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Week 52 Data analysis on the chain: the trading sentiment was slightly repaired, and there was a slight selling trace of ETH old coins

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Currently, it is suitable for trading strategies in a very short period of time. The time loss of trading strategies over the medium term may be higher. Of course, the position will have certain advantages.

The original title: "very clear and bright moonlight, joomla sails | WTR 12.26"

WatchToweR Crypto

Review of the week

This week from December 20 to December 26, the highest is near $17,049.50, the lowest is close to $16,429.20, the oscillation range reached about 3.78%.

Observe the chip distribution chart, there are a large number of chips traded around $16473, there will be some support or pressure.

• Analysis:

1. 17000 ~ 20000 about 2.06 million pieces;

2. 12,000-16,500 or 2.66 million;

• The probability that the price will not exceed 18,500-20,000 in the short term is 61%.

Important information

Economic news

• United States

1. The PCE price index rose 5.5 percent year on year in November, in line with consensus expectations and down from a previous reading of 6 percent, slowing for the fifth straight month. Month-on-month gain of 0.1% versus market expectations of 0.1%.

a. The core PCE price index (excluding food and energy prices) rose 4.7% in November from a year earlier, down from 5% in the previous reading. Month-on-month growth of 0.2%, in line with market expectations;

b. According to the sub-data of PCE, the price of goods fell in November, while the service industry was still rising;

c. Prices of most services continued to rise month-on-month, with the exception of transportation-related services, where prices fell month-on-month.

2. The savings rate rose to 2.4 percent in November, the first increase since July but the lowest level on record.

3. Durable goods orders fell 2.1 per cent month-on-month in November, below market expectations of a 1 per cent decline and the lowest since February 2022 after three consecutive months of growth.

4. Real GDP in Q3 was revised to 2.9% q/q from 2.6% in Q3.

a. The growth in GDP in the third quarter was mainly reflected in increases in exports, consumer spending, nonresidential fixed investment, state and local government spending, and federal government spending;

b. The decline was mainly attributable to residential fixed investment and private inventory investment.

5. University of Michigan consumer Confidence Index.

a. Inflation expectations for the coming year were 4.4%, down from 4.9% in the November survey and 4.6% a year earlier, the lowest since June 2021;

b. Consumers' medium - to long-term inflation expectations for the next five to 10 years fell to 2.9% from 3% last month;

c. The University of Michigan's final Survey of Consumer sentiment rose to 59.7 in December, up from 59.1 earlier this month and 56.8 last month.

6. The Federal Reserve has raised interest rates seven times this year and real estate investment is shrinking at a rate of 27.1 per cent.

7. The U.S. House of Representatives has approved a $1.7 trillion spending bill to keep the federal government running through September 2023, sending it to Joe Biden for his signature.

a. That includes about $772.5 billion for U.S. domestic programs and $858 billion for defense appropriations.

• UK & European Union

1. UK equity funds saw record outflows of $26.3bn in 2022, according to EPFR.

2. Sterling has rebounded from its record low in September, falling nearly 11 percent against the dollar this year, its worst year since the Brexit vote in 2016.

3. European equity funds posted 45 straight weeks of net outflows, the worst year except for 2016.

4. Russia will sign a decree next week on the West's response to the price of Russian oil.

a. The Russian Federation will prohibit the supply of oil and petroleum products to countries that comply with price ceilings set by the West and may reduce oil production by 500,000 to 700,000 barrels per day in early 2023.

• Asia

1. The Japanese government this week set a budget of 114,381.2 billion yen for the next fiscal year, exceeding 110 trillion yen for the first time and reaching a record high for the 11th year in a row.

a. In order to secure financial resources for the budget, the Japanese government will issue more than 35.6 trillion yen of national bonds.

• Other

1. Both WTI and Brent futures for February closed higher, while hitting their highest closing highs since Dec. 2.

2. Crude oil has gained 6.9 percent for the week, with U.S. crude up 6.9 percent and cloth up 6.2 percent, both the biggest weekly gains since the week of October 7.

3. NYMEX January gasoline futures gained 11.8 percent this week. NYMEX January natural gas futures fell more than 23 percent this week.

4. European natural gas fell for the second straight week after rising for four weeks, the first weekly decline of nearly 30 percent since September 2.

Encrypted ecomessaging

1. CB has been approved by the Bank of Ireland to operate as a virtual asset service provider VASP to provide services to individuals and institutions in Europe.

2. SNB Capital, one of Saudi Arabia's largest asset management companies, launched its first global Megatream fund to provide investment opportunities for retail and institutional investors.

3. German-listed miner Northern Data has an opportunity to consolidate and expand its market position in flatcake mining in 2023 with approximately 190 million in 2022 mining revenues.

4. SAN Luis Province, Argentina: Legislation allows the issuance of dollar-pegged stablesoins backed by 100% of the province's liquid financial assets, up to 2% of its annual budget, as well as the issuance of NFT by local artists to promote financial and cultural inclusion.

5. Central Bank of Russia: It plans to test the use of cryptocurrencies for international payments within the regulatory sandbox framework.

6. Visa uses StarkNet account abstract model to develop a self-hosted wallet payment stream. Visa, one of the world's largest payment networks, is actively exploring new approaches to smart contracts to help make money and payments programmable, the company said.

7. Pantera Capital: Regulated, transparent, onshore and/or audited trading platforms are gaining market share dramatically, with compliant trading platforms up 30% since October.

8. Seven Japanese companies, including Mitsubishi UFJ Trust and Bank, Japan Trading Platform Group (JPX), Sumitomo Mitsui Financial Group and Mizuho Trust and Bank, plan to form a joint venture to build digital infrastructure. In addition to security tokens, the new company's technology will also be applied to utility tokens and crypto assets.

9. Ubs Wealth Management announced the issuance of $50 million of blockchain-based debt securities to high net worth individuals, with Hong Kong and Singapore investors buying six months of fixed-rate security-type tokens through a private offering using a licensed version of Ethereum.

10. Jpmorgan Chase, which made its first cross-border transaction using Polygon blockchain, took place in the DeFi space.

11. There are 28 virtual asset ETFs globally, concentrated in North and South America. The two crypto ETFs listed in Hong Kong are the first virtual asset ETFs in the Asian market, marking a key step in the development of virtual assets in Hong Kong.

12. God V predicted "three major opportunities in 2023", wallet popularity, anti-inflation stablecoin, Ethereum landing.

13. Kraken Platform's new CEO predicts five crypto trends in 2023: cross-border payments, decentralized storage, business application NFT, decentralized social media, and self-hosting of cryptocurrencies.

14. BN joins the Executive Committee of the American Chamber of Digital Commerce.

15. OK launches BNB and opens transactions.

Long-term insight: To look at our long-term situation; Bull/bear/structural change/neutral

Intermediate probe: To analyze what stage we are in, how long will we be in this stage, and what situation will we face

Short-term observation: used to analyze short-term market conditions; And the possibility of certain directions and certain events under certain circumstances

Long-term insight

• Long-term on-chain costs

• Profitability on the chain

• Add new addresses and active addresses

• Stablecoin supply on the chain

(Chart below shows long-term cost on the chain)

Due to market and external reasons, the industry is facing the most difficult moment;

In the red range of the figure.

Historically, the red range and the nadir have generally lasted no more than three times as long.

The fastest would be 120% of today's time, or about twice as long if you take the median.

Then, there may be half a year or so left in the current status.

(The figure below shows the profit status on the chain)

The profit moment is shorter than it was in the entire 2017 cycle and longer than it was in 2013.

This figure can more accurately show the pain points and the condition of existence and small profit at the current stage.

This is tough for many organizations, and may be for some time in 2023.

(New address and active address below)

Since October 2021, both active and new addresses have stagnated.

And with more and more space for both, new addresses have fallen into a slump not seen in years.

Too many active addresses may lead to a certain degree of in-field combat, but without more to break into the base support, there will often be a lot of combat games, and bear the cost at the market price.

All sorts of pointless selling and impatient profit-taking by former participants.

(The picture below shows stablecoin supply on the chain)

On the big picture, it doesn't look like it's been a good year;

While many were cheering and analyzing the extension of the bull market, the supply of stablecoins and the overall purchase threshold began to drain significantly after the beginning of the year.

This is almost never seen before, without a lot of purchasing power support, prices like castles in the air, collapse.

Purchasing power is a very influential factor of market weight, the price support is sufficient; It just doesn't look good in 2022.

Expect to do even better in 2023.

Intermediate exploration

• Net position of total stablecoin in circulation

• Capitalized

• Purchasing power differential

• Number of non-zero balance addresses

• Online emotional positivity

• Accumulate trend points

• Average life expectancy

Fund position rating: Capital loss to be repaired, purchasing power to be repaired

(Chart below shows net position of total stablecoin in circulation)

As can be seen from the total circulation of stablecoin, there is still an outflow of stablecoin.

May intensify the level of stock game inside.

(Figure below has realized capitalization)

Capitalized by marking the specific number of BTCS at different prices, the total capital on the floor is counted.

With the loss of capital, there may be an "explosion point" and "reversal point" only after the current situation has been repaired. It is slightly difficult to rely on the stock to promote.

(Purchasing power difference in the chart below)

The number of stablecoins inside the trading platform has also been slightly low for a week.

May also face a purchasing power repair situation.

Growth status rating: inventory repair, growth phenomenon

(Number of non-zero balance addresses below)

Non-zero balance addresses get an inflection point of growth, and builders who may have been waiting for a long time are back in action.

But based on the capital situation in the field, the current participation in the construction needs to have full patience.

(The picture below shows online emotional positivity)

Trading sentiment is still in the process of repair, compared to before has a certain repair.

Accumulation status rating: Divergence, scarcity

(The following figure shows the accumulation trend queue)

Each address is still not unified opinion, resultant lack.

(Chart below shows average life spent)

At present, there is no high life coin for sale, the old bread coin is relatively calm, and the old ETH coin has a slight trace of sale.

Short-term observation

• Derivatives risk factor

• Option intent to volume ratio

• Derivatives volume

• Implied volatility of options

• Transfer of earnings and losses

• Add addresses and active addresses

• Crystal orange trading platform net position

• Net position on e-Pacific trading platform

• High weight dump pressure

• State of global purchasing power

• Net position on stablecoin trading platform

• Off-chain trading platform data

Derivative rating: Depressed, but risk reduced to relatively low

(The figure below shows derivative risk coefficient)

Derivatives risk has fallen to a low level and is relatively safer than it was before.

The empty side is going to get harder.

(Option intent to volume ratio below)

Option interest volume is low and participants are not taking bets.

(Chart below derivatives volume)

Derivatives trading is at a four-month low; In a very depressed state.

(Chart below shows options implied volatility)

Implied volatility is also falling, as more participants appear reluctant to place long or short bets in current conditions.

Whether it is short or long, it will be related to the potential space it creates.

There is now too little potential space for bears or bulls.

Emotional state rating: Moderate, but newly depressed

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

The stampede mood is also easing, before the heavy pain, has been relatively repaired.

(New address and active address below)

The number of active addresses and new addresses also fell sharply.

Although the emotional side has entered into remission, but the overall into a very depressed stage, need to get out of this stage.

Spot and selling pressure structure rating: no large selling pressure, slow accumulation.

(Chart below shows net position of Crystal orange trading platform)

The accumulation is gentle and the amount is small.

The market's true volume should be even thinner.

(Chart below shows net position of e-Pacific trading platform)

The accumulation of E tau is going down, just like it was before.

(High weight throw pressure below)

High weight selling pressure into low;

Accumulation and selling pressure environment are low, then the market potential up and down space power will become relatively small.

This is notable in trading preferences.

Purchasing power rating: Europe and the United States lead, but the stablecoin support power is not enough

(Chart below shows the state of global purchasing power)

European and American purchasing power leads, followed by Asian purchasing power.

The repair of overall purchasing power is slowly entering another stage.

Nearly two months, Europe and the United States slowly pulled back to repair the upper edge of purchasing power.

(Chart below shows USDC trading platform net position)

USDC inflows were weak, but slightly improved from previous losses.

(Chart below shows USDT trading platform net position)

USDT continues to drain, and the largest two stablecoins diverge to some extent.

Down chain transaction data rating :15000 or so are willing to buy

(Figure below shows data from Coinbase chain)

At 16000,15500 there is very thin buying intention, and at 15000 there is firm buying intention before.

(Figure below shows data under Binance chain)

16,000, 15,500 has very little appetite to buy.

(The figure below shows data under Bitfinex chain)

16,500, scattered, irregular buying intentions.

Until now, the chain trading platform orders thin

It also looks very depressed.

Summary of the week:

Summary of message surface:

1. The Federal Reserve seeks to cool down the economy without crushing it. Now it seems that the decision-making outlook of the Federal Reserve is complicated.

2. CPI is important, and it will fall more than people expect over the next year, because there is a bit of recession probability in between.

3. The first half of next year is likely to get off to a rough start. If interest rate hikes start to stop in the middle of next year, then the second half of next year will awaken signs of economic recovery, which will lead to a recovery.

Especially in the face of rate cuts, the Fed will have more room to maneuver in a decade if it reverses course.

It is crucial for the crypto world to watch this inflection point.

The cultural, technological, and environmental changes that would follow if a new, protracted round of draining were triggered are enormous, and the Fed has the power to change things.

In the short term, due to a series of bad environment and on the chain, the low probability of the crypto market will continue in the short term.

Long-term insight on the chain:

1. This is the toughest part of the cycle and is expected to continue for some time.

2. The profit profit moment of this round is shorter than that of the whole cycle of 2017, and longer than that of 2013;

3. Since October 2021, both active addresses and newly added addresses have stagnated, and newly added addresses are increasingly depressed;

4. While many were cheering and analyzing the extension of the bull market, stablecoin supply and overall purchase thresholds began to drain significantly after the beginning of the year.

• Market tone setting:

Market momentum began to collapse at the end of 2021, and after losing the support of purchasing power at the end of the first quarter of 2022, the market began to collapse on a large scale.

The current situation is likely to continue for some time, and the new forces are noteworthy.

Mid-chain probe:

1. There is a phenomenon of capital loss;

2. In-market purchasing power to be repaired;

3. The number of non-zero balance addresses has increased;

4. Slightly repaired trading sentiment;

5. There are differences and shortages in the accumulation of addresses;

6. The old bread coin is relatively quiet, and the old ETH coin has a slight selling trace.

• Market tone setting:

The stock situation slightly repaired, but the overall consistency of the general direction did not appear.

Strategy suggestion: heavy shock strategy, trend strategy momentum is not obvious.

Short-term observations on the chain:

1. Derivatives present a downturn at the present stage;

2. The risk of derivatives is relatively low;

3. Stampede sentiment and market sentiment continue to ease;

4. New addresses and active addresses entered the downturn;

5. The accumulation of withdrawals on the trading platform becomes weak;

6. High weight selling pressure is also at a lower stage;

7. The purchasing power of Europe and the United States ahead of Asia is still being repaired;

8. Stablecoin support is relatively weak;

9. The off-chain trading platform shows purchase intention below 15000;

10. The probability that the price will not exceed 18500-20000 in the short term is 61%.

• Market tone setting:

The market is depressed and dull.

Strategy suggestion: It is suitable for trading strategies in a very short period of time. The time loss of trading strategies over the medium term may be higher. Of course, the position will have certain advantages.

Risk warning:

The above are market discussion and exploration, and do not have directional opinions on investment; Please treat carefully and prevent the market black swan risk.