Week 2 on-chain data: long-term investors' chip accumulation has reached a new high; Watch for the shift in derivatives

The original title: "the light from wind, lift into the upper air | WTR 1.16"

原文来源： 「WTR」研究院所

Review of the week

This week, from January 10 to January 16, the highest was near $21,449 and the lowest was near $17,140, with a swing of about 25%.

Observe the chip distribution chart, there are a lot of chips traded around $16474, there will be some support or pressure.

• & have spent Analysis:

1.  16500 ~ 21000 about 4.29 million;

2.  21,500 ~ 25,000 about 760,000;

• & have spent In the short term can not break in 16500~18500. The probability is 72 percent.  

Important information

Economic news

• & have spent United States

1.  January University of Michigan Consumer Sentiment Index:

1.  According to the Labor Bureau, the CPI for December is as follows:

a.  December CPI up 6.5% vs. exp. 6.5% vs. 7.1% last; -0.1% m/m, in-line with expectations, vs. 0.2% last;

b.  Core CPI excluding energy and food rose 5.7% y/y vs. 5.7% exp. & 6% exp. Rose 0.3% m/m, 0.3% expected and 0.2% last.

c.  Changes in itemized data

a.  The overall CPI growth in December was negative on a month-on-month basis, mainly driven by energy and commodity items, while services and food items rose on a month-on-month basis.

b.  The month-on-month decline in CPI is the first decline since May 2020 and the third consecutive slowdown in growth.

a.  December's inflation rate was the lowest since October 2021;

a.  Core inflation in December was the lowest since December 2021.

2.  Both 10-year and 2-year yields fell sharply after the CPI this week, and the dollar index fell this week.

• & have spent UK & European Union

1.  Amazon announced this week that it would close three UK warehouses.

2.  Germany's full-year growth for 2022 was 1.9 percent, down from 2.6 percent in 2021 and slightly above market expectations of 1.8 percent.

3.  The central bank of Russia said that starting from January 13, 2023, the resumption of foreign exchange trading operations in the Russian domestic market will use yuan as the main reserve of the national wealth fund.

• & have spent Asia

1.  Japan's 10-year government bond yield breached its new 10-year ceiling again this week. In an effort to stabilize the bond market, the Bank of Japan announced that it would conduct additional JGB purchases on Jan. 16, depending on market conditions.

2.  China's CPI in December 2022 rose 1.8% year on year, compared with 1.6% in the previous reading and unchanged month on month. For the whole of 2022, the CPI rose by 2.0 percent over the previous year.

3.  China's producer price index (PPI) fell 0.7% on-year in December, compared with -1.3% in the previous month and 0.5% month-on-month.

a.  In December, the purchasing price of industrial producers increased by 0.3% year-on-year and decreased by 0.4% month-on-month.

b.  For the whole of 2022, producer prices rose 4.1 percent from the previous year, and producer purchasing prices rose 6.1 percent.

• & have spent other

1.  Emerging market countries have raised about $41bn in international bond markets this month through January 14, according to Dealogic. In comparison, only January 2021 has raised more than that amount in January of the past 10 years.

2.  WTI February crude futures, Brent March crude futures, gold all closed higher.

Encrypted ecomessaging

1.  Stablecoin USDC Treasury, transferring 200 million USdcs to CB, an encryption platform.

2.  CyberX, A cryptocurrency market maker, closed a $15 million Series A round led by Foresight Ventures.

3.  Group One, a trading company, bought 13.5 per cent of the company. Weice is one of the largest crystal orange holders, with about 132,500 flat cakes as of Dec. 28.

4.  BN founder CZ: Will continue to expand the scale in 2023, the staff growth target is between 15% and 30%.

5.  BN co-founder He Yi: The $1 billion "Recovery Plan" is pushing ahead with two relatively large deals involving two trading platforms.

6.  After the "Shanghai Upgrade" allows the pledged E Tai Fang withdrawals, the amount pledged will increase by 50% or more; E Tai Fang will experience deflation in 2023, with total supply in circulation falling by at least 1%.

7.  First Ethereum core developer conference in 2023: Shanghai upgrade in early February to launch the public beta network, March to launch the main network.

8.  Electronics giant Samsung has listed bitcoin futures ETFs on the Hong Kong Stock Exchange and said it intends to list cash ETFs.

9.  Hdac, the crypto subsidiary of South Korea's Hyundai Group, has announced that it will issue fiat Stablesoins in British Guiana for regulatory approval.

10.  Hong Kong's Securities and Futures Commission chief executive said at the Asian Financial Forum that retail investors will be limited to trading in highly liquid assets after new licensing rules for virtual asset service providers come into force.

11.  Hong Kong Securities and Futures Commission: will allow retail trading of a specific group of cryptocurrencies.

12.  Financial Secretary Paul Chan at the Web3 Innovators Summit in Hong Kong: Hong Kong welcomes cryptocurrency companies from around the world.

13.  Prince Philip of Serbia says he is trying to get his country to buy Bitcoin.

14.  ARK's funds added another $2.5 million to their CB holdings, making them their 12th largest. ARK has increased its holdings of CB three times in January this year.

15.  Morgan Stanley European Opportunity Fund: Purchased $3.6 million worth of grayscale GBTC. Back in August 2021, Morgan Stanley had over 30 different funds invested in GBTC.

16.  Blackrock: 65% of USDC's reserves have been invested in government money-market funds managed by BlackRock.

17.  Hedge fund Saba Capital: Adding bitcoin to its fund portfolio. Saba Capital manages about $10 billion.

18.  Bank of New York Mellon CEO says digital assets are the bank's longest term investment and admits it must adapt to technological change.

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

• & have spent Long-term investor chip accumulation status

• & have spent Non-liquid large group chip accumulation state

Return to looking at macro markets in terms of time and group chip structure.

(The following chart shows the accumulation of chips by long-term investors)

The accumulation of chips by long-term investors has reached a new high, and the overall accumulation is similar to the situation in the second half of 2015, but has been comprehensively surpassed.

In terms of market structure, these people have historically been the top predators of the market.

Their overall position needs particular attention.

It is also a staunch supporter of the market and has some decisive weight in terms of macro trends.

Of course, another group determinacy is also important, namely the non-fluid large group bargaining chip state.

(The following figure shows the accumulation state of chips in large non-flowing groups)

At the same time, the accumulation of chips of large groups of illiquidity also reached a new high.

The state of the significant net position accumulated before is also one of the highest in 5-6 years.

There was a lot of leverage built up.

From the macro chain point of view of the industry in the future as time goes by, in the chip gradually increase the performance, the market can float chips will be less and less.

So there is plenty of data to support that the bullish effect will become stronger over time.

Of course, this is a long time scale, which can fluctuate from a few months to a year.

Intermediate probe  

• & have spent Network emotional positivity

• & have spent The amount of large single transfer over 10M

• & have spent Exchange trend net position

• & have spent The realized ratio from short to long term

• & have spent Multiple high weight selling pressure

• & have spent Purchasing power difference

• & have spent Total stablecoin in circulation

Trading sentiment rating: trading sentiment has increased significantly, the large single volume fell slightly

(The picture below shows online emotional positivity)

This index is mainly used to observe the change of trading sentiment in the medium term. At present, there is a substantial increase, which may indicate that the current market has certain signs of activity.

The current mood is similar to around July-August 2022 and July-August 2021.

(The figure below shows the transfer volume of large orders over 10M)

Large transfers of more than 10M account for a large proportion of the market, reaching 20% at present.

Historically, once they are active in the chain, it may be the threshold for price changes in the market.

Now it's slightly down.

Selling pressure rating: weak accumulation within the exchange, selling pressure is not applied many times

(Chart below shows net exchange trend position)

The current state of weak accumulation is still present.

From the blue area of the net position situation, the pace is relatively slow, may still need time to accumulate.

But the build-up is a visible trend. These accumulated chips once out of the exchange, may constitute a significant potential selling reduction on the floor.

Of course, floor price changes are mostly based on liquidity, and accumulation simply compresses the "quantity to sell".

(Chart below shows short - to long-term realized ratios)

From short to long term realized value.

The proportion of short-term participants has increased relatively recently.

(The following figure shows multiple high-weight pressure dumping)

Many high weight selling pressure is still at a low position, high weight group mood is relatively flat.

Purchasing power rating: Exchange purchasing power slowing outflow, supply slowing outflow

(Purchasing power difference in the chart below)

The purchasing power difference presents a state in which the outflow of purchasing power on the floor slows down.

It may still be in the logic of the stock market game, but selling pressure contraction is the left window of the market.

(The figure below shows the total circulation of stablecoins)

From a medium to long term perspective, stablecoin flux currently presents a state of slowing outflow

Short-term observation

• & have spent Derivative risk factor

• & have spent Option intent to volume ratio

• & have spent Derivatives trading volume

• & have spent Option implied volatility

• & have spent Transfer of profit and loss

• & have spent New address and active address

• & have spent Crystal orange exchange net position

• & have spent Aunt trading net position

• & have spent High weight throw pressure

• & have spent State of global purchasing power

• & have spent Stablecoin exchange net position

• & have spent Down chain transaction data

Derivative rating: short squeeze in progress, the risk of ambiguity, volume passionate

(The figure below shows derivative risk coefficient)

New variables are added after several periods; A more stable data relationship is displayed.

Now for derivatives, relatively high risk, long position will be more difficult or more dangerous.

Of course, the model has some limitations, and not all scenarios can be applied.

（下图 期权意向成交比 ）

  Call options have been rising since the end of December 2022, which has been a major factor in the recent price volatility.

Its price rise is putting pressure on $275 million worth of cycle options expiring Jan. 13, creating a short squeeze on bets at $16,500 or lower.

And the Gamma squeeze that comes with more bullishness.

(Chart below derivatives volume)

The option volume was larger than the futures volume, and the Gamma squeeze may be related to the seller hedging of market makers.

This time, the weight of the main affected option participants is larger than that of the futures participants.

(Chart below shows options implied volatility)

The previous big drop in IV (implied volatility) looked more like an overabundance of sellers, slowly opening up the IV curve after prices had already improved significantly.

Gamma is one of the options pricing factors, and an excessive squeeze to the upside can force sellers to buy large physical reserves to cover the risk.

At the same time, it will lead to sharp price fluctuations. It is worth noting that it is more necessary to observe whether a large number of call options continue to bet.

If prices continue to rise and a large number of bullish short-term bets continue, it will create a positive cycle of rising prices.

Emotional state rating: profit selling pressure rise, the market capacity to undertake rising

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

The first round of large profit selling pressure impact has ended, the market capacity to undertake a preliminary rise.

(New address and active address below)

Address growth is in good condition, holding off the decline of many months.

The overall mood is good.

Spot and sell structure rating: Preliminary accumulation, but E too opposite

(Below chart: Net position of Crystal orange Exchange)

A certain amount of coins are bought and accumulated.

(Chart below shows net position of E Pacific Exchange)

There is a certain amount of coins being transferred to the exchange, there is potential selling pressure.

(High weight throw pressure below)

High weight selling pressure as a whole did not appear particularly large improvement, high weight selling pressure is not large at present.

Purchasing power rating: Global purchasing power rising, stablecoin supply began

(Chart below shows the state of global purchasing power)

Global purchasing power recovered somewhat, after two months of wobbling and repair.

(Chart below USDC Exchange Net position)

USDC currency is strong, and the purchase intention is rich.

(Chart below USDT Exchange net position)

There is a certain outflow of USDT, and it cannot be ruled out that there is a certain degree of USDT coin tide.

Overall, Stablecoin judgment is a bit hazy, and the consistency of Stablecoin may be stronger next week.

So focus on next week's stablecoin data.

Down - chain transaction data rating: Purchase intention starts to increase

(Figure below shows data from Coinbase chain)

The market has a lot of buying intention; But it's much stronger at 16,500, 16,000, 15,500.

(Figure below shows data under Binance chain)

2000-19900 Purchase intention.

Seventeen thousand, sixteen thousand five thousand, sixteen thousand have lots of willingness to buy.

(The figure below shows data under Bitfinex chain)

19,000, 18,000, 17,000, 16,000 lots of willing to buy.

Summary of the week:

  Summary of message surface:  

1.  The probability of the Fed's next 25-point rate hike has become the dominant voice in the market. Interest rate cuts or quantitative easing are far off.

2.  The wave of layoffs at big companies around the world continues, with traditional financial giants such as Goldman Sachs and BlackRock joining the fray. BN, on the other hand, is hiring aggressively and implementing expansion plans through 2023.

For the macro;

Historically, a recession has never been the start of a decline, and the market has tended to beat it to the punch, while in the middle and late stages of a recession, the market has tended to complete a bottom or even produce some sort of rebound.

As things stand, it may not be very optimistic, but it is not very pessimistic, and the chances of a deep recession are small.

Stretch out the time cycle, choose the right time, risk assets are suitable for the layout of the year.

Back to encryption:

In the previous report, on November 28, 2022, we wrote about the market bottom space:

"So if it doesn't break cyclically, or worse, maybe $15,600 to $11,500 is a relatively more likely floor."

Fast forward two months and the market is back above $20,000.

In terms of the liquidity of crypto assets, it may be more sensitive and advanced than the traditional capital market.

We'll see a lot of this in 2021, when crypto assets first peak and then the capital markets slowly peak.

If this year is suitable for the layout of risk assets in the capital market, perhaps in the second half of this year, then the layout of crypto assets may be earlier.

After weeks of repair, the market seems to have come out of the shadows and gloom of the FTX.

Where the market goes from here, there is not much time and space left for participants and investors.

Long-term insight on the chain:

1.  The accumulation of chips by long-term investors has reached a new high, and the overall accumulation is similar to the situation in the second half of 2015, but has been comprehensively surpassed.

2.  Long-term investors are staunch supporters of the market and have some decisive weight in terms of macro trends.

3.  The accumulation of chips of illiquid large groups also reached a new high.

4.  The move follows a four-year high in the group below 20,000.

• & have spent Market setting:

The industry as a whole is being ratcheted down over time by some significant groups.

This is from a long-term macro view, firmly bullish forces and data.

Over time, if such groups continue to increase their holdings, the bullish effect of the market will become more and more intense.

Mid-chain probe:

1.  There are some signs of active trading on the chain;

2.  The transfer volume of large orders over 1M is relatively calm at present;

3.  The exchange shows weak accumulation;

4.  A relative increase in the proportion of short-term participants;

5.  High weight unloading pressure is relatively low;

6.  Purchasing power differentials and supply are slowing outflows.

• & have spent Market setting:

Stock neutral

From the current point of view, the selling pressure is low, the purchasing power to slow down the outflow of the field is still partial stock, neutral structure.

Strategy suggestion:

The current derivatives strategy needs to be carefully formulated.

Short-term observations on the chain:

1.  On the derivatives side, the short squeeze is now continuing, and the first phase of the short squeeze is preliminarily over;

2.  Then you need to keep an eye on the proportion of bets on call options;

3.  Profit selling pressure temporarily end market capacity to undertake rising;

4.  Address growth condition is good, hold the decadent trend for many months;

5.  The net position of the market is accumulated, while the E Pacific is divergent.

6.  High weight selling pressure did not change much, in the low;

7.  Global purchasing power began to rise, stablecoin flow direction appeared a certain divergence;

8.  Data below the chain shows that buying intentions in the market are beginning to increase;

9.  In the short term can not break in 16500~18500. The probability is 72 percent.

• & have spent Market setting:

The dramatic short squeeze caused a 30-plus per cent weekly rally, and as derivatives evolve, there will be more discretion in the future over changes in market structure.

The investment and research structure needs to be updated;

Strategic advice: pay attention to the derivatives of the turn and amplitude.

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.

This report is provided by the "WTR" Institute:

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