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Week 52 on-chain data: Whales’ willingness to buy has declined, and it is necessary to defend against fluctuations caused by ETFs

WatchToweR Crypto

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The market has entered a relatively unstable stage, and there is less room for rapid increases in the future.

Original Title: "Yunhua Changzai, Next Year Still | WTR 1.01"

Original Source: WTR Research Institute

This Week Review

This week, from December 25th to January 1st, the highest price of Bingtang Orange was around $43,802, and the lowest was close to $41,300, with a fluctuation range of about 5.71%. Observing the chip distribution chart, there is a large amount of chip transactions around 41,871, which will provide certain support or pressure.

• Analysis:

1. 39000-43000, approximately 1.97 million pieces.

2. 34000~38000, approximately 1.33 million pieces;

• The probability of not breaking below 36,000-38,000 in the short term is 92%.

• The probability of not breaking through 45000-47000 in the short term is 50%.

Important News

Economic News

1. According to data released by the US, the initial jobless claims for the week ending December 23rd were 218,000, which exceeded the expected 210,000 and the previous value of 205,000.

2. The initial application numbers have slightly increased, but are still close to historical lows. Employment growth has strengthened some predictions that the Federal Reserve will successfully achieve an economic soft landing after two years of aggressive interest rate hikes.

3. Strategist Amanda Sunstrom said that the market is ready to welcome the "golden girl" scenario by 2024, in which the Federal Reserve will lower interest rates to a level that stimulates the economy without reigniting inflationary pressures.

4. Wall Street is heavily betting that the Federal Reserve will cut interest rates next year. Campbell Harvey, the father of the yield curve prediction for the 3-month and 10-year Treasury yield spread, said that the curve has been inverted for the past 13 months, which is the average time before an economic recession. The Federal Reserve should cut interest rates as soon as possible to help solve the problem.

Encryption Ecology News

1. DogeDesigner asked on X: Does anyone still remember NFTs? Musk replied: It turns out they are somewhat replaceable, at least JPEGs should be encoded on the blockchain.

2. Tether advisor Gabor Gurbacs said: Investment products have developed from stocks to hedge funds, then to mutual funds, and then to ETFs, each creating a market worth trillions of dollars. Stablecoins have the potential to create the next trillion-dollar market.

3. According to official registration statistics from the European Union member states, by the end of 2023, at least 11,597 cryptographic entities will have been registered among the 27 member states of the European Union. Nearly 1,000 new cryptographic entities will be registered in the European Union in 2023.

4. On January 17th, the "Dencun" upgrade of the Ethereum test network improved data storage capabilities while reducing costs associated with Ethereum's second-layer solutions. If the BTC ETF is approved, it would be a good sign for the potential of ETH spot ETFs.

5. As of December 20th, the average return rate of cryptocurrency hedge funds this year is 44%, rebounding from a loss of 52% in 2022, and is the best performing among the 29 fund strategies tracked by foreign media.

6. VisionTrack executive Bailey York said that the fundraising of active funds has begun to rebound, and new fund management companies have entered the market, especially in Singapore, Hong Kong, Dubai, London, and Switzerland.

7. Coinbase's BTC balance has dropped significantly to about 411,000 coins, the lowest level since 2015, with about 30,000 BTC leaving the platform recently.

8. BTC spot ETF applicant Hashdex has released the second commercial advertisement for its spot BTC ETF.

Long-term Insight: Used to observe our long-term situation; Bull market/Bear market/Structural changes/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 the short-term market conditions; as well as the possibility of certain directions and events occurring under certain circumstances.

Long-term Insight

• Long-term investor net position

• Net position of Auntie Exchange

• Global purchasing power status

• Net position of stablecoin exchange

• Off-chain exchange data

Derivative Rating: Risk factor is in the neutral zone, derivative risk is moderate.

(Derivative Risk Coefficient in the following figure)

Consistent with expectations, the risk coefficient is slowly increasing, and there is a slight clearing of derivatives in the market. This week, as the ETF news approaches, there is no special expectation from the perspective of derivative risk coefficient.

(The following chart shows the ratio of option intention to transaction)

The trading volume of options and the ratio of put protection have both significantly decreased.

(Derivative trading volume in the figure below)

Derivatives trading volume has been at a relatively low level for the past three weeks, waiting for a turning point.

(The implied volatility of options in the following figure)

Implied volatility has risen sharply in the short term, and option traders are more active.

Emotional State Rating: Slightly FOMO

(Profit and loss transfer amount in the following figure)

The current short-term holder cost has reached 36K. Combining the short-term holder cost with the chip chart, it can be seen that current market participants are still continuing to build short-term positions. Excluding exchanges, approximately 340,000 chips were added this week near the relatively high price range of 39,000-43,000, an increase from last week.

(The following image shows "New Addresses" and "Active Addresses")

The number of new and active addresses has both fallen to a low level.

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

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

The overall situation of Dabing shows a large amount of outflow accumulation, and all the previously inflowed amount has been digested.

(Net Position of E-Tower Exchange)

Erbing is in a state of large-scale outflow and accumulation.

(High Weight Throw Pressure in the following figure)

BTC has seen high selling pressure, but it doesn't seem to have a significant impact on the market at the moment.

Purchasing Power Rating: Global purchasing power has slightly decreased compared to last week, and stablecoin purchasing power has also decreased slightly.

(Global purchasing power status in the following figure)

This week, the purchasing power in Asia has slightly decreased, while the purchasing power in Europe and America remains relatively stable compared to last week.

(Net position of USDT exchange shown below)

USDT exchange net position is in a state of moderate inflow.

The new buyer is still entering the market with some differences, which may cause market fluctuations.

8. Market sentiment rating: leaning towards FOMO.

9. The overall net position of the exchange shows a large outflow accumulation state, with relatively low selling pressure.

10. Global purchasing power has slightly decreased compared to last week, and stablecoin purchasing power has also slightly decreased.

11. Sub-chain transaction data shows that there is a willingness to buy at the price of 42000, and a willingness to sell at the price of 45000.

12. The probability of not breaking below 36000~38000 in the short term is 92%; the probability of not rising above 45000~47000 in the short term is 50%.

• Market tone:

ETF related expectations may see results as early as this week. Short-term chips continue to accumulate, and purchasing power remains positive.

However, defensive measures must also be taken, as the accumulation of short-term chips can easily cause significant fluctuations, whether in the face of "black swan" events or "selling news".

WTR wishes everyone a happy new year in 2024!

Risk Warning: The above is all market discussion and exploration, and does not constitute directional investment advice. Please exercise caution and guard against market black swan risks.