Week 30 on-chain data: Positive sentiment in the market slows down, ETFs will drive ETH prices up

Original title: "With the Fed meeting imminent, ETH faces pressure to lift the ban, how many negative factors are there? | WTR 7.29"
Original source: WTR Research Institute

Review of this week

This week from July 22 to July 29, the highest price of Bingtang Orange was around $69399, the lowest price was close to $63456, and the fluctuation range reached about 9.73%.
Observing the chip distribution chart, there are a large number of chips traded around 66000, which will have a certain support or pressure.

• Analysis:
1. 59000-63000 is about 1.28 million pieces;
2. 64000-68000 is about 1.32 million pieces;
• The probability of not falling below 57000~61000 in the short term is 82%;
• The probability of not rising below 71000～74000 in the short term is 67%.

Important news

Economic news

1. According to a Reuters survey, 73 out of 100 economists expect the Federal Reserve to cut interest rates by 50 basis points in 2024, 13 believe that the rate will be cut by 25 basis points, and 3 believe that there will be no rate cut.

2. Strategist Donald Hagan said that drawing on the experience of the past 17 interest rate cut cycles, the SP 500 index rose an average of 14% in the year after the Fed's first rate cut, and investors pushed up corporate valuations after the Fed's first rate cut.

3. Analyst Joseph Capurso said that the US second-quarter GDP estimate released on Thursday grew by only 1.6%, and the June personal consumption expenditure inflation data released on Friday may be close to zero. Further weakness in the US economy may increase the Fed's reasons for cutting interest rates this year.

4. Analyst Han Tan believes that if the upcoming GDP and PCE data portray a "Goldilocks" scenario for the US economy, this will enable the Fed to cut interest rates.

5. Barclays strategists: Raise the SP 500 index target for fiscal year 2024 from 5,300 to 5,600.

Crypto Ecosystem News

1. Citigroup raised Coinbase's rating from neutral to buy due to improved regulatory risks, and raised its target price from $260 to $345.

2. Wintermute predicts that the BTC ETF will accumulate about $32 billion by the end of the year.

3. CryptoQuant founder Ki Young released data saying that on July 23, the inflow of ETH long-term holders' addresses reached a record high of 714,000 ETH.

4. Dragonny managing partner Haseeb Qureshi said that the opening trading volume of the ETH spot ETF was very strong, but the price of ETH did not change significantly because Grayscale's ETHE was mainly selling, which would offset a lot of the first-day inflows.

5. Eric Balchunas said that the net inflow of the ETH ETF in the first year is expected to reach $5-6 billion (about 20% of the BTC ETF inflow), with BlackRock and Fidelity being the first choice for most assets.

6. BlackRock's BTC spot ETF IBIT has received more inflows this year than the QQQ ETF tracked by Nasdaq. BlackRock IBIT reported that its BTC spot ETf inflows reached $526.7 million on July 22, the highest single-day inflow since March.

7. MtGox creditors said they have received compensation, and Grayscale's ETH outflows were obviously weaker than the outflows on the first day of its Bitcoin spot ETF listing.

8. Nate Geraci, president of The ETF Store, said: Traditional asset management can no longer ignore cryptocurrency as an asset class, and will see traditional markets actively embrace this field.

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 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

• Positions of various whales
• ETH long-term net position
• Short-term cost line
• 250% profit level for long-term participants

(Below is the position of various whales)

The position effects of major whales show that the market selling pressure has slowed down relatively.
Among them, the head whales have begun to buy again.

（The figure below shows ETH long-term net position）

ETH net position has not changed much. Although the ETF has been approved, the market has not changed much. It may still need a certain degree of opportunity.

（The figure below shows the short-term cost line）

The cost line of short-term participants is around 65,500, which is a point that the market focuses on.
If the market pulls back later, builds a bottom again, etc., it is a very important anchor point.
Generally speaking, this is a pause point for a bull market pullback.

（The figure below shows the 250% profit level of long-term participants）

The 250% profit zone of long-term participants is around 70,000 US dollars, and nearby.
This price may form a short-term pressure and buffer zone.
Market risks can be paid attention to around this, especially after the market gradually weakens.

Medium-term exploration

• Stablecoin supply net position
• Liquidity supply
• Network sentiment positivity
• Structural analysis model of each price level

(Figure below Stablecoin supply net position)

Stablecoins still maintain slow growth, and the current momentum of purchasing power growth may not slow down.

(Figure below Liquidity supply)

Liquidity supply will have a certain supply in the near future when the market is at a low level of correction.
When the market falls continuously, the increase in liquidity supply may determine the balance of supply and demand, as well as the effect of stopping the decline.

（Figure below: Network sentiment positivity）

Network sentiment shows signs of slowing down slightly, which may lead to greater volatility in price range.
Because the current market trend has slowed down to a certain extent, but combined with the increase in the supply of stablecoins, new buyers may intervene in the market.

（Figure below: Price structure analysis model）

According to the light brown line segment shown in the figure, that is, the top of the stock, the price is around 70,500, which is the current stage resistance level.
If the supply of stablecoins can continue to rise, it may break through this price.
Otherwise, based on the calculation of the premium, 71,000-73,000 may be a price that is difficult to break through.
At the same time, the price of 250% profit of long-term chips - 70700 is also a position that needs attention, and there may be a large-scale sell-off of long-term chips.

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 green area. Derivatives have low risk.

(Figure below: Derivatives risk factor)

This week, the risk factors of BTC and ETH diverged, which directly shows that ETH still has potential for short squeeze, but the risk factor of BTC has reached the red area, and it is expected to be more likely to be a volatile market.

（Figure below: Option intention transaction ratio）

Option transaction volume has dropped significantly, and the proportion of put options is at a low level.

（Figure below: Derivative transaction volume）

Derivative transaction volume is at a low level.

（Figure below: Option implied volatility）

Implied volatility has dropped significantly.
Sentiment status rating: Neutral

（Figure below: Profit and loss transfer volume）

Market positive sentiment (blue line) has not continued to increase, and the current positive sentiment has begun to decline slightly. In addition, compared with the previous market surges, the growth rate and volume of market positive sentiment this time are relatively low.

（Newly added addresses and active addresses in the figure below）

Newly added and active addresses are at a low level.
Spot and selling pressure structure rating: BTC has a large amount of inflow accumulation, and ETH has accumulated outflow.

（The figure below is the net position of Bingtangcheng Exchange）

Although BTC has a small outflow at present, the large amount of chips that flowed into the exchange before have not been digested yet.

（The figure below is the 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 has recovered slightly, and stablecoin purchasing power has increased significantly.

（Figure below: Global purchasing power status）

This week, the purchasing power of the Americas is still positive, but after the stimulus of the news, the purchasing power has not continued to increase significantly. Currently, only a small amount of purchasing power remains in the United States and Europe, and Asian purchasing power is still in a state of loss.

（Figure below: USDC exchange net position）

USDC net head is still accumulating in large quantities to exchanges.
Off-chain transaction data rating: Willing to buy at 60,000; willing to sell at 70,000.

(The figure below is the Coinbase off-chain data)

Willing to buy at a price around 60,000;
Willing to sell at a price around 70,000~74,000.

(The figure below is the Binance off-chain data)

Willing to buy at a price around 60,000 and 62,000;
Willing to sell at a price around 70,000~74,000.

（Bitfinex off-chain data in the figure below）

There is a willingness to sell at prices around 70,000~74,000.

Summary of this week:

Summary of news:

1. After digesting the negative news such as MtGox and ETH spot ETF and Germany’s sales;

2. The Federal Reserve’s interest rate meeting on July 30-31, Powell is more likely to be dovish at this meeting, which may pave the way for September.

3. If it follows the U.S. stock market, it should also have no increase

4. In the next year, the spot ETHETF can obtain more than $4 billion in capital inflows from investors. Driven by these capital inflows, the price of ETH will increase by more than 20% in the next 12 months.

5. ETH's short-term Grayscale lifting of restrictions is only temporary, just like BTC, which fell at the beginning and then rose from 40,000 to more than 70,000 US dollars; ETH inflows are not as good as BTC, but they will be more or less similar.

Long-term insights on the chain:

1. The major whales have slowed down their selling, and the largest whale group has begun to buy;

2. ETH net positions have not changed much. Although the ETF has passed, the market demand has not reached a critical point;

3. The short-term cost is around 65,500, which is the key point. The short-term cost is generally one of the bottom areas of the bull market correction;

4. The 250% profit zone of long-term participants is shown at around 70,000 US dollars, which may be one of the pressure stages.

• Market tone:
The market has begun to ease, but it will face new challenges.

On-chain mid-term exploration:

1. Stablecoins still show signs of continued growth;
2. Liquidity supply has temporarily stopped rising;
3. The slowdown in network sentiment may bring a certain amplitude;
4. 70500 is the top of the stock, and 70700 is the high multiple profit of long-term chips;

• Market tone:
Volatility, growth
As market expectations rise, the supply of stablecoins is rising, and the sentiment in the market slows down, there may be a large fluctuation amplitude.

On-chain short-term observation:

1. The risk factor is in the green area, and the risk is relatively low.
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 large amount of inflow accumulation and ETH has accumulated outflow.
5. Global purchasing power rebounded slightly, and the purchasing power of stablecoins increased significantly.
6. Off-chain transaction data shows that there is a willingness to buy at the price of 60,000; there is a willingness to sell at the price of 70,000.
7. The probability of not falling below 57,000~61,000 in the short term is 82%; among them, the probability of not rising below 71,000~74,000 in the short term is 67%.

• Market tone:
Driven by the news last week, the positive sentiment in the market has not continued to increase. In the short term, if the purchasing power of the market has not been further increased this week, the probability of a large-scale and continuous short squeeze is low, and it is still necessary to pay attention to a small correction.

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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