The rebound in the past seven days mainly came from the limited approval of the ETH spot ETF by the US SEC. Although the final approval and listing will take 1-2 months, combined with the FIT 21 Act (clear regulatory policy) voted by the US Congress and Trump's recent frequent gestures to the cryptocurrency industry, the US macro-climate has suddenly become sunny.
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The US stock market is also fluctuating at a high level similar to BTC. The Dow Jones fell sharply and rebounded weakly, while the Nasdaq rebounded strongly (Nvidia's financial report exceeded expectations). BTC currently maintains a relatively weak state. With the expected landing of ETH ETF, there are signs that the industry capital in the market has shifted from BTC to ETH. The ETH/BTC trading pair rebounded by 20%, and the trading volume increased by 4 times.
In terms of interest rate cuts, the Fed's doves and hawks have taken turns, and each time they have triggered a reaction in BTC. Before the interest rate cut is clear, this will be the underlying tone of the BTC market, and this period may continue for 2 months, which is close to the 17-week shock and adjustment period that began in June last year.
Supply and demand structure
This round of bull market has obvious similar characteristics in terms of trajectory, and is closer to the trajectory of 2017: slowly rising, with several high-level stops and consolidation along the way. This forms sufficient turnover and provides strong support for subsequent rises.
The $60,000-73,000 range has become the largest BTC chip accumulation range, with a total of about 3 million chips. At the same time, $66,000 has also become the single largest chip accumulation area in all price ranges, reaching 546,000 chips. At present, this may have formed a support range for a new round of market conditions.
US ETFs have recorded net inflows for two consecutive weeks since March, reaching $1.055 billion after a net inflow of $946 million last week.
The inflow of USD stablecoins can be regarded as a core indicator of long-term market liquidity. Following the inflow of $823 million last week, the stablecoins had a slight outflow of $30 million last week. Further observation shows that the net outflow mainly came from the outflow of $693 million from the US compliant stablecoin USDC, which was related to its continuous decline in market share for two years; while the market-oriented stablecoin USDT had a net inflow of $606 million.
As of May 26, the number of coins held by centralized exchanges was 2.329 million, an increase of 12,000 from last week. This shows that with the rebound in market prices, the short-term BTC supply has increased slightly, but the amount is not large.
Similarly, as the price rebounded for two weeks, the on-chain profit of short-term investors who held BTC for less than 5 months increased from losses to 12%, which is a relatively moderate profit in the bull market cycle. From the perspective of the past two years, there is not too much concentrated profit-taking pressure.
Before the expectation of interest rate cuts in the United States reaches its strongest point, the overall market is still in a dynamic balance of the overall upward trend. However, we have also seen the approval of the ETH ETF, and the "competition" for cryptocurrency investors is happening one after another due to the early warm-up of the US election.
Bitcoin has a slight drop today. The main reason is that MtGox (Mentougou) may transfer a huge amount of Bitcoin, which may lead to an increase in market supply and cause panic in the community. BTC prices are under pressure in the short term: the current price is US$67,830. Considering the possible negative impact of sudden asset flows, we should remain cautious today and pay attention to subsequent capital flows and market reactions. Avoid heavy positions in the short term. In the long term, we need to evaluate the stability of the market after absorbing this news to determine whether there is an expectation of rising prices.
The cryptocurrency market is still in a bull market, and the price of Bitcoin has not yet reached its peak. It is predicted that it can rise further. In the past bull market, the MVRV peaks were 4.83 and 3.97, respectively. Currently, it has only reached 2.78, and has not yet entered the overvalued area. It will rise further. After entering the overheating stage in March 2024, Bitcoin has experienced more than two months of sideways and adjustment. It is currently also a consolidation period in the mid-term of the bull market.
Again, what you can see is what the dog dealer wants you to see. We need to analyze the internal situation. If there is a drop, is there an opportunity to enter the market in the short term, and is there a point to increase the position in the long term? 66,000 is the single largest chip accumulation area in the price range, and this may be a good point.
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