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28th week on-chain data: Market tightening concerns eased, creating upward potential for crypto assets.

WatchToweR Crypto

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Overall, the net position of the exchange shows a significant outflow, with relatively low selling pressure.

Source: WTR Research Institute

This Week Review

This week from July 10th to July 17th, the highest price of Bingtang Orange was around $31,804 and the lowest was close to $29,965, with a fluctuation range of about 5.78%.

Observing the chip distribution chart, there is a large volume of chips traded around 30,000, which will provide certain support or pressure.

• Analysis:

1. 26000-31000, approximately 3.75 million pieces;

2. 20000~25000 approximately 1.59 million coins;

• The probability of not breaking below 24000~26000 in the short term is 85%.

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

Important News

Economic News

1. The yield on 10-year US Treasury bonds fell from 4.05% to 3.82%, while the yield on 2-year Treasury bonds dropped from 4.94% to 4.73%.

2. The probability of a 25 basis point interest rate hike in July is 93.0%, while the probability of two consecutive cumulative interest rate hikes of 50 basis points is only 11.2%.

3. The US dollar index fell below the 100 integer mark, hitting a 14-month low.

4. From June to July, the CPI annual rate was 3%, lower than the expected value of 3.10% and lower than the previous value of 4.00%.

Encryption Ecology News

1. The U.S. Securities and Exchange Commission (SEC) has officially confirmed receipt of the BTC spot ETF application from "Bitwise, VanEck, CSOP, Galaxy Digital, Fidelity, WisdomTree", initiating the SEC's review process.

2. The financing amount of the cryptocurrency and blockchain industry in the second quarter of 2023 was 2.32 billion US dollars, the lowest level since the fourth quarter of 2020.

3. Ripple wins non-security lawsuit.

4. 21 US regulatory agencies oppose the draft bill proposed by the US House Financial Services Committee regarding the structure of the cryptocurrency market.

5. The first Bitcoin ETF in Europe is expected to be publicly listed this month. The fund is issued by Jacobi Asset Management Company.

6. The US Securities and Exchange Commission (SEC) has officially recognized Bitwise's Bitcoin ETF application, officially opening the review process of the US SEC.

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

• Withdrawal purchasing power status

This week, a new type of feature engineering was done based on the purchasing power and withdrawal amount of the exchange.

This data represents more whether the market has sufficient purchasing power or potential buying status.

(Withdrawal purchasing power status)

Blue line: Short-term supply volume.

Usually, the dynamic evaluation of the market cannot be purely based on the specific market price. It can be observed by adding short-term cost lines, and it can also further reveal the difficulty of shorting/going long in a certain period of time in the future.

At levels above the liquidity support zone, shorting may be slightly more difficult.

If you are in a lower position, the difficulty of doing more may increase.

(Accumulation Trend)

Trend analysis of accumulation shows that there are signs of relatively reduced buying activity for addresses with 1k-10k and 10-100 recently. However, this may be combined with the circulation status to determine the overall trend.

Currently, a cautious attitude is preferred.

Short-term observation

• Derivative risk coefficient• Derivative trading volume• Option Implied Volatility• Profit and loss transfer amount• High weight dumping• Underlying exchange data

(Derivative Risk Coefficient)

(See Figure: Option Intention Transaction Ratio)

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

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 profit transfer amount has fallen back to a low level after a brief price increase.

(New Address and Active Address)

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

(Net Position of Bingtangcheng Exchange)

(Net Position of E-Tong Exchange)

Similar to the situation with Bitcoin, the net position of E-Tai Exchange has shown a significant outflow.

(High Weight Throw Pressure)

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.

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

This Week's Summary:

1. The market further bets on July being the last rate hike after the US inflation expectations slow down and CPI cools down beyond expectations. The US dollar index has correspondingly reflected this.

2. Market tightening concerns have eased, and there is more confidence in the recovery and expectations for the coming year. Cryptocurrencies may see better performance starting this year.

On-chain Long-term Insights:

1. Starting from January 2023, there have been many instances of increased prices leading to a rise in withdrawals and purchasing power.

2. This state may indicate that there is still more bullish buying interest in the market in the long term, despite the current nearby price.

• Market positioning:

Most people's superficial observation increases the current price instability or decreases liquidity.

But there are still positive factors overall.

On-chain Mid-term Exploration:

1. There is little change in the circulation situation, and the overall trend is cautious.

2. Currently, it is above the liquidity support zone, and the short-term cost is around 27300.

3. Accumulation trend reflects a slight decrease in the accumulation of addresses with 1k-10k and 10-100 BTC.

• Market tone: cautious

On-chain short-term observation:

1. The risk factor is in the neutral zone, with moderate risk.

3. Market sentiment rating: Neutral.

5. The global purchasing power is at a median level, and the purchasing power of stablecoins has slightly rebounded.

7. The probability of not breaking below 24000~26000 in the short term is 85%; the probability of not breaking above 32000~34000 in the short term is 60%.

• Market positioning:

The overall short-term market sentiment is neutral, with little change compared to last week. The short-term downward volatility is limited.

Strategy Recommendation:

Hold positions and hedge opportunistically.