On-chain data for Week 31: The possibility of a deep recession in the United States is low, and the narrative cycle will continue after twists and tu

Original title: "An atypical sell-off on the chain, the advent of a crypto black swan? | WTR 8.05"

Original source: WTR Research Institute

Review of this week

This week from July 29 to August 4, the highest price of Bingtang Orange was around $70079, the lowest price was close to $59850, and the fluctuation range reached about 14%.
Observing the chip distribution chart, there are a large number of chips traded around 63000, which will have a certain support or pressure.

• Analysis:
1. 59000-63000 is about 1.31 million pieces;
2. 64000-68000 is about 1.35 million pieces;
• The probability of not falling below 42000~47000 in the short term is 70%;
• The probability of not rising above 71000～74000 in the short term is 67%.

Important news

Economic news

1. At the Federal Reserve’s interest rate meeting on Thursday, the Federal Reserve kept the benchmark interest rate unchanged at 5.25%-5.50% for the eighth consecutive time.

2. Powell said: In this meeting, there was indeed an in-depth discussion on interest rate cuts; the time is approaching when interest rates can be lowered, and the consensus of the Fed is gradually approaching a rate cut;

3. If the inflation rate falls in line with expectations and the labor market remains stable, interest rate action in September may occur.

4. In the Fed's monetary policy statement, the long-standing "high attention to inflation risks" was deleted and replaced with "The Fed is concerned about the risks posed by its dual real names", and inflation concerns are disappearing from the spotlight.

5. The data released by the United States on Wednesday showed that the number of ADP jobs in the United States in July increased by 122,000, which was 150,000 lower than the previous value and 150,000 lower than the expected value, the smallest increase since January 2024. The US ADP data and labor cost indicators show a slowdown in the job market, consolidating expectations for a rate cut in September.

6. Jan Hatzius, chief economist of Goldman Sachs, raised the probability of the US falling into recession in the next year from 15% to 25% in the report.

7. Goldman Sachs expects the Federal Reserve to cut interest rates by 25 basis points in September, November and December. In addition, Goldman Sachs said that if its forecast is wrong and the August employment report is as weak as July, then a 50 basis point rate cut in September is very likely.

Crypto Ecosystem News

1. MtGox issued a statement saying that following the repayments on July 5, 16 and 24, 2024, on July 31, the trustee repaid some creditors in the form of BTC and BCH through some designated crypto trading platforms in accordance with the compensation plan. So far, more than 17,000 creditors have been repaid.

2. Previously, MtGox mentioned in court documents and related reports at the time of its bankruptcy that approximately 24,000 creditors submitted claims, and the repayment completion rate was roughly estimated to be 70.83%.

3. The draft BTC reserve plan proposed by US Senator Cynthia Lummis shows that part of the funds for purchasing BTC will be realized by revaluing the Federal Reserve's gold.

4. According to the draft, the plan will purchase up to 200,000 BTC per year for five years, totaling 1 million BTC, and BTC will be held for at least 20 years, only to repay federal debt.

5. Analyst MaxBecauseBTC said that the Bollinger Bands of the BTC weekly time frame have only been so tight twice in history, in April 2016 and August 2023.

6. It is rumored that Jump Crypto market makers fell and began to sell off.

Long-term insight: used to observe our long-term situation; bull market/bear market/structural change/neutral state
Medium-term exploration: used to analyze what stage we are currently 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 conditions

Long-term insight

• Whale position status
• Total spot selling pressure
• US market purchasing power
• Inactive whale group

(Below: Whale position status)

From the perspective of the whale group, there is an overall buying intention, and there is no particularly large change.
And in the process of falling, it has been maintaining the buying stage.

（Figure below: Total spot selling pressure）

From the total spot selling pressure, the overall pressure has not increased, that is, this round of selling is not mainly for profit. It is not premeditated.

（Figure below: US market purchasing power）

The purchasing power of the US market has recently begun to decline and weaken, and the market has begun to decline. If we want to wait for the right side, the purchasing power of the US market may need to fall back to the positive direction.

(The following figure shows the group of whales that have never been active)

This special group of whales that have never been active is also buying as a whole;
They are very important for the market's decisiveness, which means that there is no very obvious selling in the large group.
The reason for the larger sell-off may be the liquidation of local institutions, market sentiment and the influence of foreign markets.
The overall market is still buying and taking in.

Mid-term exploration

• Network sentiment positivity
• Short-term participant output profit rate
• Structural analysis model of each price level
• WTR risk observation indicator 1

(Figure below Network sentiment positivity)

Network sentiment has fallen to a large extent, and it may take some time for the overall sentiment to recover.

(Figure below Short-term participant output profit rate)

This data has been calculated. When the value reaches 1.2, that is, it is biased towards profit selling, the left top prompt may appear in the market.
When the value reaches 0.88, it may be biased towards loss sentiment squeeze, and the left bottom prompt will appear in the market.
Currently in the left bottom range, it may be necessary to estimate the price again.

（The following figure shows the structural analysis model of each price）

According to the price analysis model, 56,000 is the fundamental lower limit calculated by short-term cost.

If it falls below the lower limit, the bottom area of the fundamentals may be formed. A similar structure can refer to the rapid decline caused by the 519 incident in 2021.

If the fundamentals are simulated and reviewed according to the status at that time, if the price does not recover rapidly during the process of exploring the lower limit of the fundamentals, the market may have a correction of nearly 1-2 weeks.

At the same time, if the short-term loss of -25% floating loss is calculated, 50,000 may be an important support or pressure level.

（WTR risk observation indicator 1 in the figure below）

From the current situation, ETH still has a high spot risk.
This data is mainly used to observe the immediate decline in the market. It may be necessary to pay attention to the decline in data for real stabilization.
At present, it may be better to take a wait-and-see attitude.

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 near the green area, and the derivatives risk is low.

(The following figure shows the derivatives risk factor)

This week, the derivatives risk factors of ETH and BTC are both close to the green area. Last week, it was expected that there would be more volatile market conditions, and then the market retreated. The current on-site derivatives market is more affected by the external environment.

（Figure below: Option intention transaction ratio）

Option trading volume rose slightly, and the proportion of put options was at a low level.

（Figure below: Derivative trading volume）

Derivative trading volume was at a medium-high level.

（Figure below: Option implied volatility）

Implied volatility has dropped significantly.
Sentiment rating: Negative and bearish

（Figure below: Profit and loss transfer）

As mentioned last week, the market's positive sentiment (blue line) has not continued to increase, and the current market panic sentiment (orange line) has continued to increase with the current pullback.

Currently, the market sentiment is negative and bearish. Although the loss transfer volume has not increased significantly, it still needs to be observed.

(Figure below: New addresses and active addresses)

New and active addresses are at a low level.
Spot and selling pressure structure rating: BTC inflows are accumulated, and ETH inflows are small.

(Figure below: Net position of Bingtangcheng Exchange)

Although BTC has a small outflow at present, the large amount of chips that flowed into the exchange before have not been digested yet.

（E-Exchange Net Position in the Figure Below）

ETH Exchange Net Position is in a state of small inflow.

（High Weight Selling Pressure in the Figure Below）

There is no high weight selling pressure at present.
Purchasing Power Rating: Global purchasing power is losing a moderate amount, and stablecoin purchasing power is losing a large amount.

（Global Purchasing Power Status in the Figure Below）

America's purchasing power is losing as a whole this week, and the purchasing power performance is also relatively negative.

（USDC Exchange Net Position in the Figure Below）

USDC Exchange Net Position is in a state of large outflow.
Off-chain transaction data rating: Willingness to buy at 45,000

(Coinbase off-chain data in the figure below)

Willingness to buy at prices around 39,000~48,000;

(Binance off-chain data in the figure below)

Willingness to buy at prices around 45,000;

(Bitfinex off-chain data in the figure below)

Willingness to buy at prices around 45,000 and 48,000.

Summary of this week:

Summary of news:

1. In the short term, the selling of the US government, the German government, Grayscale, and Mentougou has almost been completed.

2. In the medium and long term, the negative impact will not always exist, and the market sentiment will gradually become desensitized. There will be two years of interest rate cuts in the future. The United States still has more than 6 trillion US dollars of money funds waiting to be released, and the possibility of a deep recession in the United States is also very small; from these perspectives, there is no possibility of too many major negative impacts.

3. Therefore, after the twists and turns, the narrative cycle will continue.

Long-term insights on the chain:

1. The general whales are still accumulating funds, and there is no obvious selling behavior;
2. The total spot selling pressure has not increased, and it is not a long-planned profit-taking;
3. The purchasing power of the US market has declined, and the purchasing situation in the Americas is currently poor. The right side may have to wait until it returns to a positive value;
4. The group of whales that have not moved is still buying, and they play a decisive and important role in the market.

• Market Tone:
The main group has not sold off significantly and is still hoarding.

On-chain mid-term exploration:

1. The network sentiment is not very positive and may take some time to sort out;
2. The left bottom prompt is currently appearing;
3. According to short-term cost calculations, 50,000 may be an important support or pressure level;
4. The spot risk of ETH may need to be released and alleviated.

• Market Tone:
Risk Control
The current market enthusiasm is poor and it is necessary to prevent the occurrence of a worse situation, but there are also signs of the left bottom;
From the perspective of deduction, the bottoming process will be more difficult, and it is better to participate cautiously.

On-chain short-term observation:

1. The risk factor is near the green area, and the risk of derivatives is relatively low.
2. The number of newly added active addresses is relatively low.
3. Market sentiment rating: negative and bearish.
4. The overall BTC inflow of the exchange net position is accumulated, and ETH inflow is small.
5. The global purchasing power is lost in a moderate amount, and the purchasing power of stablecoins is lost in large quantities.
6. Off-chain transaction data shows that there is a willingness to buy at 45,000.
7. The probability of not falling below 42,000~47,000 in the short term is 70%; among them, the probability of not rising below 71,000~74,000 in the short term is 67%.

• Market tone:
The overall market sentiment is negative and bearish, and the purchasing power is lost as a whole. Whether the market will continue to fluctuate and fall further still needs to observe the external environment, but the probability of a direct sharp drop is 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 is from a contribution and does not represent the views of BlockBeats.