Written by: Shang2046 The information, opinions and judgments on markets, projects, currencies, etc. mentioned in this report are for reference only and do not constitute any investment advice.
Bitcoin is about to enter a new round of interest rate cuts. Combined with the full turnover in the past six months and the reduction in supply accumulated by halving, it is expected to achieve a breakthrough in key positions.
Market Week
This week, BTC opened at $58436.20 and closed at $64251.93, with a high of $65050.08 and a low of $57820.00, up 9.95%, with an amplitude of 12.37%.
In the past nearly 6 months, BTC has been fluctuating at a high level, with short-term losses accumulated for 2 months. The decline once reached 33%, which was enough to erode the confidence of most people.
As Federal Reserve Chairman Powell's speech on Friday revealed that the interest rate cut was finalized, U.S. stocks rose sharply, and BTC also broke free from the suppression of the 200-day line in one fell swoop, completely getting rid of the suspicion of a bearish turn.
But we must point out that since the birth of BTC, interest rate cuts and interest rate hikes have not necessarily brought about a turning point in the market. Although this connection has been strengthened since BTC broke through the $1 trillion market value and was integrated into the mainstream financial market through ETFs, BTC's own supply and demand logic is the fundamental factor that determines its price trend.
According to EMC Labs statistics, after a long period of consolidation, 4.15 million BTC chips have accumulated in the range of less than 20% between $60,000 and $73,700. In this range, three key cost lines are constructed: $63,700 for short-term investors; $62,000 for the median shutdown price of mining machines in the United States; and $58,100 for US ETFs if the price drops a little further.
There is another key data that most people no longer mention. After the fourth BTC halving in April this year, the annual supply of BTC will be reduced by 164,000, which is approximately equal to the sale of one Mt. Gox + the German government; in four years, it will reach 656,000, accounting for 22% of the 3 million circulation of the exchange.
All of these require time to accumulate. Looking back one year later, this may be the most critical support level for this round of real bull market, a very solid starting point, and may also be the bottom of the next bear market.
Specifically this week, we observed a total inflow of $1.4 billion into stablecoin and ETF channels, continuing the trend of stable capital inflows since July.
With the interest rate cut finalized and technical indicators and on-chain supply structure forming an upward trend, we expect BTC to fluctuate upward in the short term and is expected to set a new all-time high in Q3.
Federal Reserve and economic data
On Friday, Federal Reserve Chairman Powell delivered a major speech at the global central bank meeting, turning dovish for the first time since the interest rate hike cycle, and making it clear that the Fed's focus will shift from reducing inflation to protecting economic growth and employment.
Combined with previous information, the market understood this as the official start of the interest rate cut cycle in September, and the "shoe dropped". The three major valuations rose by more than 1% each. The US dollar index fell to 100.68, the 10-year US Treasury bond yield fell to 3.795%, and London gold rose to US$2,511 per ounce.
It can be said that the trend of interest rate cut cycle is taking shape, which is expected to stimulate the gradual return of leveraged funds. At present, the CME Federal Reserve is still observing that the maximum probability of a 25 basis point interest rate cut in September is still high. Before the September interest rate meeting, there are two important data to be released, namely the August CPI and non-agricultural data. If these two data exceed expectations, the probability of a 50 basis point interest rate cut in September will increase.
Funding
Following the massive inflow of $16.55 last week, stablecoins saw an inflow of $934 million this week, which continued to decline compared to last week and the week before. Both USDT and USDC saw positive inflows of $934 million and $58 million respectively, with USDC inflows slowing down.
BTC ETF channel achieved positive inflows in all 5 trading days, with a net inflow of US$507 million for the whole week. Among them, the speeches of the global central bank meeting on Friday stimulated an inflow of US$252 million on a single trading day on Friday. The continuous inflow of the two major funding channels provided material support for the rise.
Chip Supply
This week, the market continued to "go from short to long", and the trend intensified. The scale of long-term holdings increased by 105,100 coins, while short-term holdings decreased by 107,500 coins. Short-term holdings have been reduced for 9 consecutive weeks, and this week is the largest reduction week in eight weeks.
Short-term investors finally got rid of their losses this week, and selling also decreased, with losses exceeding $100 million in just one day.
2,100 BTC were outflowed from exchanges this week, and the outflow slowed down, but the destocking continued. Miners increased their holdings by 200 this week, and have increased their holdings for 5 consecutive weeks. The hash rate has fallen, but remains high. The hash rate has gradually returned to its historical high. Overall, the "miner massacre" has ended.
BTC on-chain data
New addresses and active addresses continue to be repaired, the number of transfers has increased, and Gas increased dramatically on the 20th, which was due to the launch of staking for the BTC ecological project.
Ecological analysis
The number of new addresses, active addresses, and total transfers in the Ethereum ecosystem continue to recover in the expansion zone, and the ecosystem is gradually returning to active status.
Solana's new addresses, active addresses, and total transfer numbers continue to recover, and it has returned to the expansion zone and continues to recover. The overall pace is consistent with Ethereum Eco, but the on-chain data is not strong.
EMC BTC Cycle indicator
The EMC BTC Cycle on-chain data engine shows that the bull cycle indicator has recovered slightly, from 0.125 last week to 0.25.
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