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Weekly Review
This week, from April 18 to April 24, the highest price of Sugar Orange was around $30,480 and the lowest price was close to $27,100, with a fluctuation range of about 12.5%.
Observing the chip distribution chart, there are a large number of chips traded around $27456, which will provide certain support or pressure.
• analyze:
1. $25,000 ~ $31,000, approximately 2.41 million pieces;
2. $18,500 ~ $24,500, approximately 2.81 million pieces;
The probability that the price will not fall below 18,000 to 22,000 in the short term is 67%.
Important news
Economic News
1. The initial reading of U.S. manufacturing PMI in April was 50.4, higher than the expected 49 and the previous value of 49.2 in March.
a. This is the highest reading since October last year and the first time since November last year that it has risen above the 50 boom-bust line and returned to expansion.
2. The preliminary reading of the U.S. services PMI for April was 53.7, higher than the expected 51.5 and the previous value of 52.6 in March.
a. It hit a new high since April last year and was above the 50 boom-bust line for the third consecutive month and was in the expansion range.
3. The preliminary reading of the US Markit composite PMI in April was 53.5, higher than the expected 51.2 and the previous value of 52.3 in March.
a. It hit an 11-month high since May last year and was above the 50 boom-bust line for the third consecutive month.
4. After an unexpected surge in February, U.S. existing home sales resumed their downward trend in March and fell short of expectations.
a. U.S. existing home sales fell 2.4% month-on-month in March, lower than the expected 1.8% drop.
b. The median price of existing homes in the U.S. fell 0.9% in March from a year earlier, the largest year-on-year drop since January 2012.
5. The Conference Board's Leading Economic Indicator (LEI) accelerated its decline in March, falling 1.2% month-on-month, far higher than the market expectation of 0.7%. This is the 12th consecutive month of month-on-month decline in LEI, and the year-on-year decline was as high as 7.8%.
a. The market is concerned that LEI’s 12-month consecutive decline indicates that a U.S. recession is imminent.
6. In 2022, the U.S. dollar’s share as a global reserve currency fell sharply by 8% in one year to 47% of global total reserves.
a. This decline is 10 times the average annual rate of decline in the dollar market share in previous years.
7. This week, both U.S. crude oil and Brent crude oil showed a volatile downward trend; the price of gold fluctuated and fell slightly compared with the beginning of this week.
Encrypted ecological news
1. The Ethereum Conference EDCON will be held from May 19th to 23rd. V God and 8 members of the Ethereum Foundation will attend the meeting.
2. The European Union passed the new cryptocurrency licensing system MiCA, becoming the first major jurisdiction in the world to introduce comprehensive crypto laws.
3. Russia plans to set up new institutions to mine cryptocurrencies and settle international payments.
4. Hong Kong develops its own central bank digital currency, e-HKD, whose architecture is deployed by regulators to banks for implementation.
5. The Hong Kong subsidiary of China Bank of Communications Co., Ltd. is actively exploring cooperation with cryptocurrency companies. HashKey PRO under HashKey Group has established a partnership with ZABank and Bank of Communications (Hong Kong).
6. Huobi announced its Q1 2023 quarterly report, based on which it is estimated that Huobi’s revenue in the first quarter was only US$16.55 million.
7. Deribit launches zero-fee spot trading.
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
• Ratio of inflow and outflow of Bingtang Orange and ETH exchanges
• Profit taking
In the medium and long term, the market's risk aversion and conservative preferences have not completely dissipated.
(The figure below shows the inflow and outflow ratio of Bingtang Orange and ETH exchanges)
It seems that more users have not yet reacted to more panic episodes.
More assets are concentrated in Orange Juice than ETH.
In addition, the performance of small-cap currencies is generally not very good.
There is not much appetite to drive greedy risk appetite.
(The following figure shows profit selling pressure)
Faced with a strong rebound, market participants who made profits did not have too much impulse.
Markets tend to experience the biggest profit-taking and shocks during top casting and major downtrend phases.
The current situation is that the profit shock is starting to slowly decrease compared to time.
Although the market has not been further relieved from risk aversion and panic, the impact on profits has been reduced to a certain extent compared with before.
Therefore, the market's resilience in the participant structure should be better than before and the pressure it faces should be lower than 30,000.
The current pressure from market participants to sell is actually not high based on the overall macro chain data.
Mid-term exploration
• Non-zero balance address
• Purchasing power difference
• ETH active addresses
• Accumulation coefficient
• Loss transfer status and percentages
• Trading volume
Growth Rating: Slowing
(Figure below shows non-zero balance address)
Non-zero balance addresses can be regarded as the number of new effective users in the market.
The decrease in the number of users that may have occurred before this pullback is one of the manifestations of the slowdown in growth in the market.
Perhaps the number of users in the venue will become the key to judging growth.
(Purchasing power difference in the figure below)
The purchasing power gap is slowly shrinking and recovering, and may have eased slightly compared to the previous deterioration.
But the overall situation is still in a state of outflow, and perhaps it will take more time for the emotions to be digested.
Similarly, based on the sentiment of stock, even small changes may affect the direction of the market.
Accumulation status rating: Slow accumulation in the medium and long term, ETH activity slows down
(The following figure shows the active ETH address)
ETH's network activity is decreasing, and it may take some time to restore on-site growth expectations.
Combined with long-term insights, as risk aversion increases, the current reorganization of the narrative may be overall in the market.
Perhaps waiting for growth is the right thing to do right now, and expectation management at this time should be adjusted dynamically.
(Figure below: Accumulation coefficient)
Brown line: accumulation coefficient
Blue area: Short-term participant supply
The medium and long-term groups are still accumulating and growing slowly, and now may be a good time for them to make arrangements.
At the same time, due to their large size, their influence on the market may gradually increase.
If we only look at their accumulation status, the medium- and long-term fundamentals have not yet shown signs of collapse, and the problem that may need to be dealt with urgently is the slight loss of short-term participants.
On-site game rating: Losers are still exploring the downward space
(Loss transfer status and percentage in the figure below)
The amount of losses accumulated by UTXO is in a state of hesitation and oscillation, and may currently be transforming between constant trial and stability.
The current contraction of loss transfer volume is relatively small.
As there is still a certain degree of risk aversion in the market, the focus of current price stabilization and contraction may lie in the overall degree of trial by losers.
From the perspective of inventory, internal tearing and interchange may be the highlight of this stage.
(Figure below: Trading volume)
The trading volume represents the willingness to trade in the market. At this time, after a period of bargaining in the market, there is still a high willingness to exchange chips.
Judging from the current situation, it may be that the mid- to long-term buyers are trying to take over the chips in the market.
However, since losers have a greater impact on the downward space, turnover may be required for a period of time.
Short-term observation
• Derivatives risk factor
• Option intention to trade ratio
• Derivatives trading volume
• Option implied volatility
• Profit and loss transfer volume
• 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: Falling back to neutral area, risk has decreased.
(The figure below shows the risk factor of derivatives)
The 4.17 weekly report pointed out that the pressure of long liquidation increased, and then the derivatives risk factor began to rise after reaching the danger zone last week, and the market fell accordingly. The current derivatives risk factor has fallen back to the neutral zone, and the pressure of long liquidation has decreased.
(The figure below shows the option intention transaction ratio)
Option trading volume has increased slightly, and the proportion of put options has increased slightly. Currently, put options are still at a high level.
(Figure below shows derivatives trading volume)
Last week's price drop led to an increase in derivatives trading volume. Currently, derivatives trading volume has fallen to a lower level. This reflects the current wait-and-see sentiment of derivatives traders towards the market.
(The figure below shows the implied volatility of options)
The implied volatility of options has decreased, indicating that the activity and willingness of option traders in the current market have weakened.
Emotional status rating: Overall wait-and-see and cautious
(The following figure shows the amount of profit and loss transfer)
Last week's price drop led to a decrease in profit transfer volume, while loss transfer volume increased significantly. Currently, the profit transfer volume is at a low level, and the loss transfer volume is temporarily stable.
This shows that the current selling pressure on profitable chips is relatively small and the panic sentiment of losing chips has eased.
(Figure below shows newly added addresses and active addresses)
The number of new and active addresses has declined to a certain extent, but the overall number is at a medium level, indicating that the current market activity is average.
Spot and selling pressure structure rating: Moderate inflows accumulated and selling pressure eased.
(Figure below: Net position of Bingtang Orange Exchange)
During the price decline last week, there was a medium-sized inflow accumulation. At present, half of the inflow chips have been absorbed by the market. Combined with the current purchasing power level, this shows that there is some buying at the current price, but it is not strong enough.
(The following figure shows the net position of E-Tai Exchange)
Unlike BTC, ETH is showing an outflow trend. Combined with the high-weight selling pressure CDD, ETH is sold after being transferred out of the exchange. The outflow has slowed down.
(Figure below shows high-weight selling pressure)
Last week, ETH experienced a large-scale high-weight selling pressure. Currently, the high-weight selling pressure on BTC and ETH is in a relatively stable state.
Purchasing power rating: Global purchasing power has declined significantly, and stablecoin purchasing power has been lost slightly.
(Figure below shows the global purchasing power status)
The 4.17 weekly report mentioned that global purchasing power has declined significantly, and then the market entered a downward correction. Currently, global purchasing power is still declining, among which Europe's purchasing power has dropped to negative values, and only Asia and America have a small amount of purchasing power remaining.
(The following figure shows the net position of USDC exchanges)
USDC is currently in a state of slight outflow.
(The following figure shows the net position of USDT exchanges)
USDT is in a state of small outflow.
Off-chain transaction data rating: There is a willingness to buy at the price of 26,500 and a willingness to sell at the price of 31,000.
(The following figure shows Coinbase off-chain data)
There is willingness to buy at the price of 26500–26700;
There is a willingness to sell at the 31200 price level.
(Binance off-chain data in the figure below)
There is willingness to buy at 26500, 26625–26675, and 27000;
There is a willingness to sell at the 30400 price
(Bitfinex off-chain data in the figure below)
There is willingness to buy at the price of 26950;
There is a willingness to sell at the price of 29150–29250.
This week’s summary:
Summary of news:
The market generally believes that the rise in risk sentiment since the beginning of the year is due to the improvement in economic prospects, but it may be more because central banks around the world have injected more than 1 trillion in liquidity into the market, that is, the "invisible" quantitative easing policy. However, in the next few weeks, global liquidity is facing a reduction of 600 billion to 800 billion US dollars, and the rise brought by this risk sentiment may be weakened.
Following the super hawkish Bullard, another hawkish Fed official, Cleveland Fed President Loretta Mester, expressed support for another rate hike, but she was also cautious, saying that attention should be paid to the banking pressure that could suppress credit and the economy in the near term. Tighter credit conditions caused by the banking crisis could affect economic activity and create pressure to suppress inflation.
The market is betting that the Federal Reserve will cut interest rates this year, but executives from institutions including Blackstone, BlackRock and JPMorgan Chase all believe that inflation remains sticky. Some institutions also believe that if wage inflation remains high, there is a possibility of another rate hike in June.
The market always slowly changes prices amidst panic and doubt, coupled with fundamental supply and demand shocks.
Historically, the Fed's tightening cycles tend to continue raising interest rates until the interest rate is higher than the CPI. If we follow this line of reasoning, there is not much room for continued rate hikes.
On the other hand, the crisis in the US banking industry has led to a gradual increase in the price correlation between Bitcoin and gold.
The possible effect is that the banking crisis that arises in the second half of the year will not be resolved immediately.
Then, part of the panic and anxiety about banks will slowly shift to gold and oranges as a safe haven.
On-chain long-term insights:
1. The overall risk aversion and anxiety on the macro chain has not been particularly alleviated;
2. However, the actual profit-taking pressure has been relatively reduced, and the market has more resilience.
• Market setting tone:
The mood of anxiety still permeates, but the selling pressure has been alleviated to a certain extent.
On-chain mid-term exploration:
1. It takes time to restore the number of users on the site;
2. The purchasing power gap slowly shrinks and recovers;
3. It will take time for ETH activity to recover;
4. The medium- and long-term groups are still supporting the market, and there is a slight loss of liquidity among short-term participants;
5. Losers may be testing the market's downside potential;
6. The trading volume on the exchange is still high, which may be in the turnover stage.
• Market setting tone:
Change hands, accumulate
It may take some time for the turnover to continue, and for the losers to digest their downward emotions.
At the same time, the willingness of medium and long-term groups to hold continues to increase.
On-chain short-term observations:
1. The risk factor of derivatives is in the neutral zone, and the risk of derivatives has decreased;
2. Derivatives trading volume fell back to a low level; derivatives traders took a wait-and-see attitude;
3. The overall market sentiment is cautious and wait-and-see;
4. Exchange data showed that a moderate amount of chips were accumulated, and the selling pressure eased. ;
5. Global purchasing power has declined significantly, and stablecoin purchasing power has been lost slightly;
6. Off-chain transaction data shows that there is a willingness to buy at the price of 26,500 and a willingness to sell at the price of 31,000.
7. The probability of not falling below 18000 ~ 22000 in the short term is 67%
• Market setting tone:
The current market activity is average, the overall sentiment is cautious, and there is a lack of motivation and confidence. Overall, the current market needs more positive news and the recovery of purchasing power to break the current relatively stable situation.
Strategic recommendations:
Trading in a narrower area may be used to hedge against market uncertainty risks.
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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