Daily Market Analysis——BTC
The support level of 53268 given by BTC yesterday just received the intraday bottom area. The current rebound range exceeds 3000U+, which has recovered significantly. Before the decline on the 4th, it is suggested that after a 4H adjustment, it is expected to form a staged low area for this callback. Technically, it is not difficult to understand that the big negative line that appears after the continuous decline of the daily line often means that the short-term short energy tends to be exhausted, and rebound and shock upward are high-probability events. Simply from a structural analogy, the low point formed by the decline on August 5 is very similar to the low point formed on July 5. To a certain extent, everyone can refer to the trend of last month to find the sword in the boat. The difference is that the low point of last month was on the line (long side), and the low point this time was on the line (short side). In terms of actual combat, the price rebounded to around 57950 this time, if there is no large-scale breakthrough. The previous bargaining chips should be reduced in production, and the pattern should be taken after the effective breakthrough of 57950, or the rebound should be continued after the second retracement to the lower support. The short-term pressure range is 59630~57950, and the short-term support range is 53268~51463.
Spot Analysis - ETH
The volatility of ETH after the decline is consistent with the market. From the hourly chart, there is still momentum to rise, but the rise after the big negative line is generally not more than two days. In the next 24 hours, we should pay attention to the decline after the rise. The short-term pressure range is 2661~2745, and the support range is 2368~2296
Spot Analysis——SOL
SOL has always been my most optimistic mainstream coin, no doubt about it. Its trend is much stronger than ETH. The current price has rebounded to the lower edge of the 147.5~157.2 area. From the perspective of individual coins, there is no problem with the structure. As long as the market can stay sideways, SOL's daily structure can continue to rise. From a short-term perspective, it is not recommended to chase high prices after the market has risen. Existing short-term chips can take advantage of the opportunity to rise and roll over appropriately. In view of the fact that the market has not yet pulled back and has the potential to rise, SOL's pressure level can be moved up by one range. The medium- and short-term pressure range is 153.8~157.2. There are two buying points. One is the short-term support range of 134.8~131.4, and the other is that after the hourly line breaks through 147.5, you can gamble around 153.8 (about 5% increase)
In-depth research: The subtle relationship between BTC spot ETF and CME's huge short positions!
Recently, there has been a hint of panic in the entire market, which is largely due to the huge short positions of CME. As an old investor in the cryptocurrency circle, I vaguely remember that when CME officially launched BTC futures trading, it just ended the epic bull market in 2017!
Therefore, it is of great significance to study these huge short orders on CME!
First, let me introduce the background: CME refers to the Chicago Board of Trade, which launched BTC futures trading at the end of 2017 with the product code: [BTC1!]. Subsequently, a large number of Wall Street institutional capital and professional traders entered the BTC market, dealing a heavy blow to the ongoing bull market, causing BTC to enter a 4-year bear market. As more and more traditional funds entered the BTC market, institutional traders (hedge funds) and professional traders that CME mainly served began to participate more and more in BTC futures trading. During this period, CME's futures holdings became larger and larger, and last year it successfully surpassed Binance to become the leader in the BTC futures market. As of now, CME's total BTC futures holdings have reached 150,800 BTC, equivalent to approximately US$10 billion, accounting for 28.75% of the entire BTC futures trading market. Therefore, it is no exaggeration to say that the current BTC futures market is not controlled by traditional currency exchanges and retail investors, but has fallen into the hands of professional institutional traders in the United States.
1. CME's huge short positions are likely to be used to hedge spot ETFs. We don't need to panic because of this data.
2. ETFs have received a net inflow of $15.1 billion so far, and it is likely that a considerable portion of the funds are in a hedging state, which explains why the second highest single-day ETF net inflow in history (US$886 million) in early June and the ETF net inflow for the entire week did not lead to a significant breakthrough in the price of BTC;
3. Although CME's short positions are very high, they have already seen a significant increase before the ETF was approved. There was no significant liquidation during the subsequent bull market from $40,000 to $70,000. This shows that there is likely to be funds among US institutional investors that are firmly bearish on BTC, and we should not take it lightly;
4. We need to have a new understanding of the daily net inflow data of ETFs. The impact of net inflows on market prices may not necessarily be positively correlated, and there may also be a negative correlation (large purchases of ETFs lead to a drop in BTC prices);
5. Consider a special case. When the CME futures premium is eaten up by this group of arbitrage systems one day in the future and there is no potential arbitrage space, we will see a significant reduction in CME's short positions, corresponding to which is a large net outflow of ETFs. If this happens, don't panic too much. This is simply the withdrawal of liquidity from the BTC market to find new arbitrage opportunities.
6. The last thought is, where does the premium in the futures market come from? Does the wool really come from the sheep? I may conduct new research on this later. Well, the above is the summary of this research. This issue is biased towards market research and does not have a clear directional guidance, so it cannot be of much help to trading, but it is still very helpful for understanding market logic. After all, when I saw the huge amount of short orders on CME, I was a little scared and even recalled the long bear market from 2017 to 2018. That bear market was much more disgusting than today's volatile market, but fortunately, at present, BTC is indeed favored by traditional capital. To put it bluntly, hedge funds are willing to come to this market for arbitrage, which is essentially a kind of recognition, although the money is paid by us retail investors.
