The 12th week on the chain data analysis: long-term participants appear loss selling, long liquidation pressure has been eased
The original title: "QingJin ambition, take zhiyuan | WTR 3.13"
WatchToweR Crypto
Review of the week
This week, from March 7 to March 13, the highest was near $24,517 and the lowest was near $19,521, with a swing of about 25%.
Observing the chip distribution chart, there are a large number of chips traded around $23337, which will have certain support or pressure.
• Analysis:
1. $22,500 ~ $28,000 about 1.53 million pieces;
2. $18,500 ~ $22,000 about 2.54 million pieces;
In the short term will not break in $16500 - $20500 probability is 78%.
Important information
Economic news
1. Us February ADP payrolls rose 242,000 vs. 200,000 expected vs. 106,000 last. January was revised to show an increase of 119,000.
2. U.S. job openings fell by about 410,000 positions to 10.824 million in January from a revised 11.234 million in December, still above market expectations of 10.5 million.
a. Stronger labor market demand, putting upward pressure on wages and inflation.
3. February nonfarm payrolls added 311,000 vs. 225,000 vs. 517,000.
a. Unemployment rate of 3.6% in February versus 3.4% expected and last;
b. Average hourly earnings increased 4.6% y/y, vs. 4.7% exp., vs. 4.4% last.
4. The Chicago Mercantile Exchange said it would launch options based on US dollar/offshore renminbi futures on April 3.
5. Us crude oil, crude oil, US natural gas and gasoline are all down this week; Gold ended the week slightly higher after falling mid-week.
Encrypted ecomessaging
1. Fed Vice Chair: The Fed has assembled a team to study cryptocurrency innovation.
2. The Utah Legislature, United States, passed the Utah Decentralized Autonomous Organizations Act (Utah DAO Act), becoming the first state to pass legislation recognizing decentralized Autonomous organizations (DAO).
3. Finance Minister of Thailand: The Thai Cabinet approved exemption of corporate income tax and value-added tax for companies issuing digital investment tokens to boost financing for both listed and unlisted entities.
1. Russia will allow international trade in Bitcoin and cryptocurrencies in July, according to the head of Russia's finance committee.
5. FTX sold its stake in Sequoia Capital to ABU Dhabi's sovereign wealth fund for $45m.
6. ARK Invest fund, which added $29.8 million in CB shares over the past week.
7. The development team of GongchainSUI said that it has officially signed a cooperation agreement with Aliyun to develop a sustainable Web3 ecosystem on Sui.
8. BN launched a prepaid encryption card in Colombia that allows users to make purchases and pay bills with cryptocurrencies offline or online at more than 90 million merchants worldwide.
9. Report: DeFi replaces CeFi as VC's favorite.
10. Silicon Valley Bank explosion. Circle has about $3.3 billion in reserves at Silicon Valley Bank.
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
• Long-term participant holdings
(The figure below shows the flow rate of trading platform between Rock Sugar Orange and E-Tai Fang)
Industry participants are shifting their savings from the biggest cryptocurrencies to the higher-yielding ones.
This in part confirms that market participants are shifting from risk aversion to the search for yield.
That could create a positive mood for the market.
In general, real money bets tend to be more convincing, so this data generally carries some weight of meaning.
(Chart below shows long-term participant holdings)
The total holdings of long-term participants have fallen into a sluggish state, and market participants are still dominated by derivatives and short-term participants.
Because short-term and derivative participants have strong demand for profit and time, they will have certain interference and leverage effect on the market, so they may bring more agitation and volatility to the market.
The weakness of long-term players may slow the market's recovery relative to the long-term trend.
The strength of the market may also decline.
Intermediate exploration
• Long-term participants have realized profit and loss and full currency status
• Short-term participants have realized profit and loss and full currency status
• Cost group
• New force
• Online emotional positivity
• Purchasing power differential
Long and short player ratings: Long players have released a loss selling, short players are currently at around 19850 cost
(The following figure shows the situation of long-term participants who have realized profit and loss and charged coins)
Dark blue area: The amount of earned money charged by long-term participants
Light blue area: The amount of money charged at a loss by a long-term participant
From the point of view of this situation, long-term participants have a certain range of losses to fill the amount of money, may be the market situation makes them produce loss selling behavior, resulting in a certain range of market decline.
Combined with the short - term participants' money - filling situation, further discussion.
(The following figure shows the situation of short-term participants who have realized profit and loss and charged coins)
However, short-term participants do not show the state of enlarged loss charge when the price drops, which may need to be analyzed based on some factors.
In order to analyze the structure clearly, the cost of short-term participants is deeply disassembled.
(Cost group in the figure below)
About the pressures on the market.
Red line: Average cost for short-term traders
Blue area: Short term cost > market price of crystal orange
1. The current cost of short-term traders is about 19850. If we think about the pressure of the market from the perspective of short-term cost, they may bear the pressure of loss when their cost price is always higher than the market price, resulting in selling.
2. In this case, their average cost price will also become the "pressure level" that the market needs to break through;
3. On the contrary, if their costs are above market prices, they may form positions anchored by short-term traders;
4. From the perspective of deduction, if the market has insufficient liquidity support, if the price continues to be lower than the cost of short-term traders, it may lead to a certain degree of loss selling. At this time, some new liquidity supply may be needed to make up for the existing problems in the market.
5. Currently, it is still not lower than the cost of short-term traders. This situation may not happen, but we can make some psychological judgments in advance around the dynamic curve of short-term cost.
6. At the same time, when the market is near a bottom, it may be a good thing for the market to repair if liquidity supplies help push prices above short-term traders' costs.
About the strategy suggestion:
It is possible that the short-term cost is higher than the price of crystal orange, which can become a key reference position for investment or hedging.
This can be around this price for some capture low chips or hedging operations.
On-chain heat rating: May be entering the repair phase
(The picture below shows the new force)
It is possible that the market may be in a healing phase where it will take time to smooth over the dramatic changes in sentiment that have been triggered.
(The picture below shows online emotional positivity)
Market network enthusiasm fell to a low position this year, may be on this basis will gradually show signs of price repair. Of course, time may be lost in this process.
(Purchasing power difference in the chart below)
Purchasing power differentials are still low and need to be observed.
Perhaps to get out of the positive market, the crucial purchasing power is necessary.
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: Long risk to digest, is short.
(The figure below shows derivative risk coefficient)
As can be seen from the chart, the derivative risk coefficient has fallen from the safe zone, which indicates that the derivative risk in the current market has been alleviated to some extent, and the liquidation pressure of the bulls has also been reduced.
(Option intent to volume ratio below)
Over the past week, put rates and volume have risen rapidly as the market has pulled back.
(Chart below derivatives volume)
Derivatives volumes fell sharply on the macro news and the SVB bank incident, but recovered as prices recovered and the impact of the incident was absorbed.
If derivatives volumes continue to grow steadily, that would be a positive sign for the future.
(Chart below shows options implied volatility)
The increased volatility of options implied volatility reflects the increased activity and willingness of options traders in the current market to place bets.
Emotional state rating: Loss panic has eased
(The figure below shows the transfer of profit and loss)
Last week, when the price correction, the transfer of loss gains rose rapidly, indicating that the loss chips are eager to sell, the market decline by the loss of fear greatly affected.
At present, with the digestion of macro events, the loss panic mood has been reduced, but the profit chip has a strong willingness to sell, for the afternoon market, the need for stronger capacity to undertake.
(New address and active address below)
The overall number of new and active addresses is high, indicating that the current market activity level is good.
Spot and selling pressure structure rating: outflow accumulation, selling pressure is less.
(Chart below shows net position of Crystal orange trading platform)
At the current price, the net position of the ice orange trading platform is outflows, indicating that the spot market selling pressure is relatively light.
(Chart below shows net position of e-Pacific trading platform)
E-tai is almost in line with the pace of the crystal orange, trading platform net position is outflows, the spot market selling pressure is relatively light.
(High weight throw pressure below)
With the rebound of the price, E Tai also appeared at the same time a low volume of high weight pressure signal.
Purchasing power rating: global purchasing power has a warming signal, stable currency purchasing power medium weak.
(Chart below shows the state of global purchasing power)
The rebound in purchasing power signals in Europe and the Americas indicate some recovery in both regions, and the current outflow of purchasing power in Asia.
Such as Europe and the United States two weeks of purchasing power continued to pick up this week, then for the afternoon is a more positive signal.
(Chart below shows USDC trading platform net position)
The USDC has been in a state of inflow accumulation, but some of this may not translate into current market purchasing power due to the FUD events of the USDC.
Combined with the continued outflow of USDT, the overall purchasing power of stablecoins has weakened slightly this week.
(Chart below shows USDT trading platform net position)
The USDT is always in a state of outflow accumulation.
Down - chain transaction data rating :20000-21500 willing to buy
(Figure below shows data from Coinbase chain)
21100, 21500 price is willing to buy;
22850, 23000 level there is a willingness to sell.
(Figure below shows data under Binance chain)
Willing to buy at 20000 price;
22535, 22570 level there is a willingness to sell.
(The figure below shows data under Bitfinex chain)
Interest at 20500.
Summary of the week:
Summary of message surface:
1. At his confirmation hearing this week, Powell warned that strong data could accelerate the pace of rate hikes, which could end up being higher than previously thought, and that decisions would be made meeting by meeting based on the impact of the totality of data on inflation.
2. Us payrolls rose more than expected in February, partly reflecting a protracted Labour market that could prompt the Fed to remain hawkish going forward; Average hourly earnings, a measure of monthly wage growth, slowed over the same period but are unlikely to push inflation down quickly any time soon.
3. As one of the key indicators on which the Fed's rate hike path depends most, the stronger-than-expected February nonfarm report could prompt the Fed to raise rates at a faster pace. The timing of the increase is a week away, and the consensus is that it will be extended to June.
Just as the market had priced in a rate rise, the pace of growth had not cooled, and Silicon Valley Bank was unable to pay its debts and went bankrupt.
Circle, which had $3.3 billion in Silicon Valley banks, was sold off and briefly depegged from the dollar.
The most important thing in capital markets is trust, and different types and lineups of institutions have diverged at this time. For cautious and stable institutions, basically choose to sell or exchange dollars or other.
The market deserves respect, and if the pursuit of profit in extreme circumstances, tolerate wild swings and pullbacks, while taking risks, is not necessarily a worthy trade.
This time, the impact on stablecoin is not just to cover losses, but to its original advocacy of stability.
After this experience, many people are already thinking about a new decentralized stablecoin.
The recent explosion of Silicon Valley banks, potential crises and problems at major banks, have led more people to rethink the meaning of encryption and refocus on the crypto space.
As Satoshi Nakamoto chose to introduce Bitcoin to the world at the time of the global financial crisis in 2008, he said in introducing his innovation:
"The fundamental problem with traditional money is trust.
Central banks have to be trusted not to devalue, and historically that credibility has never existed.
Banks must be trusted to manage money and circulate it electronically, but they use money to create credit bubbles that deflate private wealth.
This paper presents a kind of electronic cash system which is realized entirely by point - to - point technology. It enables online payments to be made directly from one party to the other without going through any financial institution."
Encryption has never been about beating anyone in the future. It has been about providing a chance to diversify options in a world that already has few.
The banking crisis of 2008 gave birth to the crypto space, and the recent banking crisis in Silicon Valley will have a long-term impact.
No one knows, but the only thing that is clear is that the world may be turning more eyes from elsewhere to the crypto space.
Long-term insight on the chain:
1. Industry participants are shifting their savings from the biggest cryptocurrencies to the relatively higher-yielding ones.
2. The total holdings of long-term participants have fallen into a slow state. Currently, market participants are still dominated by derivatives and short-term participants.
• Market tone setting:
May bring turbulence and volatility.
Mid-chain probe:
1. Long-term participants have experienced a certain degree of loss selling, which has gradually shrunk;
2. Short-term participants often make the loss of selling pressure is not too big;
3. The cost price of short-term participants at 19850 May become the liquidity support level at this stage, which should be noted;
4. The repair speed of the new force is slow;
5. Network emotions may be in a state of gradual recovery;
6. Purchasing power differentials remain low and may need to wait to be repaired.
• Market tone setting:
repair
Medium-term domestic demand to pay attention to the price position of more than 20000, may be the liquidity support level at this stage, at the same time, due to the "tying" speed is too fast, the market may need to tidy up for a period of time.
And, of course, dynamic exploration is required.
Short-term observations on the chain:
1. Derivative risks have been digested and the pressure of long liquidation has been eased;
2. Medium low trading volume of derivatives; There is a short squeeze in the market;
3. Market panic has abated;
4. The trading platform data shows that the outflow of chips accumulates and the selling pressure is slightly lower;
5. The global purchasing power shows a warming signal, and the purchasing power of stablecoin is moderate and weak;
6. The purchasing power of Europe and America is back to positive, while that of Asia is still in negative territory;
7. The off-chain transaction data shows that there is a purchase intention near $20,000 - $21500;
8. The probability of not breaking $16,500 ~ $20,500 in the short term is 78%.
• Market tone setting:
There are signs of stabilization in the market, with sentiment easing and selling pressure levels low.
Strategy advice: Cautiously optimistic, but watch out for short squeeze
This article is from submission and does not represent the views of BlockBeats.
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