Weekly Review
This week from October 14 to October 21, the highest price of BTC was around $69,000, the lowest was close to $X, and the fluctuation range was about 10.47%.
Observing the distribution of chips, there is a large amount of chip trading around 62,000, which will have a certain support or pressure.
• Analysis:
1. Around 2.02 million pieces in the range of 59,000-63,000;
2. Around 1.18 million pieces in the range of 64,000-68,000;
• The probability of not falling below 53,000~57,000 in the short term is 70%;
• The probability of not breaking through 71,000~74,000 in the short term is 60%.
Important News
Economic News
1. The European Central Bank cut interest rates as scheduled on Thursday. ECB members expect the inflation rate to reach 2% in the first or second quarter of next year, and believe that the possibility of a rate cut in December is very high, and did not discuss the option of a 50 basis point rate cut.
2. Recent strong economic data in the United States has strengthened the expectation that the Federal Reserve will only cut interest rates by 25 basis points in November.
3. Goldman Sachs expects the Federal Reserve to cut interest rates by 25 basis points consecutively from November 2024 to June 2025, with the final interest rate range reaching 3.25%-3.5%.
4. The median historical return rate of the S&P 500 index from October 15 to December 31 is 5.17%, and the median return rate in election years is even slightly higher than 7%, implying that the year-end level could reach 6,270 points.
5. Deutsche Bank said the European Central Bank's decision to cut interest rates consecutively on Thursday is of great significance, and may represent the European Central Bank's shift towards accelerating its easing policy.
6. Traders expect the bank to cut interest rates again in December, and there will be about 122 basis points of interest rate cuts by next June, meaning that there will be a 25 basis point cut at each meeting before then.
7. U.S. statistical data shows: the number of initial jobless claims was 241,000, lower than the expected 260,000, and the previous value was revised from 258,000 to 260,000. U.S. September retail sales monthly rate was 0.4%, higher than the expected 0.3%, and higher than the previous value of 0.1%.
8. The slightly higher-than-expected September retail sales growth supports the view that the economy maintained strong growth in the third quarter, and the signs of economic recovery may not prevent the Federal Reserve from cutting interest rates again next month, but will strengthen the expectation of a 25 basis point cut.
9. Goldman Sachs said it expects the Federal Reserve to cut interest rates by 25 basis points consecutively from November 2024 to June 2025, with the final interest rate range reaching 3.25%-3.5%
Crypto Ecosystem News
1. SEC filings show that Morgan Stanley holds a $272.1 million BTC spot ETF.
2. 12 ETFs, as of Thursday, have accumulated net inflows of over $1.85 billion, with BlackRock's net inflows this week exceeding $1.07 billion, which could be the largest weekly inflows since mid-March.
3. The U.S. election is the next key catalyst for BTC and cryptocurrencies, but the market remains uncertain about the post-election trend.
4. Vitalik said at the 2024 Shanghai Blockchain International Week that the main problem with ETH now is the lack of a unified ecosystem, and the current ETH is like 34 different chains, and the future should be like a unified ecosystem. Solutions include chain-specific addresses, etc.
5. The Aspen Digital report shows that 76% of Asia's private wealth has already invested in digital assets, and another 18% plan to invest in the future. The report surveyed 80 family offices and high-net-worth individuals in Asia, most of whom manage assets between $10 million and $500 million;
6. Compared to only 58% of respondents investing in digital assets in 2022, the figure has risen significantly, with 70% of portfolios having less than 5% in digital assets, and 53% of respondents gaining exposure to cryptocurrencies through funds or ETFs as spot BTC ETFs are approved in the US and Hong Kong.
Long-term Insight: For observing our long-term situation; bull market/bear market/structural change/neutral state
Medium-term Exploration: For analyzing what stage we are currently in, how long it will last, and what situations we will face
Short-term Observation: For analyzing the short-term market conditions; as well as the probability of some direction and the occurrence of certain events under certain premises
Long-term Insight
• Long-term holder chip structure
• Long and short-term cost and inventory
• Crypto ETF fund status
The data in the figure shows that long-term participants are reducing their chips; further investigation shows that short-term participants are increasing their chips. The stage chips are in the process of being preliminarily controlled by short-term chips.
The $70,000 area is an important stage for the market, and also a certain profit ceiling stage for long-term participants. It is related to the top of the inventory (market funds) at this stage. More external funds may need to be introduced to allow the market to break through.
The crypto ETF funds in the US show that off-exchange funds have been relatively active recently.
The buying reserve has warmed up, and now there is no pressure from Grayscale. If there is sustained buying in the future, it will have a very positive effect on promoting the market, helping the market to break through or approach new highs.
Medium-term Exploration
• Changes in net position of long-term and short-term holders
• Liquidity supply
• Network sentiment positivity
• Whale comprehensive score model
• USDC purchasing power comprehensive score
Exploring the changes in the net position of long-term and short-term holders, analyzing the two macro trend forces in the market from the time dimension.
When the market is rising or in an improving period, it is usually the case that one of the long-term and short-term holders chooses to hold or buy. From the perspective of market weight, since long-term participants hold more coins, up to 13.6 million, while short-term participants hold up to 3.2 million at most. Therefore, the weight of the holding/buying behavior of long-term participants will be higher.
The market is currently in a stage where short-term participants are slowly increasing their positions, and long-term participants are slightly selling their chips. The instability of the current market may be due to the fact that long-term participants are transferring chips to short-term participants, and if short-term participants fail to take over the chips, the market may stagnate.
Liquidity is slowly rising, and the market's liquidity may not have reached a bottleneck yet, and the trading environment in the market is still relatively good.
Network sentiment is constantly rising, and may not have reached a bottleneck yet, and the sentiment in the market has not declined.
The score of the whale group has always been very high, and they may not have a large group selling action for the time being.
The willingness of USDC users to participate has declined, and they are currently in a relatively weak purchasing power state. It may be that institutional investors in the US market have higher concerns about the current situation, or they currently do not have much buying action.
Short-term Observation
• Derivative risk coefficient
• Option intention trading ratio
• Derivative trading volume
• Option implied volatility
• Profit and loss transfer volume
• New addresses and active addresses
• BTC exchange net position
• ETH exchange net position
• High-weight selling pressure
• Global purchasing power status
• Stablecoin exchange net position
• Off-chain exchange data
• Off-chain exchange data
Derivative rating: The risk coefficient has entered the red zone, and the risk has increased.
The derivative risk coefficient has reached the red zone, and combined with the observation that there is still a large amount of chip turnover and accumulation around the current price of 68K this week, the probability of a significant correction at the current price is relatively low.
The option trading volume has increased slightly, and the proportion of put options has increased slightly.
The derivative trading volume has returned to the bottom area.
The implied volatility has not changed too much.
Sentiment rating: Neutral
The slight short squeeze in the market last week has also led to a rise in the positive sentiment in the market. The current positive sentiment has declined slightly, and the market may consolidate at the current price level before continuing the short squeeze.
The number of new and active addresses is at a medium-high level.
Spot and selling pressure rating: Overall BTC continues to outflow, ETH continues to inflow.
BTC continues to outflow.
ETH continues to inflow.
There is currently no high-weight selling pressure.
Purchasing power rating: Global purchasing power is declining, stablecoin purchasing power is declining.
Global purchasing power has declined slightly.
The USDC exchange net position has declined.
Off-chain transaction data rating: There is buying interest around 62,000; there is selling interest around 70,000.
There is buying interest around 58,000 and 60,000;
There is selling interest around 70,000 and 72,000.
There is buying interest around 58,000 and 60,000;
There is selling interest around 70,000 and 72,000.
There is buying interest around 58,000 and 62,000;
There is selling interest around 70,000 and 72,000.
Weekly Summary
News Summary:
1. Since October 11, the net inflow of US spot BTC ETFs has exceeded $1.6 billion.
2. The crypto market is gradually recovering strength.
3. Central banks around the world are generally entering an easing cycle, risk assets are entering a bull market, and the possibility of a deep correction in crypto is gradually decreasing.
4. Monetary policy is becoming more and more accommodative, and the liquidity is accumulating. Over time, crypto and risk assets will eventually break through new highs.
5. From experience, the crypto market will go through a stage where BTC breaks through first, and the remaining coins wait and catch up.
On-chain Long-term Insight:
1. Long-term participants are relatively slowly disposing of their chips; short-term participants are starting to actively buy in;
2. The 70,000 level is currently quite important, it is a stage top, and extra force is needed to break through it;
3. The inflow of ETF funds in the US looks good so far, if the inflow can continue to be positive, it may increase the market and increase the probability of breaking new highs or approaching new highs.
• Market positioning:
Currently still in the accumulation stage, more capital needs to be introduced, and the focus should be on the flow of US crypto ETF funds.
On-chain Medium-term Exploration:
1. Currently in the process of long-term participants selling chips to short-term participants;
2. There is still good liquidity in the market;
3. The sentiment of market participants has not declined;
4. Whales still have a high buying/holding willingness and have not shown any selling behavior;
5. The participation enthusiasm of USDC users is relatively low, and there is even a slightly cautious attitude.
• Market positioning:
Anxious
The market is in a state of chip exchange, which may have a certain instability, but the buyers still have the strength.
On-chain Short-term Observation:
1. The risk coefficient has entered the red zone, and the risk has increased.
2. The number of new and active addresses is at a medium-high level.
3. Market sentiment rating: Neutral.
4. The exchange net position shows an overall outflow of BTC and inflow of ETH.
5. Global purchasing power is declining, and stablecoin purchasing power is declining.
6. Off-chain transaction data shows buying interest around 62,000 and selling interest around 70,000.
7. The probability of not falling below 53,000-57,000 in the short term is 70%; the probability of not breaking through 71,000-74,000 in the short term is 60%.
• Market positioning:
The short-term market positive sentiment has declined slightly, and the purchasing power is also at a low level, so it may consolidate or have a slight correction at the current price level. In addition, the chip chart also shows that chips are rapidly accumulating around the current price level, so it is suggested to pay attention to the medium and long-term trends.
Risk Warning:
The above are all market discussions and explorations, and do not have any directional opinions on investment; please be cautious and prevent black swan risks in the market.
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