchange shows that BTC has a medium inflow accumulation and ETH has an outflow accumulation. 5. Global purchasing power is in an outflow state, and the purchasing power of stablecoins is the same as last week. 6. Off-chain transaction data shows that there is a willingness to buy at 56,000; there is a willingness to sell at 70,000. 7. The probability of not falling below 51,000~53,000 in the short term is 69%; among them, the probability of not rising above 61,000~64,000 in the short term is 60%.
• Market tone: 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 article is contributed by a contributor and does not necessarily represent the views of BlockBeats.
