On-chain data for the 28th week: 6w8 is a key short-term pressure point, and the market may have to wait until October to truly accelerate its rise

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

Review of this week

From July 8 to July 15 this week, the highest price of Bingtang Orange was around $60324 and the lowest price was close to $54260, with a fluctuation range of about 11.18%.
Observing the chip distribution chart, there are a large number of chips traded around 57000, which will have a certain support or pressure.

• Analysis:
1. 59000-63000 is about 1.21 million pieces;
2. 64000-68000 is about 1.03 million pieces;

• The probability of not falling below 51000～53000 in the short term is 69%;
• The probability of not rising below 61000～64000 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 cutting interest rates in September increased.
4. Fed's Goolsby said: The June inflation report was very good, and one or a series of rate cuts could be considered.
5. Fed's Daly: More convinced that monetary policy easing should be done 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 25 basis point rate cut is 84.6%, and the probability of a cumulative 50 basis point rate cut is 8.1%

Crypto Ecological News

1. ETH ETF issuers are waiting for the (SEC) to provide detailed information on the final documents. The SEC has provided multiple rounds of opinions for issuers to modify the form, each of which takes several weeks. Issuers are beginning to hope that this process may be nearing its end.

2. FOX Businessi?#Eleanor TerrettRietn, 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 said 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, with inflows for 5 consecutive days, totaling nearly $900 million. Fidelity's spot BTC ETF holdings exceeded 180,000 BTC, reaching about 181,221 BTC, worth 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 insights: used to observe our long-term situation; bull market/bear market/structural change/neutral state
Medium-term exploration: used to analyze what stage we are 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 under certain conditions

Long-term insights

• Market chart
• Position structure of long-term participants
• Wallet status of US ETF shares
• Long-term and short-term market overheating and overcooling chart

(Market chart below)

The market reached a high in March this year and then suffered a heavy blow.

The market then repaired for more than four months; this is similar to mid-2021 and mid-2016.

Generally speaking, the longer the rise lasts, the longer it takes to digest in the cyclical industry.

If we follow the historical trend, the repair or recovery will begin in the last one or two months.

(The holding structure of long-term participants in the figure below)

The holding 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 have nearly doubled their chips.
Currently, the main engine of the market is only half used. From this perspective, there is still half of the power to support the market to continue.

(The wallet status of US ETF shares in the figure below)

This reflects the relationship between the market maker receiving additional funds. When the second-level participants buy a large number of shares in the market, the market maker will buy additional chips in the market.
So this will reflect more of the advance amount.

(The following figure shows the long-term and short-term market overheating and overcooling)

The high multiple profit point for long-term market participants is around 68800-69800;
This may be a relatively short-term pressure position in the face of a recovery.
At this position, you need to pay attention to risks and adjust your positions.

Mid-term exploration

• Structural analysis of each price level
• Liquidity supply
• Inactive whale group
• BTC profitable supply BTC exchange trend net position

(Figure below: Structural analysis of each price level)

According to this structural model, the orange line short-term cost is 64,000, the blue line is the market's callback limit area at around 45,000-49,000, and the light brown line is the top of the stock at 68,722.

Of course, 45,000-49,000 is just a callback expectation in space, and the market environment is also affected by the macro environment.

As time goes by, the negative impact of the Fed's speech or policy will continue to decrease.

From the beginning of June to now, the callback time is close to 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 make the expectation of spatial callback fail to work.

The division 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. They complement each other.

(Figure below Liquidity supply)

The liquidity supply has been repaired to a certain extent recently, which may lead to a preliminary solution to the liquidity problem in the market.

(Figure below Inactive giant whale group)

The inactive giant whale group has recently increased its holdings by a small amount, changing the previous rhythm of reducing its holdings.

(BTC profitable supply cycle in the figure below)

Usually, when market expectations are good, when the BTC profit ratio reaches 55%-80%, it may be a good time to buy.

From this perspective, the core of the market's pullback may be the sale of profit-taking, or repricing when expectations weaken.

(The following figure shows the trend of BTC exchange net position)

BTC within the exchange is in a stage of slowing inflow, and the potential pressure on the market may be reduced to a certain extent.

Short-term observation

• Derivatives risk factor
• Option intention transaction ratio
• Derivatives trading 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. Derivatives risk is increasing.

（Figure below: Derivatives risk factor）

ETH risk factor has moved from the green area last week to the lower part of the neutral area. At the same time, it was mentioned last week that the market has the conditions for short squeeze from the risk factor alone, but the probability is low. At present, the judgment made last week is still maintained, and it is expected to be a continuous shock.

（Figure below: Option intention transaction ratio）

Option trading volume has decreased, and the proportion of put options is in the middle.

（Figure below: Derivatives trading volume）

Derivatives trading volume is at a low level.

（Figure below: Option implied volatility）

Implied volatility has increased significantly.
Sentiment rating: neutral

(Figure below: Profit and loss transfer volume)

The current market panic sentiment (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: New 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, ETH has an outflow accumulation.

(Figure below: Net position of Bingtangcheng Exchange)

BTC exchange net position has a medium inflow accumulation, and there is no sign of digestion of the current inflow chips.

(Figure below: Net position of E-Tai Exchange)

ETH exchange net position is in an outflow accumulation state.

(Figure below: 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.

（Global purchasing power status in the figure below）

Global purchasing power is currently in a state of loss.

（USDT exchange net position in the figure below）

USDT exchange net position has a small inflow.

Off-chain transaction data rating: Willing to buy at 56,000; Willing to sell at 70,000.

（Coinbase off-chain data in the figure below）

Willing to buy at prices around 50,000~56,000; Willing 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 in the figure 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.

Summary of this week:

Summary of news:

· Germany and MtGox addresses are openly selling, and selling pressure continues;
· Inflation is falling, and the Federal Reserve is openly suggesting an opportunity to cut interest rates.
· MtGox has no clear time, and the German address sell-off is nearing its end.
· The positive news of interest rate cuts is dominant; if there is no more news from MtGox, the sell-off 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.

Long-term insights on the chain:

1. The market has faced more than 4 months of repair, correction and downturn. According to previous cycle experience, it may start to recover in 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 flow in positive funds for many consecutive days;
4. 68800-69800 is a relatively short-term key pressure that deserves attention, 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, or it may start to recover within the mid-term.

On-chain mid-term exploration:

1. The space callback expectation has not yet worked, and the time expectation is more urgent;
2. The problem of liquidity loss has improved slightly;
3. The whale group has a small increase in holdings, changing the pace of reduction;
4. BTC may be at a buying node for profit callback;
5. The potential pressure within the exchange has eased slightly.

• Market tone:
Repair, improvement
The liquidity in the market has improved slightly, and there is still a period of emotional recovery, and the pressure has eased.

On-chain short-term observation:

1. The risk factor is in the lower neutral area, and the risk is increasing.
2. The number of newly added active addresses is relatively low.
3. Market sentiment status rating: neutral.
4. The overall net position of the exchange shows that BTC has a medium-sized inflow accumulation, and ETH has an outflow accumulation.
5. The 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%; the probability of not rising below 61,000~64,000 in the short term is 60%.

• Market tone:
The current market sentiment is still in the neutral area. Since the 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 have directional opinions on investment; please be cautious and prevent market black swan risks.

This article is from a contribution and does not represent the views of BlockBeats.

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