Independent world, breeze and snow｜WTR 4.08

"Looking ahead to the endless frontier technology; seeing into the future, leading the new era of investment research.

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

Members’ Twitter IDs: Golden Egg Diary @jindanriji; Elk Will Not Get Lost @crypto_elk_; Forex Brother; Xibei @Asterismone;

Weekly Review

This week, from April 1 to April 8, the highest price of Sugar Orange was around $71,288 and the lowest was close to $64,493, with a fluctuation range of about 9.45%.

Observing the chip distribution chart, there are a large number of chip transactions around 66,000, which will have certain support or pressure.

• analyze:

1. 59000-63000: about 600,000 pieces;

2. 64000-68000: about 990,000 pieces;

• The probability of not falling below 57,000-61,000 in the short term is 82%;

• The probability that it will not rise below 71,000-74,000 in the short term is 53%.

Important news

Economic News

1. The U.S. 10-year Treasury bond yield and BTC price showed a significant negative correlation, reaching -90.84%. The 10-year Treasury bond yield rose sharply by 1% to 4.4%;

2. The U.S. dollar index broke through 105 for the first time since November 2023, and BTC fell 5%.

3. Bank of America said it would maintain its forecast for gold prices at $2,400 an ounce even if the Federal Reserve cuts interest rates after the first quarter of 2024.

Encrypted ecological news

1. Stefan von Haenisch, director of agency OSL SG Pte, said the prospect of fewer rate cuts from the Federal Reserve is having an impact on cryptocurrencies, and as this week has arrived, cryptocurrencies have seen a sell-off, and no industry has been unaffected, especially those tokens whose prices have exceeded BTC in the past six months.

2. The U.S. Securities and Exchange Commission (SEC) submitted an amendment notice for the Grayscale Spot ETH ETF (Convertible), submitting Amendment No. 1 regarding proposed changes to the listing and trading rules for Grayscale ETH Trust Fund shares.

3. The U.S. Securities and Exchange Commission (SEC) is seeking public comments on Grayscale, Bitwise, and Fidelity’s spot ETH ETFs.

4. The SEC said in a filing about Bitwise: The Commission is issuing this notice to solicit comments from interested persons on the proposed rule change (as modified by Amendment No. 1), which must be submitted within 21 days.

5. The Coinbase research report stated that the cryptocurrency market has developed well in the second quarter, most of the unfavorable factors are now a thing of the past, and the positive factors may "only become more evident from the second half of April."

6. Last week, spot BTC ETFs purchased $1.6 billion of BTC, with an average daily purchase of more than $406 million. After deducting the outflow of Grayscale GBTC, the net inflow last week was $510 million. In March, the trading volume of BTC spot ETFs reached $111 billion, three times that of $42.2 billion in February.

Long-term insights: 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; the possibility of certain directions and certain events occurring under certain conditions

Long-term insights

• Net position relative to whale exchanges

• Net exchange position

Is the current phase of the market approaching a top?

This is the theme explored in the current week;

In view of this topic, we should look for it from the rigidity of the use of funds itself, which is the most core direction of funds flow.

(The following figure shows the net position relative to the whale exchange)

The data from whales shows that they are still accumulating more funds and crypto assets.

The overall selling pressure has also begun to slowly decrease, and the market has returned to equilibrium. The expectations for the halving in April have been adjusted, and the sell-off has been understood in advance. This month may be an important stage in reaching equilibrium.

(Figure below: Exchange net position)

Every time there is a big sell-off, or when the market is about to peak, there will be a large amount of net position selling.

Fortunately, there is not much inflow into the exchanges at this stage.

On the contrary, more investors or institutions are moving their chips from exchanges to their wallets. This is a huge accumulation, and the market is still in the buying and accumulation stage.

The chips in the exchange are decreasing, which is good news. If this purchasing power can be sustained, the halving may continue to have a driving effect on prices.

Mid-term exploration

• Total impact

• Exchange Trend Net Position

• Positive sentiment on the Internet

• Accumulation trend points

(Total impact amount in the figure below)

After a period of adjustment and repair, the market has now reached a lower point of temporary selling pressure.

As the total impact continues to converge, the pressure on the market is also easing.

The near term may be a time of lower risk.

Of course, dynamic observation is needed.

(Figure below shows the trend of net positions on exchanges)

The overall net position of the exchange presents a trend structure of outflow accumulation.

At the same time, combined with the total impact volume, if there is no further selling pressure, the market may gradually enter a stage with less pressure.

By then, a better trend may be brewing.

(Figure below: Network sentiment positivity)

Although the overall selling pressure has eased, trading sentiment is still in a state of adjustment and repair, and has not shown any right-side signals or tendencies.

Perhaps the overall network sentiment still needs to be adjusted and repaired, and the market needs to be sorted out for a period of time.

(The following figure shows the accumulation trend)

The accumulation situation at the current stage is relatively weak, and the enthusiasm for participating in the current market may still be relatively cautious.

From the status of each address, it can be seen that currently only addresses 10k are slowly accumulating chips, but the pace is relatively cautious.

At the same time, this model also reflects that the enthusiasm for participation in the past month has been relatively cautious.

Short-term observation

• Derivatives Risk Factor

• Option intention transaction ratio

• Derivatives Trading Volume

• Option Implied Volatility

• Profit and loss transfer

• New addresses and active addresses

• Net Position of Bingtang Orange Exchange

• Net position of the Auntie Exchange

• High-weight selling pressure

• Global purchasing power status

• Stablecoin exchange net positions

• Off-chain exchange data

Derivatives rating: The risk factor is in the danger zone and the derivatives risk is relatively high.

(The figure below shows the risk factor of derivatives)

The market performance was basically in line with last week's expectations, with long and short liquidations due to shocks. The current risk factor is in a dangerous area, but the liquidation volume of derivatives is not large. It is expected that the market may still see two-way liquidation of derivatives this week.

(The figure below shows the option intention transaction ratio)

Both the put ratio and option trading volume have dropped significantly.

(Figure below shows derivatives trading volume)

Last week, we mentioned that trading volume was already at a low level, indicating that it was close to another change in the market. Currently, after a brief rise in the market, it has fallen back to a low level.

(The figure below shows the implied volatility of options)

There has been a small increase in implied volatility in the short term.

Emotional state rating: Neutral

(The following figure shows the amount of profit and loss transfer)

The cost of short-term holders has reached around 59k. This week, the cost of short-term holders has only increased slightly, while the positive and panic sentiments have continued to decrease, which leaves enough room for a change in the market.

(Figure below shows newly added addresses and active addresses)

New and active addresses are at a median level.

Spot and selling pressure structure rating: Overall, it is in a state of large-scale accumulation of outflows, and the selling pressure is relatively low.

(Figure below: Net position of Bingtang Orange Exchange)

Bitcoin is currently in a state of large-scale accumulation of outflows, and the net position in the exchange continues to decline.

(The following figure shows the net position of E-Tai Exchange)

The second cake is also currently in an outflow accumulation state.

(Figure below shows high-weight selling pressure)

There is no high-weight selling pressure at the moment.

Purchasing power rating: Compared with last week, global purchasing power and stablecoin purchasing power have rebounded moderately.

(Figure below shows the global purchasing power status)

Currently, except for the purchasing power of the Americas, the purchasing power of Asia and Europe is in a state of continuous decline.

(The following figure shows the net position of USDT exchanges)

Compared with last week, USDT's overall net position increased.

Off-chain transaction data rating: There is a willingness to buy at 63,000; there is a willingness to sell at 72,000.

(The following figure shows Coinbase off-chain data)

There is willingness to buy at prices around 60000 and 62000;

There is a willingness to sell at prices around 72000, 73000, 74000 and 75000.

(Binance off-chain data in the figure below)

There is willingness to buy at prices around 60000 and 62000;

There is a willingness to sell at prices around 72000 and 73000.

(Bitfinex off-chain data in the figure below)

There is willingness to buy at prices around 60000 and 63000;

There is a willingness to sell at prices around 72000 and 74000.

This week’s summary:

WTR public real trading section:

Starting from February, the actual status of funds will be disclosed on a regular basis every month.

Strategy: prudent strategy.

Initial capital amount: US$240,000.

Current funding: US$318,700.

Yield: 32.7%.

Summary of news:

From a macro perspective, BTC is negatively correlated with U.S. Treasuries, BTC is negatively correlated with the U.S. dollar, BTC is a risky asset, and the latter two are "safe-haven assets". During the interest rate hike period, the latter two soared, and BTC plummeted.

The yield on the 10-year U.S. Treasury bond rose from 2% in 2022 to 5% in October 2023 (BTC fell), fell to 3.8% in December (BTC rose), and recently rebounded to 4.4% (BTC fell).

By grasping the turning point of the 10-year U.S. Treasury yield, we can grasp the direction of the entire crypto trend.

The market currently generally believes that as interest rates fall this year, U.S. Treasury yields will continue to fall.

Logically speaking, the funds that can be allocated to cryptocurrencies will not decrease, and may even increase. The overall downside risk of cryptocurrencies will be reduced accordingly, and may even resume its upward momentum.

Of course on the other hand:

The current situation is very similar to when Satoshi Nakamoto created crypto and he wrote that “the Chancellor is on the brink of a second round of bank aid”.

If Bitcoin loses its function during the liquidity injection cycle this time because it does not match its own positioning, then the significance of Bitcoin's existence and the overall details of the adjustments made by major mainstream participants in the world to the overall encryption will also undergo greater changes, or it can be said that this is a major test.

On-chain long-term insights:

1. The selling pressure from whales is still decreasing, and April may be the month when the market enters a balanced stage;

2. Judging from the overall long-term net position, participants are still accumulating. If the buying trend continues, the chips after halving will be reduced, which will still have a role in promoting the market's rise.

• Market setting:

Slowly move from selling pressure to equilibrium and accumulation stage.

On-chain mid-term exploration:

1. The recent pressure is relatively light;

2. The trending net positions on exchanges show that there is still outflow accumulation;

3. The overall trading sentiment is still recovering;

4. Participants have been more cautious in the past month.

• Market setting:

cautious

The current pressure is relatively light, and the enthusiasm for participation in the past month has been relatively cautious. It may be necessary to gradually adjust to enter the next stage of the market.

On-chain short-term observations:

1. The risk factor is in the danger zone and the risk is high.

2. The number of newly added active addresses is at a median level.

3. Market sentiment status rating: Neutral.

4. The overall net position of the exchange showed a large amount of accumulated outflows, and the selling pressure was relatively low.

5. Compared with last week, global purchasing power and stablecoin purchasing power have rebounded moderately.

6. Off-chain transaction data shows that there is a willingness to buy at the 63,000 price level, and a willingness to sell at the 72,000 price level.

7. The probability that it will not fall below 57,000-61,000 in the short term is 82%; the probability that it will not rise below 71,000-74,000 in the short term is 53%.

• Market setting:

The overall market sentiment is neutral, and the growth rate of short-term holders' cost is declining, currently around 59K. Derivatives liquidation is expected to occur this week, and the probability of extreme downward market is still low.

risk warning:

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

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

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