Week 21 On-chain Data: Global purchasing power slightly rebounds, stablecoin purchasing power declines.

Source: "WTR" Research Institute  

This Week Review

From May 16th to May 22nd this week, the highest price of Bingtang Orange was near $27500, and the lowest was close to $26518, with a fluctuation range of about 3.7%. Observing the distribution of chips, there is a large amount of chip transactions around $26083, which will provide certain support or pressure.

Analysis:

24000 - 29000 approximately 2.69 million pieces;

18500 - 23500 approximately 2.31 million pieces.

Short-term probability of not breaking below 20,000 ~ 24,000 is 59%.

Important News

Economic News

1. The May manufacturing index of the New York Federal Reserve in the United States was 31.8, significantly lower than the expected value of 2.5 and the previous value of 10.8.

2. This week, Powell sent a dovish signal, indicating a tendency to support no rate hike at the June meeting. Additionally, the credit tightening caused by the banking crisis may mean that the peak interest rate of the Federal Reserve will be lower than expected.

3. During this week's meeting with CEOs of major banks, Yellen stated that the US banking industry is still facing a crisis and there may be more bank mergers in the future. The market believes that this means more banks may be on the verge of collapse.

4. This week, US crude oil and Brent crude oil futures fluctuated and closed lower, with a smaller decline than last week. Gold futures fell this week, with a total weekly decline of 1.89%.

Encryption Ecology News

1. Tether will begin allocating up to 15% of its realized net operating income this month to purchase Bitcoin, in order to further strengthen and diversify its reserves.

2. The International Securities Regulatory Organization (OSCO) stated that it will provide the first globally coordinated set of rules for cryptocurrency assets, including how existing regulations apply to the industry.

Members of the International Organization of Securities Commissions (IOSCO), such as the U.S. Securities and Exchange Commission, regulatory agencies in Japan, the UK, Germany, and France, have all pledged to implement the recommendations of OSCO.

3、DeFi asset management platform Yield App has partnered with UK-based Volt to provide access to GBP and EUR, allowing Yield App customers to purchase cryptocurrencies instantly through their bank.

4. Bloomberg's latest survey: If the United States hits the debt ceiling, "gold, US bonds, and pancakes" will be the top three preferred assets for investors, more popular than other assets such as the US dollar, Japanese yen, and Swiss franc.

5. Europe already has the most crypto-friendly banks in the world, and with the implementation of MiCA regulations, their leading advantage may further increase.

There are 55 cryptocurrency-friendly banks in Europe, 24 in Asia, and 23 in North America.

6. The Singapore-based Huangpu Group will establish a digital bank in Bahrain.

7、The block reward for Litecoin (LTC) is expected to be halved on August 3, 2023.

8. Due to new guidelines related to stablecoins and investor restrictions provided to cryptocurrency exchanges, Binance has announced its withdrawal from the Canadian market.

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 this stage will last, and what situations we will face.

Short-term observation: Used to analyze short-term market conditions; as well as the possibility of certain directions and events occurring under certain conditions.

Long-term Insight

Global distribution of wallet status.

American wallet situation

"不安情绪变化比" translates to "Unsettled emotional changes are more" in English.

Macro spot selling pressure advanced version

  (Global distribution of wallet status as shown in the figure below)  

The blue represents the wallet in the US region.

The red color represents wallets in the Asian region.

Yellow represents the European wallet.

You can see that there is some support for the price when it comes to the overall global wallet.

Once there is a lack of unity or disagreement, prices often fall into a highly uncertain and tangled state. Currently, the global wallet status is weak and purchasing power is not strong.

In order to see the detailed status more clearly, we specifically selected the more distinctive wallet conditions in the US region.

(The status of the American wallet in the following picture)

The support role of the US wallet for prices seems to be more obvious. Often, when a large amount of US wallets flow out, the price will fall into a period of low tide for a period of time.

This is relatively important for mid to long-term trend analysis.

Currently, the relative inflow into the wallet is not positive, but it has weakened significantly compared to two months ago.

(The following chart shows the changes in anxiety levels.)

The market sentiment is gradually recovering from the risk aversion in the medium to long term.

The market's risk aversion sentiment is beginning to ease, which may result in a more stable effect compared to before.

(Macro spot selling pressure refinement version as shown in the figure below)

The macro spot selling pressure has reached a relatively low historical level.

From a historical perspective, the status of the green zone often signifies the bottom of a phase in time.

During a long-term bullish market, it is a good indicator for right-side entry.

In the long term of the market, it is a relatively good left-side investment indicator.

Mid-term exploration

Cost Basis GroupLong-term and short-term participants' deposit status.

Accumulation trend 分

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This week, we observed the market from the perspective of basic costs and on-site participants without translating any industry-specific terms or names. Please note that any English words or phrases, such as ZKS, STARK, and SCROLL, should not be translated and should be returned as is. If there are any links in the content that contain English characters, they should also be returned without translation. Additionally, if the content only contains punctuation marks, they should be returned as is. HTML tags, such as

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(Cost Group Basics in the following figure)

Blue line: Short-term participant supply

The red area: the net position of the distance between the market price and the liquidity support price.

Short-term participants are constantly withdrawing liquidity, and the distance between the on-site price and the support level of liquidity is narrowing.

During the risk release process, the change in market price distance from the liquidity support level may be more sensitive.

Meanwhile, the market will also be on edge. In the past, every time the liquidity support level collapsed, it led to a certain degree of sluggishness and pullback.

(Coin deposit status of long-term and short-term participants as shown in the following figure)

Considering the current supply status of short-term participants, a slight increase in their deposit amount may indicate that they are exerting some selling pressure.

Meanwhile, long-term participants have already shown two deposit behaviors, and the potential market pressure may change with the emotional escape of short-term participants;

Of course, we need to see more group dynamics.

(Accumulation Trend Below)

Accumulation trend display>10k addresses have restarted accumulation actions, and they may become relatively scarce buyers when liquidity is poorest in the market.

From the current situation, it seems that this large group may be a relatively critical holder.

Other holders, on the other hand, have shown relatively indifferent behavior and have not yet engaged in accumulation.

(CDD group in the following figure)

This data set summarizes long-term, short-term, and weekly CDD changes.

From the current trend, all three are in a declining stage.

可能代表着当前场内具有高权重（币数量较多或持有时间较长）群体的抛压状态轻微收缩。

This may indicate a slight contraction in the selling pressure of the group with high weight (holding a large amount of coins or holding for a longer period of time) in the current market.

Possibly helpful for on-site price fixing.

Short-term Observation

The translation of the given content is:

Derivative risk coefficient.

The translation of the given Chinese text is: "Option Intention-to-Trade Ratio".

The content you provided is:

Derivatives trading volume.

Options Implied Volatility.

Profit and loss transfer amount

新增地址和活跃地址 -> New addresses and active addresses

The net position of Bingtang Orange Exchange.

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High weight dumping

Global purchasing power status.

Stablecoin exchange net position.

Off-chain exchange data.

Derivative Rating: Falls to Neutral Zone, Risk Decreases.

(Derivative Risk Factor as shown in the figure below)

The risk coefficient has fluctuated at the boundary between the safe zone and the neutral zone in the past two weeks, and the price has also shown a fluctuating trend. Currently, the risk coefficient has fallen back to the neutral zone, indicating that the pressure of long liquidation has eased.

（The option intention transaction ratio in the figure below）

During the price fluctuation period, the overall trading volume of options decreased, and the proportion of put options also decreased accordingly. This to some extent reflects that some option traders have closed their bearish protection positions.  

(Derivative trading volume as shown in the figure below)

From the trading volume of derivatives, it can be seen that derivatives traders are not very interested, and the trading volume is still low.

(The implied volatility of options in the figure below)

The implied volatility of short-term options has slightly increased, but the activity and willingness of option traders to pay attention are relatively low.

Emotional state rating: overall neutral

(Profit and loss transfer volume in the figure below)

While the price is fluctuating, the transfer amount of losses is showing a downward trend, reflecting a weaker panic sentiment at the current price level. On the other hand, the transfer amount of profits is also at a low level.

At the same time, combined with the chip chart, the market's ability to bear near the current price is relatively strong. As mentioned in last week's report, the transfer volume of profits and losses has dropped to a low level, which is a relatively optimistic signal.

(新增地址和活跃地址)

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Newly added and active addresses are still at a low level, indicating that the current market's activity and investor participation are not high.

Spot and selling pressure structure rating: showing a small outflow state, overall selling pressure is small.

(Net Position of Bingtang Orange Exchange as shown in the following figure)

The net position of the Bingtang Orange Exchange has shown a slight outflow accumulation, reflecting a relatively light selling pressure in the spot market.

(Net position of E-Tower Exchange shown in the following figure)

Ethereum Exchange's net position has also shown a small outflow accumulation.

(High Weight Pressure in the figure below)

No high-weight selling pressure at the moment.

Purchasing Power Rating: Global purchasing power has slightly rebounded, while stablecoin purchasing power has declined.

（Global purchasing power status as shown below）

The purchasing power of Asia and Europe is still negative, while the purchasing power of America has slightly increased.

(Net Position of USDC Exchange as shown in the figure below)

The net position of USDC on the exchange shows an outflow state.

(Net position of USDT exchange shown below)

USDT has seen a small inflow, but overall it is still in an outflow state.

Off-chain transaction data rating: Willing to buy at 25500; willing to sell at 30000.

(Coinbase off-chain data as shown below)

There is a willingness to buy at the price range of 25000-25500.

There is a willingness to sell at the price of 30000.

(下图 Binance 链下数据)

Translation:

(Binance off-chain data in the following figure)

There is a willingness to buy at the price range of 25000-25500.

There is a willingness to sell at the price levels of 27500, 28000, and 30000.

(下图 Bitfinex 链下数据)

Translation:

(The following is Bitfinex off-chain data)

There is a willingness to purchase at the 25000 price point.

There is a willingness to sell at the price range of 27500, 28000, and 30000.

This Week's Summary:

Summary of News:

1. This week's negotiations on the US debt ceiling have failed. If an agreement to raise the debt ceiling cannot be reached before June 1st, there is a risk of default in the United States.

Dalio believes that the continuously increasing size of US debt will put the Federal Reserve in a dilemma and lead to a run on the central bank.

2. According to a survey conducted by economists, the annualized growth rate of the US economy in the last quarter was 1.1%, and it is expected to contract by 0.2% and 0.3% respectively in the last two quarters of this year. The unemployment rate is expected to rise from the current 3.4% to 4.2% by the end of the year.

Morgan Stanley believes that as the US economy slows down, the market's bet on interest rates potentially dropping starting in the third quarter is correct.

3. There is a divergence in the market regarding the next move of the Federal Reserve. Investors are betting that there is a 35% chance of another 25 basis point rate hike in June, which is higher than the near-zero probability after the May meeting.

On-chain Long-term Insights:

1. Currently, the global wallet status is weak with low purchasing power.

2. It seems that the US wallet has stronger support for prices, but currently it is relatively weaker than two months ago;

3. In the medium to long term, the market has slowly returned to stability from the risk-averse sentiment. The market's preferences are undergoing a certain transformation, and prices may tend to stabilize in the future.

4. In the long term, the macro spot selling pressure has reached a relatively low historical level.

Market positioning:

Perhaps in the medium to long term future, there may be a period of sluggishness, but with reduced selling pressure, the pressure has decreased significantly compared to six months ago.

On-chain Mid-term Exploration:

1. Short-term participants' supply has decreased, without touching the liquidity support zone.

2. Short-term participants still have a small amount of deposits, while long-term participants' deposit situation has slowed down;

3. Addresses with a balance greater than 10,000 are slowly accumulating and may be one of the current key groups.

4. The mild contraction of selling pressure from high-weighted groups may provide some assistance to the market's recovery.

Market Orientation:

Wandering, watching.

When the market enters a period of low liquidity, the withdrawal of funds by short-term participants may cause a slump in the market.

However, the key group may slow down the selling sentiment here.

On-chain short-term observation:

1. The risk coefficient of derivatives has returned to the neutral zone, and the risk has decreased.

2. The newly added active addresses are relatively low, indicating a lower market activity level.

3, the overall market sentiment is neutral;

4. Exchange data shows that chips are flowing out in small amounts, and overall selling pressure is relatively low.

5. Global purchasing power has slightly rebounded, while stablecoin purchasing power has declined.

6. Off-chain transaction data shows a willingness to buy at the price of 25500 and a willingness to sell at the price of 30000.

7. The probability of not falling below 20,000 to 24,000 in the short term is 59%.

Market Orientation:

The overall sentiment of the market is neutral, without any obvious radicalism or panic. Although the current activity is low and there is no clear direction expectation, there are also some positive signals present.

Strategy Recommendation:

Neutral strategies are better or narrow space trading.

Risk Warning:

The above are all market discussions and explorations, and do not constitute directional opinions on investment; please be cautious and prevent market black swan risks.

This report is provided by the "WTR" Research Institute.

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