Cryptocurrency Market Outlook: Embracing a Trend Reversal, Seizing Investment Opportunities from Short-Term Liquidity

Original Title: "Crypto Market May See Trend Reversal, Capturing Investment Opportunities from Short-Term Fundamentals"

Original Author: Trend Research

1. Macro and Crypto Market Gradual Improvement

1. Signs of Tariff Easing

The short-term direct emotional impact and safe-haven trades brought by Trump's tariff policy have eased, leading to a current market volatility decline. President Trump made remarks in a public appearance on Tuesday, April 22, acknowledging that the current U.S. tariffs on Chinese imported goods are too high and are expected to be significantly reduced. This marks a moderation in Trump's iconic tariff policy stance.

2. Expectations of Rate Cuts

The current CME interest rate futures imply a rate cut starting in June, with a total of three rate cuts expected within the year. This may inject new liquidity into the market.

3. Gradual Implementation of Crypto-Friendly Policies

Since Trump took office, the crypto market has become a key industry for development, aiming to create a new "dollar hegemony" system. (1) On March 6, 2025, President Trump signed an executive order to formally establish the "Strategic Bitcoin Reserve" and "U.S. Digital Asset Reserve." The plan is currently advancing, while dozens of states in the U.S. are advancing Bitcoin state reserve bills. If Arizona passes the final three readings, it will be submitted for the governor's signature.

(2) The U.S. is currently advancing two stablecoin bills, the "GENIUS Act" (Guiding and Establishing National Innovation for Stablecoins Act) and the "STABLE Act" (Stablecoin Transparency and Responsibility Promoting Economic Participation Act), both of which are proceeding in their respective committees and have received approval. The industry generally expects that the final bills may be passed and implemented in the second half of 2025, depending on the speed of coordination between the two houses and the president's stance.

(3) Paul Atkins, nominated by Trump on April 22, officially succeeded Gary Gensler as SEC Chairman. Atkins is seen as a regulator friendly to the crypto industry, expected to reduce enforcement actions against crypto companies and promote industry innovation.

4. BTC Transitioning from Bearish to Bullish

Since mid-March, BTC has outperformed the U.S. stock market, demonstrating a safe-haven property similar to gold. Around April 8, BTC showed a bullish divergence in both RSI and MACD, coupled with sentiment indicators reaching extreme fear levels, forming a recent bottom. As of now, both the MACD fast line and signal line have crossed above the zero line, indicating a shift in market trend from bearish to bullish.

II. ETH Leads Altcoins in Trend Reversal

1. On-chain Data: ETH has experienced a prolonged downtrend for 5 months from December 2024 to the present, with the number of profitable addresses dropping to a lower level seen in the bear market, persisting in oversold conditions. Currently, amidst the overall crypto market recovery, it has entered a key support-resistance swap range.

(1) Profitable Address Data

The number of profitable addresses has sharply declined, from close to 95% profitability in late December last year to only around 35% of addresses still in profit. This level is even lower than during the 2022 bear market.

(2) MVRV Ratio

The MVRV ratio has dropped to 0.8, indicating that the market cap is now below the realized value, significantly entering oversold territory, comparable to the bear phases of 2022 and 2019.

(3) Cost Basis Distribution

The more red, the more chip exchanges. The four active trading regions are: $3200–$3400, $2600–$2800, $1850, and $1650.

In the $3200–$3400 region, over time, holders have not been able to hold firmly but have rather sold off (color changing from orange, yellow to green). In the $2600–$2800 region, the accumulation time is short, but currently seems to still be holding without significant exits. The $1850 region is held by long-term holders, with no major changes since holding since November 2024. $1650 is an accumulation area formed in search of a new bottom after this drop.

Looking at the cost basis distribution, there is a significant accumulation area of long-term holders near $1850. It remains to be seen whether this will create pressure support swapping, forming a new support level.

2. Contract Data Analysis: As the second-largest cryptocurrency by market cap, ETH has a huge contract market size, where the contract scale on trading platforms is several times or even tens of times larger than its wallet balance. Currently, the contract market is experiencing a certain degree of synchronous rise driven by spot funds.

(1) Contract Position Change

The current total ETH contract position is $21.821 billion, with a market cap of $216.9 billion, and OI/MC is around 10%. This indicator is 3.5% for BTC, 7.3% for SOL, and 0.9% for BNB among major coins, showing that ETH has greater liquidity and significance in the futures market.

The current total Binance ETH-USDT contract volume is 1.789 million ETH, making it the largest ETH contract trading pair by position.

According to the chart below, since April 11, ETH has tested the resistance around $1650 three times, and the contract position and price have shown a positive correlation. On the evening of April 22, a significant increase in ETH contract positions drove the price above $1695, and subsequently, the total contract position remained range-bound while the price continued to break through to $1800. This rally was driven by both leverage and spot capital.

(2) Exchange Balance Situation

There is a significant disparity between the ETH balance in exchange wallets and the corresponding contract volume held by exchanges. The Bybit exchange wallet balance is 276.3k ETH, while the exchange's contract position is 1.147 million, meaning Bybit has opened positions of 1.147 million ETH based on a balance of 276.3k ETH, a leverage ratio of 4.15x. The Gate wallet balance is 154k ETH, and the exchange's position is 1.9052 million, resulting in a 12.3x leverage ratio. The Binance wallet balance is 4.057 million ETH, and the exchange's position is 2.3926 million, a 0.6x leverage ratio, these data represent the best-case scenario for each exchange. In many exchanges currently, the contract position for ETH is several times the reserve balance, the high leverage derivative scale has increased capital efficiency, and provided significant liquidation profit potential for both long and short positions.

(3) Monthly Liquidation Data

Binance short liquidations are concentrated below $1900, high-leverage short liquidations are concentrated from the current price to $1847, while long liquidation contract prices are concentrated at $1682.

The majority of Hyperliquid's short liquidation prices are concentrated around $2478, followed by $1896 and $1931, while long liquidation prices are relatively more scattered, ranging from $1765, $1471, $1426 to as low as $1099.

3. Technical Analysis: Several technical indicators for ETH have recently signaled a potential bottom, suggesting a possible trend reversal. The current price is testing the upper boundary of a downtrend channel and a horizontal resistance level, with a breakout and hold or a confirmed pullback potentially indicating a buying opportunity.

Over the past four months, ETH has been in a sustained downtrend, experiencing a 66% price drop from a high of $4100 to a low of $1385. Recently, there has been a strong bullish defense observed on the chart, with a price rebound of about 30% from the low point to around $1800 as of April 23.

（1）Candlestick Patterns

In the chart below, the 1st candlestick exhibits a Wyckoff Theory spring pattern, with the day's volume being the highest in 2 months. This candlestick has a long lower shadow and a narrow body, showcasing a lack of corresponding results for the effort, indicating potential buying pressure from institutional investors at this level. In a downtrend, the appearance of a Spring may signal a trend reversal, serving as one of the signals for a shift from bearish to bullish.

The 2nd and 3rd candlesticks show a Bullish Engulfing pattern, suggesting a bullish reversal. The Bullish Engulfing pattern consists of two candlesticks, where the first one is bearish and the second one is bullish, with the bullish candle's body entirely covering the bearish candle's body. This formation typically occurs in a downtrend and is seen as a signal that the market trend might reverse to the upside.

（2）Moving Averages

ETH's price has been trading below the 20-day EMA (red line) for an extended period. However, it made a strong breakout above the EMA20 yesterday, indicating a potential trend reversal. Further confirmation can be sought by observing if the candlesticks in the next 2–3 days can sustain above the EMA20.

（3）MACDMomemtum

A very obvious divergence between the daily MACD and momentum can be observed, where the price makes a new low but the indicator does not, indicating a weakening of bearish momentum and suggesting a potential end to the downtrend. Additionally, on April 13th, the MACD fast line crossed above the slow line, forming a golden cross, providing a potential buy signal.

（4）RSIMFI

Both the Relative Strength Index and Money Flow Index entered oversold territory on April 8th.

III. Altcoin Opportunity Exploration

Recently, with the rebound of the cryptocurrency market, BTC broke through a key resistance level, ETH rose to an important support-resistance conversion level, leading a rally in the overall market sentiment and showing signs of reversal. Some assets achieved astonishing gains, with NEIROETH in the meme sector rising over 210% in 3 days, and the AI sector having the largest overall increase, with ZEREBRO gaining over 200% in 3 days. Both assets showed unusual activity at the contract level and demonstrated a further upward trend. This article analyzes these two top performers from different sectors.

1. NEIROETH

（1）Project Introduction

NEIROETH (Neiro on Ethereum) is a meme coin based on Ethereum, inspired by Neiro, a Shiba Inu that became the new pet of Kabosu, the owner of the original Dogecoin, on July 28, 2024. NEIROETH has always sought to attract community attention through its cultural association with Dogecoin.

A concept similar to NEIROETH is NEIRO (First Neiro on Ethereum), which was launched subsequently, both claiming to embody the spirit and community of the Shiba Inu Neiro, sparking the famous "NEIRO Upper and Lower Case Dispute." Ultimately, NEIRO listed on Binance for spot and futures trading, while NEIROETH only listed on Binance futures. Nevertheless, both projects are meme projects with a large community drive.

（2）Token Basic Information

NEIROETH currently has a market capitalization of around 61 million USD, with a total supply of 1 billion, all circulating with no team reserves.

The 24-hour spot trading volume is 35 million USD, with spot trading volume mainly concentrated on Bybit (30.65%) and Gate (29.38%). Regarding spot chip distribution, the top three holders are Bybit (26.84%), Gate (12.67%), and Bitget (5.25%). Two unmarked whale addresses hold 6.86% and 5.11% respectively, market maker Wintermute holds 6.52%, indicating that the main chip distribution of this token is in mid-tier exchanges, some whales, and in the hands of market makers. The top holder Bybit holds 15.16 million USD in chips control.

The 24-hour contract trading volume is 843 million USD, which is 24 times that of spot trading, with contract trading volume mainly concentrated on Binance, OKX, and Bybit. The contract trading volume of the three exchanges has increased by 38.48%, 27.16%, and 50.45% in the past 24 hours, and the open interest has increased by 121%, 99.7%, and 104.2%. The above data reflects that the main trading market for NEIROETH is the futures market, which has seen recent abnormal movements. At the same time, its token price has also seen a stunning increase, with a 3-day increase of over 200%.

（3）Contract Analysis

Combining the above data, it is not difficult to see that the current NEIROETH contract trading is very active, with a high total open interest, OI/MC ratio exceeding 13.8 times. The underlying asset currently has sufficient counterparties and potential profit sources in the futures market.

Source: Coinglass

Breaking down the specific indicators, according to Coinglass data, NEIROETH currently has an aggregated long/short ratio of 1.05 across the network,

In the most liquid exchange, Binance, the account long/short ratio is 0.5576, with large accounts holding a long/short ratio of 1.919, reflecting that overall short accounts outnumber long accounts, but large holders have more long positions. Looking at the contract CVD growth, the net long positions have been steadily increasing over the past 4 days, showing an overall bullish trend. From the latest data, 24-hour long liquidations amount to 384,700 USD, while short liquidations total 3,037,500 USD, with the main liquidation being short positions.

2. ZEREBRO

(1) Project Introduction:

ZEREBRO is an artificial intelligence system that can create, distribute, and analyze content on decentralized and social platforms. Its native token is deployed on Solana, and digital artwork is minted on Polygon.

ZEREBRO has demonstrated its progress as an AI agent through autonomous actions in various fields, including social, art, and financial autonomy, with specific achievements such as:

• Autonomous launch of the Pump.fun token on the Solana blockchain, reaching a peak market value of over 4 billion USD.

• Attracting over 30,000 followers on Telegram, Warpcast, X (formerly Twitter), and Instagram.

• Released a mixtape named "Genesis," with over 20,000 plays on Spotify.

• Signed with the music DAO Opaium to further expand into the art domain.

(2) Token Basic Information

Total token supply of 1 billion, issued in December 2024, fully circulating tokens, with a market capitalization of 76.85 million USD.

Among the top ten holding addresses, exchanges are the major holders, with 6 exchange addresses holding approximately 38% of the tokens. Additionally, 4 other addresses collectively hold 12%. The chip distribution is relatively dispersed.

(3) Contract Analysis

As of April 23, the 24-hour holding volume has increased by over 300%, totaling 48 million USD, with an OI/MC ratio of approximately 65%; the trading volume has risen by 782%, driving a 165% price increase.

The contract's CVD continues to rise, indicating a position of strength. Spot CVD has declined slightly, showing weak upward momentum. The funding rate is positive, higher than usual levels, indicating a substantial amount of funding is going long. The holding volume has experienced rapid growth and is currently held at a high level, with no significant deleveraging behavior observed yet. The whale holding volume long/short ratio is 1.4, indicating whales are bullish. The long/short position ratio is 0.45, showing large funds are bullish. Looking at the active buy/sell amount (difference), there was a cluster of intense buying in the early hours of April 23, with relatively fewer sells.

4. Summary

Against the backdrop of an improved macro environment, BTC has achieved a key level breakthrough. This article focuses on various data related to the "King of Altcoins" ETH. Through on-chain data, contract analysis, and technical analysis, it is observed that ETH is currently at a key support-resistance level interchange. If a breakthrough occurs, it may usher in a favorable trend reversal. Furthermore, in this market situation, it is important to pay attention to the data anomalies of altcoins. Based on chip structure and contract data, the article delves into the rise logic of NEIROETH and ZEREBRO. Beneath the trend, more uptrends in the crypto market are on the horizon.

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