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Weekly Review
This week, from March 14 to March 20, the highest price of Sugar Orange was around $28,483 and the lowest was close to $23,888, with a fluctuation range of about 19%.
Observing the chip distribution chart, there are a large number of chips traded around $28143, which will provide certain support or pressure.
analyze:
$23,000 ~ $29,500, approximately 1.68 million pieces;
$18,500 ~ $22,500, about 2.7 million pieces;
The probability that the price will not fall below $18,000 ~ $20,000 in the short term is 72%.
Important news
Economic News
The U.S. PPI producer price index fell 0.1% month-on-month in February, lower than the expected 0.3% and the previous value of 0.7%;
The year-on-year growth rate was 4.6%, lower than the expected value of 5.4% and lower than the previous value of 6.0%. It was the lowest year-on-year growth rate since March 2021.
The core PPI, excluding food, energy and trade, grew by 0% month-on-month, lower than the expected 0.4% and the previous value of 0.5%;
The U.S. CPI grew 6% year-on-year in February, in line with expectations of 6%, lower than the previous value of 6.4%, marking the eighth consecutive month of decline and the lowest since September 2021.
Core CPI grew 5.5% year-on-year, in line with expectations of 5.5% and lower than the previous value of 5.6%. It has fallen for the sixth consecutive month, the lowest since December 2021;
The core CPI grew by 0.5% month-on-month, slightly higher than the expected 0.4% and the previous value of 0.4%, reaching the highest level in five months, and inflation remained resilient.
This week, the Federal Reserve launched the Bank Term Funding Program (BTFP) emergency financing tool to provide loans for up to one year to banks that pledge U.S. Treasury bonds, agency debt, mortgage-backed securities (MBS) and other eligible assets.
Eleven banks, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, have placed a total of $30 billion in uninsured deposits with First Republic Bank.
International credit rating agency Moody's downgraded the rating outlook of the entire US banking system from stable to negative.
Moody's has downgraded Signature Bank's (SBNY) bonds to junk status and will remove its future ratings;
Six U.S. banks were placed on a watch list for possible future downgrades, including First Republic Bank (FRC), Zions Bancorp (ZION), Western Alliance Bancorp (WAL), Comerica Inc (CMA), UMB Financial Corp (UMBF) and INTRUST Financial.
The European Central Bank announced a 50bps interest rate hike, which is the sixth consecutive rate hike by the European Central Bank.
Credit Suisse's credit default swap (CDS) prices rose to their highest level since the 2008 financial crisis as investors worried about the bank's risk of default.
Credit Suisse Group borrowed 50 billion Swiss francs from the Swiss National Bank through secured loans and short-term liquidity loans to enhance liquidity;
UBS Group AG held talks over the weekend about acquiring part or all of Credit Suisse.
In January, domestic holdings of U.S. Treasuries decreased by US$7.7 billion from the previous month, marking the sixth consecutive month of reduction in holdings of U.S. Treasuries. Total holdings hit a new low since May 2010 for five consecutive months.
Since May last year, holdings have been below $1 trillion for nine consecutive months.
In January, Japan held the largest amount of U.S. debt, followed by China.
This week, both U.S. oil and Brent oil fell to their lowest levels since the end of 2021; gold prices rose to their highest level since April 2022, and recorded the biggest weekly gain in three years.
Encrypted ecological news
On April 12, E-Ethereum launched the Shanghai upgrade on the mainnet, which will enable withdrawals of staked E-Ethereum.
Fidelity Investments, the world's fourth-largest mutual fund company, has officially opened up cryptocurrency trading exposure to retail investors, allowing them to purchase Bitcoin and Ethereum directly in their stock trading client without commission.
Stablecoin issuer CNHC Group has completed a $10 million Series A+ round of financing, led by KuCoin Ventures and participated by IDG Capital. (1:1 linked to offshore RMB)
This week, Tether issued 1 billion USDT on the Tron network and the Ethereum network respectively, totaling 2 billion USDT.
This week Circle redeemed $2.9 billion in USDC and minted $700 million in USDC.
CB has announced a new strategic partnership with Standard Chartered Bank that will allow Singapore customers to transfer funds in or out through the local bank.
CB: We have been working with the U.S. Commodity Futures Trading Commission (CFTC) to get our derivatives platform online as soon as possible, which will be a big event in the U.S. crypto market.
CME Group: Launches trading in bitcoin futures contracts, offering payouts based on specific events, providing investors with a fully regulated exchange to enter the candied orange market.
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
The proportion of new funds and long-term investors' accumulation
Network-wide profit percentage
Overall spot selling pressure
Derivatives Short Squeeze Model
(The following figure shows the proportion of new funds and long-term investors)
The current total amount of short-term funds or new funds is not large, and there is not much inflow trend.
The accumulation of long-term investors has reached a historical high. Judging from the holding structure, the overall situation is somewhat similar to that in 2016 and 2019.
(The following figure shows the percentage of profit of the entire network)
The profit percentage of the entire network has reached a high level in more than half a year. In the future, there may be more selling pressure coming from the impact of profit-taking.
Whenever the profit percentage reaches a network-wide high, it often means that the market will face the risk of a large pullback.
(The figure below shows overall spot selling pressure)
The overall spot selling pressure is still okay and has not reached the level of 2016 and 2019.
The market is healthier than it was then from a spot selling pressure perspective.
In addition to the squeeze from spot purchases by long-term participants, the impact of derivatives is equally important in driving market growth.
(The figure below shows the derivatives short squeeze model)
Purple Line: Derivatives Short Squeeze Index
One of the main factors behind the market's growth from early March to now is the short squeeze in derivatives.
Similarly, the short squeeze of derivatives is also extremely important to observe and pay attention to from different perspectives in the future.
The reverse blind obedience of the bears may become the fuel for the market to rise.
Short squeeze is also extremely important in the next short and medium term.
Mid-term exploration
Non-zero balance address
On-site liquidity support belt
Positive sentiment on the Internet
Long-term and short-term chips step by step
Accumulation trend points
Short-term profit takers and short-term players
On-site growth: There are signs of recovery, above the liquidity support band
(Figure below shows the number of addresses with non-zero balance)
Blue area: non-zero balance address change rate
Red line: number of addresses with non-zero balance
During the period of depression and despair in the market at the price of 16,000, the total number of addresses on the chain did not see much growth.
But when the market's short squeeze movement began, the price attracted new users to enter the market.
The current growth may be a confidence-building boom.
Of course, the growth in the market may represent the willingness of some long-term funds, although the market has been positively affected by the sentiment of derivatives.
But on the other hand, perhaps the future market cannot be without the participation of derivatives.
(The following figure shows the liquidity support belt on the market)
Yellow area: Market price > short-term participant cost
Red area: the difference between market price and short-term cost
Blue line: Short-term participant supply
When observing the liquidity of short-term participants, we cannot ignore the overall supply, which plays a more critical role here.
It can be observed from the yellow area that once short-term participants are in a state where market price > current price, they may enter a more comfortable state, because they are on average in a "floating profit". Participants anchored by the floating profit may be more willing to hold the chips in their hands.
In other words, the current risk of liquidity collapse in the market may not have occurred yet.
However, once it falls below their cost line, it may cause a certain degree of panic, and then some new funds will be needed to replenish the supply in the market.
Application:
This supply status can be used to observe the emotional state of on-site liquidity and serve as a warning line for judging medium-term risks.
Of course, it is necessary to measure the selling pressure in the market, and this model only serves as a warning.
(Figure below: Network sentiment positivity)
The trading sentiment on the chain has rebounded well. Judging from the current actions in the market, it may still take some time before it slows down.
Group status rating: The distribution of short-term and long-term chips is relatively balanced, and large addresses with a size of 1-10k hold a large amount of coins
(The following figure shows the long-term and short-term chips in steps)
As can be seen from the above figure,
From the perspective of cost anchoring, the current price may be in a state of relative balance between long-term and short-term weights. When the overall selling pressure is not released in the market, the weights of short-term and long-term are not too clear. Of course, from a micro perspective, long-term chips are still slightly more than short-term chips.
On the other hand, the chips in the vicinity are still relatively scarce. Even if the market is at the upper edge of the overall liquidity support band, it is still necessary to obtain information from the chip structure. In a shrinking environment, it may be healthier for the chips to stay here and transfer safely.
At the same time, judging from the chip chart of "This Week in Review", 26770 may be the support level formed by the current upward movement of chips, which may determine the key dividing line in the medium term.
(The following figure shows the accumulation trend)
From the accumulation trend, we can see that:
Large addresses of 100-1k and 1-10k hold more coins, and the performance of other addresses is relatively normal.
These two groups hold very important weights, and their movements may affect the future behavior of the market.
Since the depth here is relatively shallow, if these two groups hold such a large amount of coins, they may be the "decisive" groups in the short and medium term.
(The following figure shows short-term profit taking and short-term participants)
Currently, short-term participants have entered a state of structural profit squeeze.
More than 95% of short-term traders are in a profitable state, and the current funds may encounter structural resistance in the process of pushing the market upward.
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: reaching the danger zone, risks have increased.
(The figure below shows the risk factor of derivatives)
Last week, as the derivatives risk factor fell, there was a round of violent short squeeze. This week, the derivatives risk factor has reached the danger zone, indicating that the pressure of long liquidation will increase.
(The figure below shows the option intention transaction ratio)
Last week, as prices rose, option trading volume decreased sharply and the long-short ratio fell slightly, but remained at a high level.
(Figure below shows derivatives trading volume)
(The figure below shows the implied volatility of options)
The increased fluctuations in option implied volatility reflect the increased activity of option traders in the current market and their increased willingness to place bets.
Emotional state rating: Neutral to cautious
(The following figure shows the amount of profit and loss transfer)
The current loss transfer volume is at a low level. The profit transfer volume continued to rise last week with the price, and has now fallen slightly. This shows that the current market sentiment may be neutral and cautious. The market has no obvious buying and selling direction, and needs to wait for more signals or events to guide the market trend.
(Figure below shows newly added addresses and active addresses)
The overall number of new and active addresses is high, indicating that the current market activity level is good.
Spot and selling pressure structure rating: more chips are flowing in and the market selling pressure is increasing.
(Figure below: Net position of Bingtang Orange Exchange)
At the current price, the net position of the Sugar Orange Exchange is in a state of large inflow accumulation, indicating that the selling pressure in the spot market has begun to increase.
(The following figure shows the net position of E-Tai Exchange)
Etai’s current exchange net position is in a net outflow state.
(Figure below shows high-weight selling pressure)
There is no high-weight selling pressure at present.
Purchasing power rating: Global purchasing power increases, while stablecoin purchasing power decreases.
(Figure below shows the global purchasing power status)
After a sustained loss of global purchasing power, purchasing power in all regions turned positive last week, with Europe performing the strongest.
(The following figure shows the net position of USDC exchanges)
USDC has been outflowing in large quantities, and the collapse of Silicon Valley Bank has caused the purchasing power of the stablecoin it represents to decline. Currently, USDC has not yet restored its peg to the US dollar.
(The following figure shows the net position of USDT exchanges)
The outflow of USDT has not stopped, but its continued issuance on the chain has increased its market share in the stablecoin market, and the purchasing power weight of the stablecoin it represents has increased.
Off-chain transaction data rating: There is a willingness to buy at the price of 25450, and there is a willingness to sell at the price of 29000.
(The following figure shows Coinbase off-chain data)
There is willingness to buy at 23770 and 24850;
There is a willingness to sell at the prices of 29000, 30000 and 31000.
(Binance off-chain data in the figure below)
There is willingness to buy at the price of 25450;
There is a willingness to sell at the prices of 28500, 29000 and 29300.
(Bitfinex off-chain data in the figure below)
There is a willingness to sell at the 29100 price level.
This week’s summary:
Summary of news:
Faced with a series of bankruptcies in the past week, in order to avoid triggering a potential domino effect, the Federal Reserve’s emergency rescue tool BTFP created new liquidity, which the market interpreted as a disguised QE.
This week's PPI data was weak, the core CPI monthly rate was still high, the risks in the banking industry continued, and the market has not yet fully digested them. The Fed's task of curbing inflation has become more complicated, and whether there will be an interest rate hike next week has become an unknown.
The market predicts that March or May may be the last month for rate hikes, and there may be a rate cut within the year.
When the bank risk broke out this time, safe-haven funds not only flowed into gold, but also into Bitcoin and Bitcoin. People's inner anchors have changed.
On-chain long-term insights:
Long-term investors have accumulated to a historical high. Judging from the holding structure, the overall situation is somewhat similar to that in 2016 and 2019.
The profit percentage of the entire network has reached a high level in more than half a year. In the future, more selling pressure may come from the impact of profit-taking.
The overall spot selling pressure has not reached the level in 2016 and 2019, which is relatively healthy compared with the previous two time periods;
One of the main factors for the market's growth from early March to now has become the short squeeze of derivatives, and the blind obedience of short sellers has become the fuel for market growth.
Market setting:
The current situation is similar to the structure in 2016 and 2019.
What needs to be paid attention to is whether long-term participants quickly exit the market and whether there is a short squeeze in derivatives. This determines whether the market structure and trend is similar to that of 2016 or 2019.
On-chain mid-term exploration:
There is still good growth in the market;
The current support level of the chips has shifted to 26770, which may be a more critical position in the medium term;
Currently above the liquidity support band, the model may have certain benchmark value in the medium term;
The market may not be currently entering a slowdown;
The long and short positions are relatively balanced here, with slightly more long positions;
The 100-1k and 1k-10k groups hold a relatively large amount of coins, and their behavior may be of "decisive significance" in the short to medium term;
Short-term traders are once again experiencing a "structural profit squeeze".
Market setting:
Wandering
The depth here is relatively shallow, and there is a possibility that a large group can control the direction. At the same time, it is at the point where the profit structure is squeezed, so we need to be vigilant against larger-scale fluctuations in the medium term.
Strategy advice: Be wary of volatility; strategies with high risk control weights may be more suitable.
On-chain short-term observations:
The risk factor of derivatives has reached the dangerous zone, and the pressure of long liquidation has increased;
Derivatives trading volumes were moderately low; derivatives traders began to wait and see;
The overall market sentiment is neutral to cautious;
Exchange data shows that the inflow of chips is accumulating and the selling pressure is increasing;
Global purchasing power is recovering, while stablecoin purchasing power is losing;
The purchasing power weight of stablecoins represented by USDT increases;
Off-chain transaction data shows that there is a willingness to buy at 25,450 and a willingness to sell at 29,000;
The probability that the price will not fall below $18,000 ~ $20,000 in the short term is 72%.
Market setting:
The market is facing uncertainty and lacks a clear trading direction. Investor sentiment is neutral to cautious, and the level of selling pressure has increased.
Strategic advice: It is better to adopt a defensive strategy.
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:
Golden Egg Diary; Elk Will Not Get Lost; Forex Broker; Tangyuan; Xibei; KitKat
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