Dynamic Zone Weekly Report: The rise of Bitcoin is weak, the probability of the Federal Reserve not cutting interest rates in January is high, and micro-strategies plan to issue additional stocks to increase positions in BTC..

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BlockTempo
12-28
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Overview of Important Events This Week (12/22-12/28)

Changes in Trading Market Data This Week

Sentiment and Sectors

1. Fear & Greed Index

The market sentiment indicator rose from 73 (Greed) to 74 (Greed) this week, remaining in the (Greed) range throughout the week.

2. Funding Rate Heat Map

The highest Bitcoin funding rate this week reached 12.43%, with the lowest at 2.72%.

The funding rate heat map shows the trend of funding rate changes for different cryptocurrencies, with colors ranging from zero-rate green to 50% positive-rate yellow, and black representing negative rates; the white candlestick chart also shows the price fluctuations of Bitcoin, forming a contrast with the funding rate.

3. Sector Performance

According to Artemis data showing, the average increase in the blockchain sector this week was (0.4%), with Centralized Exchange, Staking Services and Bridge taking the top three spots at (65.1%, 4.7% and 2.5%) respectively.

The increases for Bitcoin and Ethereum this week were (-1.7%, -3.2%) respectively.

The three worst-performing sectors were RWA (-13.7%), Data Availability (-6.3%) and Bitcoin Ecosystem (-6.3%).

Market Liquidity

1. Total Cryptocurrency Market Cap and Stablecoin Supply

This week's data shows the total cryptocurrency market cap ranging from $3.32 trillion to $3.36 trillion. BTC dominance is 55.75%, and ETH dominance is 12.09%.

The total stablecoin supply, an important indicator of market health and liquidity, increased from $189.82 billion to $190.33 billion this week, an increase of $5.1 billion or about 0.27%.

2. Potential Buying Power on Exchanges

Data shows that exchange assets have been in a net inflow state this week, with a large influx of USDT in particular after the US election. This phenomenon may indicate that investors are preparing for upcoming market volatility, and the inflow of funds to exchanges may mean an increase in short-term buying demand.

Additionally, the single-day peak net inflow reached $15.8 billion in December, and the single-day peak net inflow this week reached $6.1 billion, indicating ample market liquidity, but significantly less than the previous few weeks.

3. Cryptocurrency Dynamics

The overall sentiment in the cryptocurrency market has improved this week, with PHALA, Horizen, and Adventure Gold leading the pack with increases of +158%, +97.7%, and +83.6% respectively, and major coins generally rising. According to Blockchaincenter data showing, the current Altcoin Season Index is 47 (down 0).

Bitcoin Technical Indicators

1. Bitcoin Spot ETF Flows

This week, Bitcoin ETF flows saw an outflow of $366.7 million.

2. Bitcoin Futures Open Interest

According to data, Bitcoin's futures open interest on exchanges rose rapidly this week, from $60.28 billion to $58.6 billion, and then fell back as the price declined, but the open interest remained at a high level, indicating active leveraged trading in the market.

3. Bitcoin Historical Monthly Returns

According to historical data, Bitcoin's return rate in the 55th week was +0.79%. This performance was lower than the historical weekly average return rate (+3.02%) and higher than the median (+0.05%), and improved from the previous 51st week's return of -8.78%.

4. Bitcoin Rainbow Chart

The Bitcoin Rainbow Chart shows that the current Bitcoin price ($97,000) is in the "Consider DCA" range.

5. Coinbase Bitcoin Premium Index

This week, the Coinbase Bitcoin Premium Index remained in negative territory for most of the time, indicating relatively weak demand in the US market, similar to the previous week's trend. However, the negative premium was more pronounced this week, and Bitcoin prices fell significantly during several corrections, further reflecting the US market's sensitivity to downward price movements and the pressure of low demand.

A positive premium may indicate that US investors' buying power is stronger than the global market.

6. Bitcoin Net Realized Profit/Loss

The Bitcoin realized net profit/loss indicator shows that the current market sentiment has declined, and the market structure has already surpassed the year's high. Although the market has performed strongly in the short term, investors still need to be wary of potential correction risks, especially after a rapid rise, as the market may see profit-taking.

7. Long-Term Bitcoin Holders

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According to on-chain data, the net position of long-term Bitcoin holders has seen a significant decline recently, with the red bars indicating increasing selling pressure since October. Particularly when Bitcoin price broke new highs and approached $100,000, the net position change of long-term holders turned from positive to negative, indicating that some investors chose to take profits at the high levels.

The current selling pressure has exceeded the peak in March this year, and in early December, Bitcoin price repeatedly tested the $100,000 mark, but the de-leveraging behavior of long-term holders exerted significant selling pressure on the market. Although market sentiment remains optimistic, it is necessary to closely monitor the behavior of short-term holders (STH) and whether the market can absorb the increased supply pressure.

8. Bitcoin On-Chain Buying Power

According to on-chain data, this week's Bitcoin long-term and short-term holder data shows that as the price has risen, the holdings of short-term holders (red line) have increased significantly, while the holdings of long-term holders (blue line) have continued to decrease, especially when Bitcoin price repeatedly tested the $100,000 mark in early December.

This trend reflects the phenomenon of capital flowing from long-term investors to short-term speculators. The increase in the proportion of short-term holders indicates an increase in market risk appetite, but also the possibility of increased volatility risk. The de-leveraging of long-term holders shows an increase in profit-taking at high levels, and it is necessary to pay attention to whether short-term capital can support the upward price movement.

9. Short-Term On-Chain Cost Basis Bands

This week, the Bitcoin short-term on-chain cost basis bands show that the price is approaching the upper band (red line) of $122,900, reflecting high market sentiment and increased profitability intentions of short-term investors. The realized price (blue line) of long-term holders is $86,400.

Important Technical Indicators for Ethereum

1. Ethereum Spot ETF

This week, the Ethereum ETF saw a net inflow of about $226.5 million.

2. DeFi Total Value Locked (TVL)

This week's data shows that the total value locked in the DeFi market decreased from $122.354 billion to $127.814 billion last week.

This Week's Market Analysis News

1. Bitcoin Fluctuates Around $95,000》U.S. Initial Jobless Claims Lower Than Expected, Over 91% Chance Fed Won't Cut Rates in January

The U.S. Department of Labor reported last (26th) evening that the seasonally adjusted number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly a month, indicating that while the labor market is cooling, companies are still avoiding large-scale layoffs, also implying that the Federal Reserve (Fed) may not further cut interest rates. (Continue reading)

2. Printing Money to Rescue the Economy! China's Central Bank Calls for "Moderately Loose" Monetary Policy for the First Time in 14 Years, Hinting at RRR and Interest Rate Cuts

The Chinese government has recently been relaxing various regulatory efforts, including launching epic economic stimulus measures, but the economy has remained volatile. As part of measures to support economic growth, China plans to adopt a moderately loose monetary policy next year, which is the first time China has shifted to an easing policy since 2010. (Continue reading)

3. Bank of Korea: Over 30% of Nationals Are Crypto Trading! The Number of Domestic Cryptocurrency Investors Exceeds 15.59 Million

According to Yonhap News Agency, the Bank of Korea has for the first time disclosed data on domestic virtual asset investment, revealing that due to Bitcoin's surge above $30,000 in November, the number of investors with accounts on Korean exchanges has exceeded 15 million, equivalent to more than 30% of the population investing in cryptocurrencies. (Continue reading)

4. MicroStrategy Calls Special Shareholder Meeting: Seeks to Raise Capital to Buy $42 Billion Worth of BTC Over the Next 3 Years

U.S. listed company MicroStrategy has again increased its Bitcoin holdings, spending $561 million to purchase 5,262 BTC at an average price of $106,662, bringing its total holdings to 444,262 BTC. The company has also announced a special shareholder meeting to increase the authorized share count to support its "21/21 Plan". (Continue reading)

5. Durov Announces Telegram's 2024 Milestones: First Profitability, Over 12 Million Subscribers, $50 Million Cash Reserve...

Telegram founder and CEO Pavel Durov posted a summary of Telegram's business progress in 2024 yesterday (23rd), stating that Telegram's subscriber count has tripled, advertising revenue has increased several-fold, and the company ended the year with over $50 million in cash reserves. (Continue reading)

Cryptocurrency Regulatory Landscape Across Countries

1. Hex Founder Evades Taxes of Hundreds of Millions of Euros, "Wanted by Interpol", He Responds: "It's So Cool, You Can't Do Anything to Me"

2. MetaMask Receiving USDT May Be Illegal? Brazil's Central Bank Plans to Ban Withdrawing Stablecoins to Self-Custodial Wallets

Brazil's proposed ban on stablecoin self-custody wallets could trigger an uncontrollable decentralization wave. While Brazil's stablecoin ban aims to control the market, it may actually catalyze a stronger decentralization trend, accelerating users' departure from regulated platforms. (Continue reading)

3. Former chairman of Taiwan's Mineboard "involved in gambling fraud of 40 billion", lawyer Liu Li-en charged with 470 million money laundering and sentenced to 9 years

Liu Li-en, the former chairman of the crypto company Mineboard in Taiwan who was quite active in the crypto industry, was accused of setting up Heiman Technology Company to assist 3 illegal gambling websites in money laundering. The investigation found that he failed to report transactions amounting to over 39.4 billion last year and earned 470 million in commission fees. The Taipei District Prosecutors Office indicted Liu Li-en and 16 other group members on charges of organized crime, gambling, and money laundering, and sought a 9-year sentence for Liu Li-en. (Continue reading)

Russian Finance Minister Anton Siluanov said yesterday (25th) that after passing legislation to use cryptocurrencies like BTC to counter Western economic sanctions, Russia has now allowed the use of digital assets like BTC for payments in international trade. (Continue reading)

According to the foreign media outlet Atlas21, the Bank of Italy in its latest Economic and Financial Research Report No. 893 has identified BTC P2P (peer-to-peer) services as a "crime-as-a-service". (Continue reading)

The Russian government has announced that starting from 2025, it will impose a full ban on cryptocurrency mining in 10 regions, and implement seasonal mining restrictions in some high-energy-consuming areas to balance energy consumption and electricity tariffs, with the ban expected to last until 2031. (Continue reading)

Market Highlights Next Week (New Year Holiday)

12/30 (Mon)

  • China: December Manufacturing PMI, forecast 50.3, previous 50.3

12/31 (Tue)

  • Multiple countries: Some markets close early before New Year's Eve

1/1 (Wed)

  • Major countries worldwide: New Year's Day, markets closed

1/2 (Thu)

  • US: Initial Jobless Claims
  • US: December Manufacturing PMI, forecast 48.3, previous 49.7
  • US: December ISM Manufacturing PMI, previous 48.4

1/3 (Fri)

  • Japan: Holiday
  • US: December ISM Manufacturing PMI, forecast 48.3, previous 48.4

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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