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Week 9 On-chain data analysis: the overall purchasing power is still partial stock, and long-term participants slowly increase their holdings

WatchToweR Crypto

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The overall pressure level of the market is not high, to undertake a slight increase in capacity.

原文标题：《温茶煮酒，醉卧蓬莱｜WTR 2.20 》

原文作者：WatchToweR Crypto

Review of the week

This week, from February 14 to February 20, the highest was near $25,290 and the lowest was near $21,485, with a swing of about 17%.

Observe the chip distribution chart, there are a large number of chips sold around $24710, there will be some support or pressure.

• Analysis:

1. $22,500 ~ $28,000 approximately 1.65 million pieces;

2. $18,500 ~ $22,000 about 2.07 million pieces;

Within a short period of time, the probability of falling to $16500 ~ $20500 is 62 %.

Important information

Economic news

1. Us quarterly CPI rose 6.4% on-year at the end of January, down from 6.5% previously and higher than expected by 6.2%; CPI was 0.5% month-on-month, up from 0.1% and in line with expectations of 0.5%.

a. Q/Q core CPI rose 5.6% y/y at end of January, down from 5.7% exp., above 5.5% exp., up 0.4% m/m, 0.4% exp., 0.3% exp.

b. CPI fell for the seventh consecutive month.

c. The Fed's final rate forecast is 5.27%, with a near 50% chance of a rate hike in June and a rate cut to 5.055% in December.

2. Us retail sales grew at 3% m/m in January, up from 1% and above expectations of 1.8%.

a. Most of the market believes that consumption is resilient and will remain strong in the future.

3. The February New York Fed manufacturing index was 5.8 percent, up from 32 percent and above 18 percent expectations.

2. Retail investors have poured a net $1.51 billion a day into U.S. stocks over the past month, a record.

5. U.S. crude oil fell 4.24 percent and crude oil fell 3.92 percent, its third weekly loss in the last four weeks.

6. U.S. gasoline and natural gas futures continued to fall in tandem.

7. European natural gas fell more this week than last.

8. COMEX and New York gold futures fell.

Encrypted ecomessaging

1. Soros Fund Management increased its exposure to crypto companies late last year.

a. Buy $39.6 million worth of convertible notes from crypto miner Marathon DigitalHoldings.

b. Owns nearly $200 million in MicroStrategy preferred stock.

2. Singapore's DBS Group is planning to apply for a cryptocurrency licence in Hong Kong so it can sell digital assets to Hong Kong clients. Cryptocurrency trading platform revenue is expected to grow 60% to 70% this year.

3. The giant stockbroker Interactive Brokers announced the launch of cryptocurrency trading in Hong Kong, enabling Interactive Brokers Hong Kong's professional investor clients to trade flat pie and ether.

4. 香港特区政府宣布：在政府绿色债券计划下成功发售 8 亿港元的Token化绿色债券。这是全球首批由政府发行的 Token 化绿色债券。

5. In June, Hong Kong introduced a licensing system and added a "Hong Kong section" to the currency market to support Hong Kong business.

6. The Virtual Assets and Related Activities Regulations 2023, published by the Dubai Virtual Assets Authority (VARA), set out a comprehensive framework for virtual assets.

7. In 2022, there were 41 encryption lawsuits in the United States, 19 of which came from the SEC. The SEC fine includes, but is not limited to, Nexo's $45 million; Bloom Protocol, $30.9 million; $30 million from Kraken; EOS $24 million; $25 million Tezos; LBRY $20 million and so on. (The outcome of XRP is unknown, and XRP does not agree to settle, and insists on litigation with SEC; Gray sued the SEC last month)

8. BN expects to pay the fine to settle existing U.S. regulatory and enforcement investigations into its business, said Patrick Hillmann, BN's chief strategy officer.

9. Tencent Cloud has reached a strategic ecological partnership with the extensible blockchain Multiversx to explore and run the MultiversX network verification node.

10. China Telecom will cooperate with Conflux Network to pilot a blockchain-enabled BSIM card in Hong Kong.

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

• Crystal Orange and E Tai Fang trading platform flow

• Macro selling pressure

• Accumulation of long-term investors

Trading volumes, where money will be concentrated, have shifted.

(The figure below shows the flow rate of trading platform between Rock Sugar Orange and E-Tai Fang)

As discussed in last week's report, the main logic is risk aversion, or simply the transfer of instability to a reservoir.

As for the current macro data state of the market, due to the instability caused by the surge in prices after the rise, some people have shifted their risk appetite to the crystal orange.

There has been an incipient risk aversion and a bit of caution is needed in the medium term.

Of course, this data is not very sensitive, there is a certain slow-motion, need to cooperate with more data and structure to see.

(Macroscopic selling pressure below)

On the other hand, the data, the overall macro pressure is not very big, has touched 12 years only 6 macro selling down point.

Current macro - selling pressure remains at the historical bottom.

With less selling pressure, markets are more sensitive to purchasing power and derivatives.

(Chart below shows accumulation of long-term investors)

Long-term investors have accumulated near record highs, but have recently slowed their pace of buying, and the market is gradually consolidating.

But the pace of recent buying has slowed, perhaps because intentions are starting to weaken as prices rise;

Generally speaking, history will usher in a certain consolidation.

Intermediate exploration

• Total supply and charge held by long-term participants

• Profit and loss status of long - and short-term money charging to the trading platform

• Short-term trader profit and loss status

• The availability of profits for short-term traders

• Total circulation of stablecoins

• Purchasing power differential

Long-term group rating: Slowly absorbing chips

(Chart below shows total supply and money filled held by long-term traders)

Yellow line: Long traders hold supply

Blue line: Amount of money charged by long-term traders

Long - term traders are still maintaining a slow increase in holdings, at the same time, their money is slowly shrinking, hovering.

It is possible that the current long - term trader enters the phase of slowly absorbing chips.

Profit and loss structure rating: The "loss flight" of long-term participants is slightly unwound, and short-term traders may enter a structured "profit taking" state

(The following figure shows the profit and loss status of long and short term currency charging to the trading platform)

From the perspective of structural inference, long-term participants will show "loss flight" at the last pass of a bear market cycle, which may be the last wave of bear market selling force;

Since long-term participants hold money for a longer time and are easier to count, it is possible that after their "flight from losses" is unwound, there will be one less layer of potential stress in the market, thus increasing the weight of "profit sellers".

Combined with the position of long-term traders, there may be a parallel between "loss flight" and "overweight", which may indirectly observe the market's taking on swaps.

(Chart below shows short-term trader profit and loss status)

Yellow line: short - term trader profit supply amount of money

Green zone: short-term traders

Short-term traders are at the point where the profit supply ratio is above 97.5%, which usually creates resistance to the upside.

May need more funds to carry out a strong push, when the more sophisticated market financial support.

From the current structure, short-term traders have the possibility of profit settlement.

At the same time, considering that the market is biased towards the stock game state, under such conditions, small emotions may generalize to various groups, and it may be necessary to avoid the structural stop profit state of short-term traders at present.

(Chart below shows short-term trader profit supply)

At least 87% of short-term chips are in the profitable state. From the perspective of profit structure, if there is a lack of incremental funds in the future, it may be necessary to wait for the number of profit chips to return to 50%-60%, so that the resistance of profit chips in this state can be alleviated to a certain extent.

Purchasing power rating: The stock game

(Figure below shows total circulation of stablecoins)

The total amount of stablecoin in circulation is currently reducing the outflow of the situation, the market may be gradually changing the wait-and-see attitude.

From the point of view of the current structure, when the circulation of stablecoin does not increase, the overall purchasing power is still partial stock state.

Perhaps the current problem is no longer the various groups of selling pressure imposed on the floor, but the growth of the overall purchasing power.

Detailed to the floor, look at the purchasing power of the trading platform.

(Purchasing power difference in the chart below)

Trading platforms are still in a state of partial outflows, perhaps now is not too hasty to aggressively add to the time.

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 of aunt trading platform

• High weight dump pressure

• State of global purchasing power

• Net position on stablecoin trading platform

• Off-chain trading platform data

Derivative rating: The risk of derivatives is in the danger zone

(The figure below shows derivative risk coefficient)

At the same time the trading volume of derivatives rose, the risk coefficient of derivatives also swung from neutral to safe area to near the edge of the danger zone.

This week, the risk coefficient of derivatives has a large swing. When the swing is large, it means that the market may have a large swing, so it is necessary to pay attention to the risk.

(Option intent to volume ratio below)

While prices have risen this week, options volume has fallen, possibly because options traders are taking a wait-and-see approach to future performance at current levels.

Among them, the proportion of put option has increased, and the overall transaction intent ratio is in a more balanced state.

(Chart below derivatives volume)

The overall volume of derivatives at the current level also showed a large decline, from the perspective of the volume of derivatives, the market at the current level of wait-and-see.

(Chart below shows options implied volatility)

Option implied volatility broke last week's downward trend and participants' willingness to place bets increased.

Emotional state rating: Overall neutral

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

Loss transfers continued to fall this week and are currently at low levels, while earnings transfers are showing signs of falling after a brief pullback.

From the perspective of profit and loss transfer:

The current price loss transfer volume is low, that the current market short - term loss chips less.

The profit chips did not appear very high willingness to sell.

(New address and active address below)

The number of new and active addresses has increased, and the active addresses are still at a high level, indicating that the current market activity is good.

Spot and pressure structure rating: cumulative chips gradually decline, pressure easing.

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

With the overall trading platform net position being an accumulation of inflows, the current price performance suggests a relatively strong capacity to take on.

The current accumulation of chips has declined, for the afternoon market, selling pressure has also eased.

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

This week's E is a continuation of last week's continuous outflow of cumulative state, in which with the pull up of the price, the outflow also decreased.

(High weight throw pressure below)

The high weight selling pressure of E Tai did not affect the market last week, and the current high weight selling pressure of E Tai and crystal orange is calm.

Purchasing power rating: The global purchasing power is weak, and the purchasing power of stablecoin has rebounded.

(Chart below shows the state of global purchasing power)

This week purchasing power rebounded faster in Europe, slightly less in the Americas and almost entirely absent in Asia, after a fall in global purchasing power overall.

(Chart below shows USDC trading platform net position)

USDC reversed the outflow trend, this week has a larger USDC inflow.

From this point of view, the future market capacity to undertake and purchasing power will be enhanced.

(Chart below shows USDT trading platform net position)

In contrast to the USDC style, the USDT has a lot of outflow.

Down chain transaction data rating :21330 -- 23780 willing to buy

(Figure below shows data from Coinbase chain)

Wish to buy at 23780.

(Figure below shows data under Binance chain)

23450 level is willing to buy.

(The figure below shows data under Bitfinex chain)

21330, 21550 Some interest in buying.

Summary of the week:

Summary of message surface:

1. Combined with the CPI report and retail sales data released this week, the CPI decline has slowed down slightly and the endogenous momentum shows resilience. The market believes that the consumer is in good shape and the US economy may hardly enter a recession.

2. The optimism of the market may bring inflation stickiness. CPI may still have fluctuations in some months in the future, but it cannot change the downward trend.

A. After May, tame inflation data will set the stage for a halt to tightening and the first rate cut.

3. In the face of multiple factors such as deglobalization, underinvestment, tariffs and sanctions, both institutions and retail investors are looking for hot spots, and crypto assets have become one of the allocations that comply with market demand.

Long-term insight on the chain:

1. There has been a preliminary risk-off sentiment, and the money is slowly flowing into the rock orange, which may require a little caution in the medium and long term;

2. The current macro selling pressure still remains at the historical bottom;

3. But also from the perspective of long-term investors, the current accumulation to close to a record high, but recently slowed down the pace of increasing holdings, the market is being gradually consolidated.

• Market tone setting:

The macro picture may take time to sort out, but it won't be too stressful.

Mid-chain probe:

1. Long-term participants increase their holdings slowly, at a slower rate;

2. The "loss flight" of long-term participants is slowly shrinking;

3. Short-term traders have the possibility of structural stop profit;

4. Purchasing power is still surplus on the whole, and slowing the outflow may be a new start.

• Market tone setting:

Change hands, stalemate

Short-term traders enter the structural stop profit state, 87% of short-term chips are in the profit state, but the long-term group itself is low selling pressure, and slowly increase holdings, may have relatively anxious hand change behavior in the short and medium term.

Strategy suggestion: temporarily consider fixed time, or wait and see.

Short-term observations on the chain:

1. The risk of derivatives increases and the swing degree of derivatives models increases, which may lead to the risk of large market fluctuations;

2. Trading volume has fallen;

3. The overall mood of the market is neutral;

4. Trading platform data shows that selling pressure accumulation has moderated;

5. The global purchasing power has weakened, and the purchasing power of stablecoin has rebounded.

6. The off-chain transaction data shows that 21330 -- 23780 have purchase intention;

7. The probability of not breaking $16500 ~ $20500 in the short term is 62 percent

• Market tone setting:

The overall pressure level of the market is not high, to undertake a slight increase in capacity.

Strategy suggestion: relative shock strategy is better.

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.