On-chain data for the 22nd week: The second quarter is the turning point for inflation, and interest rate cuts may come in September or November

Original title: "The largest single purchase order of over 10 million US dollars in the past year has appeared. Is it brewing a market? | WTR 6.03"

Original source: WTR Research Institute

 

Review of this week

 

From May 27 to June 3 this week, the highest price of Bingtang Orange was around $70687 and the lowest price was close to $66670, with a fluctuation range of about 5%.
Observing the chip distribution map, there are a large number of chips traded around 67000, which will have certain support or pressure.

 

• Analysis:
1. 59000-63000 is about 880,000 pieces;
2. 64000-68000 is about 1.16 million pieces;
• The probability of not falling below 57000~61000 in the short term is 90%;
• The probability of not breaking 71000～74000 in the short term is 67%.

 

Important news

Economic news

1. US data shows that the revised annualized quarterly rate of real GDP in the first quarter was 1.3%, lower than the initial value of 1.6%, and significantly lower than the growth rate of 3.4% in the fourth quarter of 2023.

2. The revised annualized quarterly rate of the core PCE price index preferred by the Federal Reserve in the first quarter was recorded at 3.6%, lower than the previous expectation of 3.7%.

3. Analyst Bespoke Investment Group said that overall, there were no major surprises, and on the positive side, the inflation data was generally lower than expected.

4. The Chicago Manufacturing PMI in May was 35.4, lower than the expected value of 41 and lower than the previous value of 37.9.

5. The monthly rate of the core PCE price index in April was 0.2%, lower than the expected value of 0.30% and lower than the previous value of 0.30%.

6. Nick Timiraos, the "Federal Reserve mouthpiece", said that today's PCE results were widely expected two weeks ago and are not expected to change the Fed's recent "wait-and-see" attitude.

7. Before the Fed’s new interest rate meeting on June 12, Fed members spoke out. Bostic: I don’t think there will be a rate cut in July. If September is suitable for a rate cut, then cut it. If November is suitable for a rate cut, then cut it. Williams: It is not necessary for inflation to reach 2% to cut interest rates. It is expected that inflation will resume slowing down in the second half of 2024, and interest rates will need to fall at some point.

8. Bank of America data shows that as of Wednesday week, U.S. investors withdrew $6.7 billion from cash, put $1.8 billion into stocks, and $600 million into cryptocurrencies.

Crypto Ecological News

1. Tom Emmer, the majority whip of the U.S. House of Representatives, said that the "lame duck session" at the end of the year is the best time to pass major cryptocurrency legislation.

2. Analysis platform Nansen said that DBS Bank holds 173,000 ETH (about $650 million). DBS Bank is the largest bank in Singapore with $491.9 billion in assets.

3. Gemini, which was affected by the Genesis bankruptcy case, said that more than a year after the end of Gemini Earn, Earn customers have received $2.18 billion worth of physical digital assets, a 232% increase in value from when withdrawals were stopped in November 2022.

4. BlackRock submitted a revised S-1 document for the spot ETH ETF, with the stock code ETHA, which will be listed on the Nasdaq. The media said: BlackRock may purchase $10 million of ETH to provide seed funds for its ETH ETF.

5. Analyst Balchunas believes that the chance of approval will be around July 4, and early approval is unlikely.

6. The U.S. Securities and Exchange Commission (SEC) requires spot ETH ETF issuers to submit the first round of S-1 draft forms by Friday. After that, the SEC will provide the first round of comments and eventually make further changes. It is expected that the S-1 form will be ready after at least two rounds of draft submissions.

7. According to the documents submitted to the U.S. Securities and Exchange Commission, BlackRock plans to purchase $10 million of ETH as seed funds for the spot ETH ETF.

8. JPMorgan Chase reported that the demand for spot ETH ETF will be lower than that for BTC spot ETF. It is expected that the spot ETH ETF will attract up to $3 billion in net inflows for the rest of the year. If staking is allowed, this figure may be as high as $6 billion.

9. Franklin Templeton, the president and CEO of the first batch of US BTC ETF issuers approved for listing, said at Consensus 2024 that Blockchain technology will be transformative, and pointed out that the company is actively researching and applying the technology, emphasizing the efficiency of blockchain and the potential of tokenization to reduce operating costs.

Long-term insights: used to observe our long-term situation; bull market/bear market/structural changes/neutral state
Medium-term exploration: used to analyze what stage we are in, how long this stage will last, and what situation we will face
Short-term observation: used to analyze short-term market conditions; and the possibility of some directions and certain events occurring under certain premises

 

Long-term insights

• US crypto ETF balances
• On-chain chip creation and destruction
• Large inflows and outflows from exchanges
• On-chain full chip distribution

(Figure below: US crypto ETF balances)

ETF balances have recently declined after rising to a peak at the beginning of the year.
As time goes by, BlackRock has slowly taken the largest share this year, while Grayscale's share has declined.
• ETF balances show that BlackRock is slowly taking the lead.

(Figure below: On-chain chip creation and destruction)

Recently, on-chain chip creation has increased significantly.
This means that the market is indeed supported by firmly generated new funds and forces.

（The following figure shows the large inflow and outflow of the exchange）

The recent increase in large outflows from the exchange indicates that a large number of coins have been bought and transferred to the exchange.
Increased outflows usually indicate active buying, which supports the price.
And the outflows in recent days have reached the highest level since the beginning of this year.
It may breed the generation of larger fluctuations in the future; and after the ETF is passed, and when the ETH ETF is about to be approved, there are major whales who buy a large number of crypto assets.

（The following figure shows the distribution of all chips on the chain）

• There are a large number of chips held in the range of US$67,000 to US$60,000.
This shows that there are more chips of this cost in this range, about 1.5 million.
This range provides important support for the price, which will lead to a large number of participants generally carrying out an anchoring effect of repurchase after reaching this chip range.

 

Mid-term exploration

• The amount of old and new coins spent
• BTC exchange trend net position
• Stablecoin total supply net position
• ETH exchange circulation ratio

(The figure below shows the amount of old and new coins spent)

Blue line: New coin supply
Pink area: The ratio of old coins to new coins spent
When the pink area rises to a range above 10, the market may be unstable, and the old coin sales ratio is too high.
Currently, we are in a high-level chip turnover stage, and the new coin supply has stagnated somewhat.
The entire cycle may be in the stage of replacing the old with the new.
If there is a lack of new coin supply support and old coins continue to exert selling pressure, the market may be in a more anxious stock game environment.

（BTC exchange trend net position below）

There is a large amount of BTC outflow from the exchange, which may reduce the potential selling pressure in the market.

（Stablecoin total supply net position below）

The overall growth of stablecoins is small, and the speed of obtaining incremental gains in the market may slow down.
At the same time, there is no reduction in the market.

（ETH exchange circulation ratio below）

The circulation ratio of ETH in the exchange has decreased, and the current market may be more inclined to the safe-haven structure of hoarding BTC.
At the same time, the amplitude of the downward exploration space may be reduced in this process.

 

Short-term observation

• Derivatives risk factor
• Option intention transaction ratio
• Derivatives trading volume
• Option implied volatility
• Profit and loss transfer volume
• New addresses and active addresses
• Bingtangcheng Exchange net position
• Yitai Exchange net position
• High-weight selling pressure
• Global purchasing power status
• Stablecoin Exchange net position
• Off-chain exchange data

Derivatives rating: The risk factor is in the red area. Derivatives risk increases.

(Figure below: Derivatives risk factor)

This week, continue to pay attention to the performance of ETH's risk factor (blue line). Basically consistent with the observation expectations last week, ETH prices are volatile, and there is no continuous short squeeze after the risk factor goes down. This week, the risk factor is expected to be in the red zone. Judging from the risk factor alone, the market may continue to fluctuate and adjust.

(Figure below: Option intention transaction ratio)

Option trading volume has dropped slightly, and the proportion of put options is in the middle.

(Figure below: Derivatives trading volume)

Derivatives trading volume is at a low level.

(Figure below: Option implied volatility)

Implied volatility has dropped slightly.

Sentiment rating: neutral

(Figure below: Profit and loss transfer volume)

Last week, the market performance was basically consistent with observations. The positive market sentiment (blue line) did not form a sustained rise, and the price also showed a continuous shock.
This week, we will continue to observe the positive market sentiment.

(Figure below: New addresses and active addresses)

New and active addresses are at a low level.

Spot and selling pressure structure rating: Overall, there is a large outflow state, and the selling pressure in the market is low.

(Figure below: Net position of Bingtangcheng Exchange)

The net position of BTC exchange is in a state of large outflow.

（E-Exchange Net Position in the Figure Below）

ETH Exchange Net Position is in a state of large outflow.

（High Weight Selling Pressure in the Figure Below）

No high weight selling pressure.

Purchasing Power Rating: Global purchasing power is the same as last week, and stablecoin purchasing power has dropped slightly.

（Global Purchasing Power Status in the Figure Below）

This week, the purchasing power in the Americas has dropped slightly, but the purchasing power in Asia and Europe has returned slightly. Overall, the purchasing power is the same as last week.

（USDT exchange net position in the figure below）

Off-chain transaction data rating: willingness to buy at 65,000; willingness to sell at 71,000.

（Coinbase off-chain data in the figure below）

Willing to buy at prices around 60,000 and 65,000;
Willing to sell at prices around 71,000, 72,000, and 73,000.

（Binance off-chain data in the figure below）

There is a willingness to buy at prices around 65,000 and 66,000;
There is a willingness to sell at prices around 71,000, 72,000, and 73,000.

(Bitfinex off-chain data in the figure below)

There is a willingness to buy at prices around 60,000 and 65,000;
There is a willingness to sell at prices around 71,000, 72,000, and 73,000.

 

Summary of this week:

Summary of news:

1. Following the cooling of CPI in April, the core PCE price index, the most favored inflation indicator of the Federal Reserve, fell again, laying the foundation for a decline in inflation.
2. Data from various aspects such as US GDP show that the US economy is indeed weakening.
3. Powell may no longer be so hawkish at the interest rate meeting in June, giving cryptocurrencies time to bottom out and repair in the middle of the year, waiting for the real upward turning point in the second half of the year.
4. The second quarter may be the turning point of inflation, and the market bets that the real interest rate cut will be 51% in September, and the probability is higher in November.
5. ETH's S-1 cousin is expected to have at least two rounds of drafts, and the probability of passing in mid-June is low.

Long-term insights on the chain:

• Large outflows from exchanges show that the willingness to buy at this price is very strong;
• Holders of chips in the range of $67,000-60,000 will support the price;
• BlackRock occupies the main position of crypto ETFs, and Grayscale has begun to gradually shrink;
• Chips have been created more at this price, which means that real money is entering the market.
• Market tone: accumulation and support.

On-chain mid-term exploration:

1. The growth of new coin supply stagnates, and the consumption of old coins is high;
2. The potential selling compression within BTC exchanges is small;
3. The purchasing power increment speed slows down;
4. The safe-haven structure in the market tends to hoard BTC.

• Market tone: neutral and wait-and-see

From the current situation, the market needs new increments for turnover and breaks through the stock barrier.

On-chain short-term observation:

1. The risk factor is in the red zone, and the risk is increasing.
2. The number of newly added active addresses is at a low level.
3. Market sentiment rating: neutral.
4. The net position of the exchange as a whole shows a large outflow state, and the selling pressure is low.
5. Global purchasing power is the same as last week, and the purchasing power of stablecoins has decreased slightly.
6. Off-chain transaction data shows that there is a willingness to buy at 65,000 and a willingness to sell at 71,000.
7. The probability of not falling below 57,000-61,000 in the short term is 90%; the probability of not rising below 71,000-74,000 in the short term is 67%.

• Market Tone:
Market sentiment is generally neutral, the short-term holder cost line (short-term strong support) has come to around 62K, the large outflow of chips in the exchange and the long-term low derivative trading volume indicate that the next big market is brewing. This week, the overall probability of a large short squeeze is still expected to be low, and it is more inclined to fluctuate upward, and the probability of a large market decline is still extremely low.

Risk Warning: The above are all market discussions and explorations, and do not have directional opinions on investment; please be cautious and prevent market black swan risks. This report is provided by the "WTR" Research Institute.

This article comes from a contribution and does not represent the views of BlockBeats.