Source: WTR Research Institute

This week review

This week, from October 9th to October 16th, the highest price of Bingtang Orange was near $27987, and the lowest was close to $26538, with a fluctuation range of about 5.18%. Observing the distribution of chips, there is a large amount of chip transactions around 26770, which will provide certain support or pressure.

• Analysis:

1. 26000-31000, approximately 4.38 million pieces.

2. 20000~25000 is approximately 1.7 million coins.

• The probability of not breaking below 24000~26000 in the short term is 79%.

• The probability of not breaking through 32000-34000 in the short term is 70%.

Important News

Economic news:

1. In September, the US PP1 annual rate was 2.2%, higher than the expected value of 1.6% and higher than the previous value of 1.6%.

2. US September PPI rate was 0.5%, higher than the expected value of 0.3%, but lower than the previous value of 0.7%.

3. Kashkari of the Federal Reserve: The potential rise in bond yields may mean that the Fed has to reduce its actions, and quantitative easing is declining.

4. Federal Reserve's Bostic: I don't think we need to raise interest rates anymore, as the overall economic situation has significantly improved.

5. Morgan Asset Management International's Chief Investment Officer, Lain Stealey, stated that the central bank has implemented a large amount of tightening policies, and the Federal Reserve and other central banks are more likely to pause interest rate hikes in the fourth quarter to monitor these effects.

6. Deutsche Bank: It is expected that both the Federal Reserve and the European Central Bank will begin to cut interest rates in 2024. The current expectations of investors seem overly pessimistic due to the risk of economic recession. The Federal Reserve is expected to cut interest rates by 175 basis points starting from the second quarter of next year.

7. The United States announced a CPI of 3.7%, unchanged from the previous value; the core CPI was 4.1%, lower than the previous value, in line with expectations.

8. Morgan Asset Management stated that the inflation rate is expected to reach the Federal Reserve's target of 2% next year. By the fourth quarter of next year, the overall CPI will reach 2% or lower. The energy situation is gradually improving, and the decline in gasoline prices is expected to lead to a fall in CPI in October.

9. The minutes of the Federal Reserve meeting predict that by the end of this year, overall PCE (Producer Price Index) and core PCE inflation will be around 3.5%, while CPI (Consumer Price Index) remains high but continues to show signs of slowing down.

Encryption ecosystem news

1. Last week, the total trading volume of the top exchanges exceeded 400 billion US dollars, an increase of 15.8%.

2. Vitalik Buterin proposed a new dual-layer staking mechanism for Ethereum, reducing the threshold for participating staking nodes.

3. The Bitcoin community has released a white paper titled "BitVM: Performing Any Calculation on Bitcoin".

In October, multiple well-known projects including Aptos, ApeCoin, Axie Infinity, and Optimism will undergo a new round of token unlocking.

5. On-chain data display, payment giant PayPal launched the US dollar stablecoin PYUSD with a total issuance of over 100 million coins.

6. Hedge fund giant Paul Tudor Jones said that the combination of widespread geopolitical risks and the continuously rising level of US government debt makes holding stocks difficult, but BTC and gold are attractive options.

7. The Deputy Chief Executive of the Hong Kong Monetary Authority, Eddie Yue, stated that the relevant design work for stablecoin regulatory system is still ongoing. After completion, market opinions will be sought before formal legislation is enacted.

8. Payment giant Mastercard announced that it has launched a new solution that supports the tokenization of CBDC (Australia) on different blockchains, providing consumers with more payment options.

9. The discount rate of the grayscale BTC trust fund GBTC has significantly narrowed from 43% in June to 16.5%. The fluctuation of this indicator is seen as a change in the market's confidence in the approval of BTC spot ETFs. The US Securities and Exchange Commission (SEC) may gradually approve all spot BTC ETFs.

10. Former Clyde & Co executive Martin Bednall said "The SEC may approve all spot ETFs at the same time. If potential spot ETFs are approved, it will have a huge positive impact on the cryptocurrency market."

From the accumulated ratio of realized profit and loss sales, it can be seen that in a stock environment, the market's acceptable ratio of profit and loss sales is usually limited to a certain range.

The situation since 2023 shows that the market's accumulative limit value that can be accepted is 76628. This may be helpful for observing the stock market.

At the same time, it can be observed from this year's situation that the market is facing more upward resistance. When the market volume is weak, there are not many loss chips to be thrown out, which may be more reflected in the stage resistance.

Short-term Observation

• Derivative risk coefficient

• Option intention transaction ratio

• Net Head of Bingtang Orange Exchange

• Auntie Exchange Net Head• Global purchasing power status

• Stablecoin exchange net head

Derivative Rating: The risk factor is in the neutral zone, with moderate risk.

(Derivative Risk Factor)

(See Figure: Option Intention Transaction Ratio)

(See Figure: Implied Volatility of Options)

The implied volatility of options has not changed much compared to last week, and the activity of option traders is generally moderate.

(Profit and Loss Transfer Amount)

The current price has fallen below the short-term holder's cost line of 27.5K. We continue to pay attention to the market panic sentiment represented by the transfer of losses.

Spot and selling pressure structure rating: Overall, it presents an accumulated outflow state with relatively low selling pressure.

(Net Head of Bingtang Orange Exchange)

There was a significant inflow of funds into Da Bing last week, and most of the net inflow has now turned into outflow.

(Net Head of E-Tower Exchange)

E is currently in an outflow and accumulation state.

(High weight suppression in the figure below)

There is a small amount of high-weight selling pressure on BTC, which has now eased.

(Global purchasing power status)

The purchasing power in the Americas has turned from negative to a slight rebound last week, while a large amount of purchasing power has been lost in Asia and the purchasing power in Europe has currently fallen to negative values.

(Net Head of USDT Exchange as shown below)

6. The probability of not breaking below 24000~26000 in the short term is 79%; the probability of not breaking above 32000~34000 in the short term is 70%.

• Market tone: The market sentiment is neutral and somewhat subdued.

The current price has fallen below the short-term holder's cost line. Under no external special stimulus, the market is unlikely to experience a relatively smooth trend. Continue to pay attention to unrealized losses.

Strategy Recommendation: Spot Dynamic Hedging

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