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On-chain data analysis for the 48th week: USDT is leaving the market, and whales are slowing down their withdrawal pace

WatchToweR Crypto

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The percentage losses for long-term participants reached a four-year high, similar to 2015.

Original title: "The cold has not yet disappeared, the soft armor gradually rises｜WTR 11.28"

Original source: WatchToweR Research Institute

Review of this week

This week from November 22 to November 28, the highest price of Bingtang Orange was around $16473, the lowest price was close to $15443, and the fluctuation range reached about 6.67%.

Observing the chip distribution chart, there are a large number of chips traded around 16500, which will have certain support or pressure.

• Analysis:

1. 16500–20000 is about 3.44 million pieces;

2. 12355 ~16000 is about 880,000 pieces;

• The probability that the price will not break through 18500-20000 in the short term is 70%.

Important news

Economic news

• United States

1. The University of Michigan Consumer Confidence Index for November was 56.8, higher than the previous value of 54.7 and higher than the expected value of 55; the monthly rate of durable goods orders in October was 1%, higher than the previous value of 0.4% and higher than the expected value of 0.4%.

2. The Federal Reserve reduced its balance sheet by US$53.266 billion last week, the largest reduction this year, and its total assets and liabilities have dropped to about US$8.625 trillion.

3. The 10-year U.S. Treasury yield fell 13 basis points this week and hit a new low of 3.65% in nearly seven weeks on Friday. The two-year yield fell 6 basis points to 4.47% this week.

4. The cooling of the U.S. housing market accelerated, with transaction cancellations and price cuts hitting record highs in October.

5. U.S. diesel inventories fell to the lowest level since the government began reporting fuel data in 1982.

6. U.S. shoppers spent a record $9.12 billion online on Black Friday this year, up from $8.92 billion in 2021 and $9.03 billion the year before.

7. The US dollar index fell nearly 1% this week.

a. Goldman Sachs believes that the US dollar index will peak in the fourth quarter of this year. Citigroup and Morgan Stanley also believe that as inflation slows and the Fed's tightening strategy is coming to an end, the US dollar index will peak in the fourth quarter and will start to fall in 2023.

• UK & EU

1. Germany's third-quarter GDP final value increased by 0.4% month-on-month and 1.3% year-on-year, both slightly higher than expected, temporarily alleviating the panic of a severe recession.

2. The 10-year German bond yield has fallen for three consecutive weeks, and the two-year short-term bond yield has risen by 9 basis points this week. The two-year/10-year German bond yield inversion hovered at 23 basis points.

a. This shows that investors expect the European Central Bank to raise interest rates further in the short term, and are worried that Germany, Europe's largest economy, is heading for a recession.

3. The 10-year Italian bond yield rose 21 basis points to 3.89%. The 10-year British bond yield rose 8 basis points to 3.12%.

4. The EU's sanctions on Russian oil will officially take effect on December 5, and European energy ministers failed to reach a compromise on the price ceiling on Friday.

5. The Russian government is preparing a decree that will prohibit Russian companies and any traders who buy the country's oil from selling oil to any country that participates in implementing Russia's oil price ceiling.

• Asia & Others

1. Japan's Tokyo core CPI rose 3.6% year-on-year in November, exceeding market expectations of 3.5%, hitting a 40-year high and exceeding the central bank's 2% inflation target for the sixth consecutive month.

2. Oil prices extended their losses this week. WTI January crude oil futures fell 4.8% this week and hit a 10-month low at one point this week. Brent January crude oil futures fell 4.6% this week. NYMEX December U.S. natural gas futures rose more than 11% this week.

3. Saudi Arabia and Iraq, two major OPEC oil producers, jointly stated that they would stick to OPEC+'s recent production cut decision.

4. COMEX December gold futures fell 0.5% this week. Spot gold rose slightly by 0.1% this week.

Crypto Ecological News

1. The Tel Aviv Stock Exchange in Israel will establish a cryptocurrency trading platform to provide customers with blockchain-based trading services and participate in crypto transactions.

2. El Salvador has established a national Bitcoin Office (ONBTC) to provide information about Bitcoin, blockchain and cryptocurrency in El Salvador to anyone interested.

3. ARK, the Ark Fund, bought 176,000 shares of Grayscale GBTC again. Last week, ARK bought 315,000 shares of GBTC. Currently, ARK holds 6.4 million shares of GBTC, worth about US$53 million.

4. The Hong Kong government has put forward a vision to embrace the virtual asset industry. In the next few months, it will launch a new licensing system for virtual asset service providers to attract the global virtual asset community to Hong Kong.

5. BN's Bitcoin reserves surpassed CB platform for the first time, becoming the centralized trading platform with the largest Bitcoin reserves. The top five platforms with the largest reserves are:

a. BN 584,083, CB 533,048, Bitfinex 345,534, Gemini 158,918, Kraken 71,426.

6. HB announced its new Chinese name "Huo Bi" at the brand reshaping conference held in Singapore.

7. The difficulty of the entire Bitcoin network has risen to 36.95T, a record high, and the total network computing power is about 262.75EH/S.

8. Man Group Plc, one of the world's largest investment management companies, may establish a hedge fund focusing on the cryptocurrency field as early as the end of this year. In recent months, it has been formulating a cryptocurrency fund investment strategy.

Long-term insight: used to observe our long-term situation; bull market/bear market/structural change/neutral state

Mid-term exploration: used to analyze what stage we are currently in, how long will this stage 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 premises

Long-term insight

• Profit and loss status of long-term participants

• Holding structure of participants with more than 1 year

• Chip consumption support model

• Number of new addresses added in E Ethereum

• Selling and new chip structure

This week, we will explore and gain insights into the industry and market from the aspects of profit and loss, holding structure, and average difference in chip consumption.

(The following figure shows the profit and loss status of long-term participants)

The loss percentage of long-term participants has reached a 4-year high.

Some participants have suffered losses of up to 80% several times in the 2015 cycle.

The current situation and psychological state may be more similar to the state in 2015.

(The figure below shows the holding structure of participants with more than 1 year)

The overall market has changed from a hollow structure to a solid state;

The current situation is more like the position status in July 2015.

(The figure below shows the chip consumption support model)

Delta price and Balanced price are well-known on-chain models with a record of converging with prices near the bottom of the cycle.

• Delta Price ($12150 purple) is a hybrid pricing model based on technology and on-chain foundations.

￮ It is calculated as the difference between the realized price and the historical average price. Delta Price has previously captured the bottom core state of the bear market.

• Balanced Price ($15600 blue) represents the difference between the realized price and the transfer price.

￮ This can be considered a "fair value" model that captures the difference between buying (cost basis) and possible selling (transfer).

Given the reality and possible future volatility, the Delta Price model can be appropriately relaxed.

Then if it has never been broken from the cycle, or there is no worse situation, it may be 15,600–11500 as a relatively more likely bottom price.

(The following figure shows the number of new addresses in E Ethereum)

The number of new addresses in E Ethereum has dropped to the lowest point in 3 years.

The industry downturn and the current weak confidence have reduced the momentum of E Ethereum.

It has dropped to the low point in the industry cycle.

The relative performance is worse than that of Bingtang Orange, which may be due to the recent "hacker" selling.

(The following figure shows the structure of sold and newly added chips)

From the macro chain history:

Or it was particularly obvious in the 2018 cycle, the selling chips were far greater than the new chips, which caused the market to fall into a heavy blow.

This is also reflected in May 2021.

And in early 2019, the newly added on-chain chips gradually surpassed the original sold chips.

This slowly brought the industry out of the downturn and triggered a small bull market.

At present, the market's new chips are not strong enough, and it needs to digest the pressure that may be brought by selling chips.

Mid-term exploration

• Cost groups from the perspective of time

• Short-term trader supply

• Long-term trader supply

• Average selling life of Bingtang Orange

• Total impact of profit and loss

• Number of addresses above 1 Bingtang Orange

• Stable currency circulation

• Net position of giant whale trading platform

• Net position of miners

Time perspective rating: Slight supplement of short-term funding gap

(The following figure shows the cost group from the perspective of time)

Orange line: short-term average cost

Dark blue line: long-term average cost

Blue area: When long-term average cost> short-term average cost

Usually, the diagnosis of the status of the secondary market is to judge the liquidity status in the market.

WTR used the ratio between short-term and long-term holders for liquidity diagnosis. This time, the specific situation in the market will be judged from the perspective of the average cost of short-term and long-term holders on the chain.

Observing the blue area, you will find a more obvious phenomenon.

If the market enters a more fragile stage, some factors may be that there are some "funding gaps" in the market.

When the long-term cost is higher than the short-term cost, this performance will be more significant.

When the cost of short-term traders is in a declining state, it may indicate that there is a lack of "short-term hot money" chasing high sentiment in the market, and the current decline is slightly slowing down.

This part of the "funding gap" will not directly lead to a worse situation in the market, but it will cause the market to be in a "more fragile" state.

In-depth observation of the dynamics of long-term and short-term holders.

(The figure below shows the supply of short-term traders)

The short-term funding gap has been slightly supplemented, and the current state is slightly repaired.

(The figure below shows the supply of long-term holders)

Currently, the mild selling of long-term holders has slowed down, and there is no obvious trend of increasing holdings. They may tend to hold or wait and see.

Selling pressure rating: the total impact volume has slowed down

(The figure below shows the average selling life of Sugar Orange)

The average selling life of Sugar Orange on the chain shows signs of a slight slowdown, which can be judged as the coins held for a long time are temporarily in a stage of calm sentiment.

(Figure below: Total impact of profit and loss)

The total impact has slowed down slightly, and there is no major impact at present.

Growth status rating: High-quality addresses are still growing, and USDC has increased slightly

(Figure below: Number of addresses above 1 Bingtangcheng)

The proportion of high-quality addresses relative to valid addresses has increased. From November 8 to November 28, the proportion increased from 2.12% to 2.20%.

The current growth of high-quality addresses is relatively rapid, and this group of people may share part of the market's acceptance pressure.

(The following figure shows the circulation of stablecoins)

The circulation of USDC still shows a slight increase, which may be the acceptance funds at the current stage.

The circulation of USDT is still showing outflows, and USDT users may have a certain risk aversion and non-participation sentiment.

Ratings of each group: Whales slowed down their outflow from the trading platform, and miners still had slight signs of selling

(The following figure shows the net position of the whale trading platform)

The whales slowed down their outflow from the trading platform and turned to a slight inflow into the trading platform, and there may still be signs of pressure testing.

(The following figure shows the net position of miners)

Miners still have slight signs of selling, which may be lower than the operating cost price of miners, causing miners to choose to temporarily sell and wait and see.

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 trading platform net position

• Yitai trading platform net position

• High-weight selling pressure

• Global purchasing power status

• Stable currency trading platform net position

• Off-chain trading platform data

Derivatives rating: sluggish, not a safe zone

(Derivatives risk factor in the figure below)

After about a week of adjustment, derivatives have fallen to a stage close to neutral.

Currently, there is a slight tendency to move towards the dangerous zone. If you have a long strategy, please pay attention to the risks.

(The figure below shows the option intention transaction ratio)

Option participants also showed a sluggish state, and the trading volume did not increase, and the bullish and bearish ratios did not increase much.

(The figure below shows the derivatives trading volume)

The derivatives trading volume fell into a slump, and neither futures participants nor option participants placed bets.

Currently, the group has entered a wait-and-see stage.

(The figure below shows the implied volatility of options)

The volatility did not fluctuate too much.

Emotional state rating: low sentiment, new users are not optimistic enough

(The figure below shows the profit and loss transfer volume)

Both stampede sentiment and profit selling pressure have declined.

(New addresses and active addresses in the figure below)

New addresses and active addresses have also declined, among which the decline in active addresses is the most serious.

The active sentiment in the market may have become negative due to recent events such as Grayscale and WBTC.

Of course, negativity is not entirely a bad thing, nor is it necessarily a good thing. It is an intermediate state, but it will make the market fragile.

Spot and selling pressure structure rating: The intention to withdraw coins has begun to decrease, and there are signs of slight waiting

(The net position of Bingtangcheng trading platform in the figure below)

Accumulation has slowed down.

The pace of market accumulation has entered a slowing process, but fortunately, no inflow has occurred at present.

(The net position of E Tai trading platform in the figure below)

Accumulation has slowed down.

(High-weight selling pressure in the figure below)

The high-weight selling pressure of Bingtang Orange began to decline;

However, the high-weight selling pressure brought by E-Tai still needs to be digested slowly, and there is no rapid decline at present.

Purchasing power rating: Global purchasing power is weak, but stablecoins have increased slightly

(Global purchasing power status in the figure below)

The purchasing power of global time zones has declined severely.

It has become very weak; what needs to be paid more attention to in the future is when is the time of slowing down and the time of pausing and turning.

This will become more important in the future.

(Net position of USDC trading platform in the figure below)

The inflow of USDC is still supportive, and the strength has not been weakened too much at present.

(The following figure shows the net position of USDT trading platform)

On the contrary, USDT has gradually declined, and the support of purchasing power has begun to decline to a certain extent.

Off-chain transaction data rating: 15000 purchase intention orders increased

(The following figure shows the Coinbase off-chain data)

There were multiple batches of pending orders, at 15500, 15000, 14500–14600, 14000 and other prices.

And the buying intention at this price is stronger than before.

(Binance off-chain data in the figure below)

There are intention orders at prices such as 15000, 14500, and 14000.

(Bitfinex off-chain data in the figure below)

There is an order at 15800.

But the buying intention shown by the above two mainstream trading platforms is weaker.

Summary of this week:

Summary of news:

Morgan Stanley, Goldman Sachs and Barclays Bank will price the S&P 500 at the end of next year at the same level as this year.

Recession is not the beginning of a decline, and participants rarely wait until a recession occurs before selling assets.

Generally speaking, the market has often reached the bottom of the sell-off before a recession occurs.

Before a recession, the market will look for evidence of recession again and again, and then sell assets. Perhaps it is also because people have been looking for evidence of recession, which promotes declines.

When in a recession, the market will look for evidence of good news again and again, and buy value. The Fed's positive stimulus at the bottom has made the market escape from the bottom again and again.

The above behavior pattern is generally more effective when there are no major problems with credit and confidence.

Each round of speculation in the rise of emerging industries will bring a lot of funds and talents to the industry, whether it is long-term capital construction funds or short-term speculative funds.

Almost every round will collapse due to the failure to fulfill promises, insufficient funds to undertake, and the pressure of profit plates.

However, it is undeniable that the construction of oneself and the construction of talents left at the end of each round of enthusiasm;

In the end, they will release stronger preparations and support around the industry.

Many crazes, which have just emerged in the last cycle, will grow more powerfully in the next cycle

The birth of things is often accompanied by two sides.

The opposite side of things often inspires people to pursue the other side of things strongly and provide motivation.

The underlying crisis of financial trust and the suppression of the absolute center inspired by the last 10 years have made people have a strong and persistent pursuit of the other side of things.

This is a strong demand of this era or even this century, not fabricated out of thin air.

The destruction of many things cannot stop the pursuit and yearning of a century or era for a direction.

Long-term insights on the chain:

1. The percentage of losses of long-term participants has reached a 4-year high, similar to 2015;

2. The overall on-chain holding structure has changed from a hollow structure to a solid state; similar to July 2015;

3. If the cycle has not been broken, or there is no worse situation, according to the Delta price and Balanced price model, 15,600-11500 will be a relatively more likely bottom price;

4. The number of new addresses of E Ethereum may have fallen to the lowest point in 3 years due to the "hacker" selling, which is worse than the performance of Bingtang Orange;

5. In the current state, the new chips in the market are not strong enough, and it may take time to digest the pressure brought by the selling of chips.

• Market tone:

Depression and digestion; it may slowly enter the repair cycle as the state changes over time, and it needs to be continuously observed in the future.

Mid-term exploration on the chain:

1. The short-term holding cost on the chain has slowed down slightly;

2. Short-term holders have slightly supplemented the funding gap missing in the market;

3. Long-term holders have slowed down their selling;

4. The average selling life has shown signs of a slow increase, and is currently slightly slowing down;

5. The total selling pressure is in a relatively low area;

6. High-quality addresses are still showing growth;

7. USDC circulation has increased, and USDT has left the market;

8. The whales have slowed down the pace of withdrawing coins, and slightly flowed into the trading platform;

9. Miners still have signs of selling.

• Market tone:

Repair, anxiety

The funding gap was slightly supplemented by "short-term funds", but there were still signs of whales testing pressure and miners reducing their holdings in the market, and the states of anxiety and repair were running in parallel.

Short-term observation on the chain:

1. The state of derivatives has deviated from relative safety during this period;

2. The trading volume of derivatives and the betting ratio of participants in derivatives are in a very depressed state;

3. The emotional state of market participants is in a downturn;

4. The growth of the number of new user addresses in the short term is not optimistic;

5. The trend of currency accumulation has slowed down; high-weight selling pressure has decreased;

6. E's high-weight selling pressure still needs time to digest;

7. Global purchasing power is weak; USDC is one of the main factors supporting purchasing power at present;

8. The order data in the trading platform shows that there is a purchase intention below 15,000;

9. The probability that the price will not break through 18500-20000 in the short term is 70%.

• Market tone:

Depressed, what we need to wait for now is when the selling pressure will drop to a lower stage.

The market is slightly fragile at present.

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.