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Week 27 on-chain data: market trading activity is low, short-term downward fluctuations are limited

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Global purchasing power is at a mid-range level, and stablecoin purchasing power has recovered slightly.

Original Title: "Moss Under the Stairs, Lonely in the Rain | WTR 7.10"

Original Source: WTR Research Institute

This Week Review

Analysis:

26000-31000 approximately 3.58 million pieces;

20000~25000 is approximately 1.57 million coins.

The probability of not breaking through 32000-34000 in the short term is 60%.

Important News

Economic News

The Bank of Japan keeps its policy unchanged but warns of increasing inflationary pressure.

The US non-farm employment increased by 209,000, which is lower than the expected value of 225,000. In June, ...

The average hourly wage annual growth rate increased by 4.4%, exceeding expectations.

4.20%; the average weekly working hours have slightly increased to 34.4 hours.

The European Central Bank announced that it will end its stimulus plan by the end of the year.

The Chairman of the Federal Reserve, Powell, stated that the Federal Reserve will continue to support the economy.

The Bank of England warns that inflation may exceed its target.

The People's Bank of China announced a rate cut to stimulate the economy.

US Treasury Secretary Yellen calls for a global minimum corporate tax.

The Saudi National Bank is attempting to increase its stake in Credit Suisse.

The US Treasury Secretary Yellen said it is "impossible" to separate the economies of China and the United States.

Encryption Ecology News

Polygon zkEVM TVL is approaching $50 million, with a growth of over 20% in the past 7 days.

UniSat Wallet will launch its NFT marketplace this week.

The stablecoin issuers Circle and Tether have frozen over $65 million transferred from Multichain.

Aave will convert 1600 ETH from the DAO treasury into $wstETH and $rETH.

Layer1 blockchain Shardeum raised $5.4 million, with Amber Group and others participating in the investment.

Gemini sues DCG and its founder Barry Silbert.

BlackRock has resubmitted its Bitcoin spot ETF application, designating Coinbase as its supervisory partner.

Founder of Sanjian Capital will donate future income to creditors.

The largest bank in Japan is introducing a stablecoin for Japan on Cosmos.

Redacted has released Hidden Hand V2, adding support for Arbitrum and Polygon zkEVM.

BlackRock CEO says that cryptocurrency assets may potentially change the financial system.

Long-term Insight: Used to observe our long-term situation; Bull market / Bear market / Structural change / Neutral state.

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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 events occurring in a certain direction and under certain conditions.

Long-term Insight

The trend of long and short derivative products

(Trend comparison of long and short derivatives as shown in the figure below)

The chart shows the derivative trend ratio:

During this time, long positions are being liquidated in large quantities while short positions are being rapidly squeezed.

According to the data in the chart, it can be concluded that there have been 10 severe bear squeezes since the beginning of this year.

The difficulty for bears in this year's market environment is extremely high, while bulls only experienced severe pressure at the end of February this year.

The market currently does not have too much bullish pressure.

This year's market conditions are not very suitable for bears, while the overall situation for bulls is relatively better.

Similarly, you can pay attention to the long-term market conditions in the future. The market environment has undergone a complete transformation compared to last year.

Mid-term exploration

WTR Derivative Risk Model

The proportion of futures leverage ratio.

The content you provided is:

Purchasing Power Differential

The positivity of online emotions

Accumulation coefficient

(See WTR Derivative Risk Model in the figure below)

WTR derivative risk model can pay attention to the swing state of RPN, which is currently in a reversal state of clearing long leverage.

During the previous high market phase, it may not be appropriate to aggressively deploy long positions after the short liquidation reaches a certain threshold.

Of course, due to the high sensitivity of this model, the current situation may only serve as a reference, and exploration of derivative risks still needs to be carried out in the medium term.

(The leverage ratio of futures as shown in the following figure)

Short-term futures leverage, overall, has not accounted for a high proportion in history, hovering between 0.23-0.25.

Overall, the current leverage situation is at a level of normal market operation. The risks posed by futures contracts have not yet materialized and are still within an acceptable range.

You can refer to the period with high leverage in 2021, which had an accelerating effect on the significant market fluctuations.

The current risks of derivatives may not have formed a key structural change in the market, but in a stock environment, the dynamics of derivatives are still worth paying attention to.

(Difference in purchasing power in the following figure)

The purchasing power is currently in a relatively abundant state within the exchange, with the difference showing as positive, but there is a slight sharp reduction.

This model is only suitable for mid-term status evaluation and may be distorted in terms of sensitivity in the short term.

The current situation may reflect the abundance of stablecoins within the exchange, which is sufficient to support a good purchasing power for a relatively long period of time in the future.

However, the limitation of this model is that it cannot reflect the transaction and coin transfer relationship, and is only limited to observing the difference between stablecoins and BTC within the exchange, which may be better used for state evaluation.

(Positive online sentiment as shown in the following image)

The positivity of online emotions has slightly decreased, and the current tone may still be biased towards adjustment.

Combining with the chip chart, 30000 may be a key price level.

The accumulation-type group in the market is still steadily maintaining a buying tone, and their positions have increased recently. This may be the key to compressing the short-term seller space.

The translation of the given Chinese text is: "Option intention transaction ratio."

(Derivative Risk Factor as shown in the figure below)

Last week, the risk factor was in the danger zone and the price experienced a slight pullback. Currently, the risk factor has returned to the neutral zone, indicating a decrease in risk.

(The option intention transaction ratio in the figure below)

The trading volume of options is still at a low level, and the proportion of put options is at a median level.

(Derivative trading volume in the figure below)

The current trading volume of derivatives is at a low level, indicating that current derivative traders are more inclined to wait and see.

The current implied volatility of options has not shown significant fluctuations, indicating that option traders are more inclined to wait and see.

Emotional State Rating: Neutral

(Profit and Loss Transfer Amount)

The current profit and loss transfer amounts are both at a low level. Combining with the chip chart observation, if the loss transfer amount continues to remain low, a strong support will be formed near 30K.

(新增地址和活跃地址)

Translation:

(New addresses and active addresses)

Newly added and active addresses are at a moderately high level. Overall, the market activity is good.

Spot and selling pressure structure rating: Overall, there is a large outflow state, with relatively low selling pressure.

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

The net position of Da Bing Exchange has shown a significant outflow. This indicates that the selling pressure in the market is not high at present.

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

Ethereum Exchange's net position is showing a cumulative outflow state.

(High Weight Throw Pressure in the figure below)

There is currently no high-weight selling pressure.

Purchasing Power Rating: Global purchasing power is at a median level, with stablecoin purchasing power slightly rebounding.

(Global purchasing power status shown in the following figure)

The purchasing power in the Americas has decreased, while the purchasing power in Asia and Europe has increased. Overall, the purchasing power level remains consistent with last week.

(Net position of USDC exchange shown below)

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

(Net position of USDT exchange shown below)

Net position of USDT exchanges shows a slight inflow.

Off-chain transaction data rating: Willing to buy at 28500; willing to sell at 32000.

(下图 Coinbase 链下数据)

Translation:

(Coinbase off-chain data as shown below)

There is a willingness to purchase at prices around 25000, 28500, and 29000.

There is a willingness to sell at prices around 32000, 33000, and 35000.

(下图 Binance 链下数据)

Translation:

(Binance off-chain data in the following figure)

There is a willingness to purchase at the price range of 24000~29000.

There is a willingness to sell at prices around 31000 and 32000.

（下图 Bitfinex 链下数据）

Translation:

(The following is Bitfinex's off-chain data)

There is a willingness to purchase at the price around 28500.

This Week's Summary:

Summary of News:

The employment market has cooled down slightly, but not by much (more than 200,000 people, all of which are at historically high levels). The non-farm report is not enough to prevent the Federal Reserve from raising interest rates by 25 basis points at this month's meeting.

Next Wednesday's CPI is the focus, and the Federal Reserve is more concerned about core CP. If core CP is lower than expected, it can prevent the Federal Reserve from continuing to raise interest rates after July, or even terminate them.

Analysts believe that the US economy is experiencing a soft landing, and one interest rate hike is acceptable and has been largely absorbed by the market. However, if there are two interest rate hikes, it would be considered beyond expectations.

On-chain Long-term Insights:

The difficulty for bears in this year's market environment is extremely high, while bulls only experienced severe pressure at the end of February this year;

Similarly, you can pay attention to the long-term market conditions in the future. The market environment has undergone a complete transformation compared to last year.

The market sets the tone: it will be difficult to short in this stage this year.

On-chain Mid-term Exploration:

The volatility risk caused by the proportion of derivatives has not reached a high level.

Stablecoins have formed a relatively abundant purchasing power within exchanges, and may perform well in the medium term if the trend remains unchanged.

The positivity of online emotions is relatively weak, and it may currently be leaning towards an adjustment state.

The market is currently in an accumulation state, with a slight increase in short-term supply.

Market tone: adjustment.

The current market sentiment is slightly weak, but there are signs of slight increase in liquidity repair. It may still be in an adjustment phase at present, but there is relatively abundant purchasing power differential in the medium term.