Original title: "CPI is coming, how should the market bet in advance? | WTR 8.12"

Original source: WTR Research Institute

Review of this week

This week from August 5 to August 12, the highest price of Bingtang Orange was around $62745, the lowest price was close to $49000, and the fluctuation range reached about 28%.
Observing the chip distribution chart, there are a large number of chips traded around 61000, which will have a certain support or pressure.

• Analysis:
1. 59000-63000 is about 1.3 million pieces;
2. 64000-68000 is about 1.23 million pieces;
• The probability of not falling below 54000~57000 in the short term is 70%;
• The probability of not breaking 64000～67000 in the short term is 74%.

Important news

Economic news

1. QCP Capital report pointed out that despite the incredible market turmoil on Monday, assets have rebounded sharply, and traditional financial markets have felt the normalization of cryptocurrencies for the first time. It is recommended to pay attention to the trend of Nasdaq, Nikkei and USD/JPY, as cross-asset correlation remains at a high level in the short term;

2. Tom Lee of Fundstrat reports that after such a rapid decline in VI, US stocks tend to rise significantly in the future.

3. VIX closed down more than 10 points yesterday. The first three times were in 2010, 2011 and March 2020. One year later, the S&P 500 index rose by an average of 37%.

4. JPMorgan believes that three-quarters of the world's carry trades have been closed.

5. The use of the Federal Reserve's reverse repurchase tool (PPR) fell below $300 billion to $292 billion for the first time since mid-2021.

6. S&P predicts that the Fed will cut interest rates by 25 basis points in September, starting a new round of easing cycle, with a cumulative interest rate cut of 50 basis points this year and another 100 basis points next year, which will help the Fed achieve a soft landing.

7. Analyst Mike Dolan believes that the stock market sell-off this time is because traders overestimated the possibility of recession and overreacted, and the interest rate market may not even price a recession at all. The Fed only needs to loosen the tightening "brake" to keep the market expanding.

Crypto Ecosystem News

1. A New York court finally approved the bankrupt cryptocurrency trading platform FTX and Alameda Research to repay $12.7 billion to FTX creditors. This move is part of a settlement with the U.S. Commodity Futures Trading Commission (CFTC).

2. Australia's Monochrome Spot BTC ETF (IBTC) holds 110 BTC as of now.

3. According to HODL15Capital data, as of August 7, Hong Kong's BTC spot ETF held a total of 4,379 BTC, equivalent to approximately $278 million.

4. Cointelegraph reported that Morgan Stanley, a major U.S. asset management company, authorized its 15,000 financial advisors to recommend BTC spot ETFs to clients starting August 7.

5. Confirmed a previous CNBC report that the company plans to recommend BTC ETFs starting August 7. Winning Morgan Stanley's approval is a milestone in the cryptocurrency space. Among major wealth management companies, Morgan Stanley is the largest.

6. JPMorgan analysts said: The large-scale liquidation of MtGox and Genesis bankruptcy may be over, and cash payments from FTX bankruptcy later this year may stimulate demand in the cryptocurrency market.

7. This round of BTC's sharp decline was not caused by cryptocurrency-specific problems, but by the pullback of traditional risk assets such as U.S. stocks. Institutional investors helped support BTC's rebound, but retail investors also contributed to BTC's decline.

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 certain directions and certain events occurring under certain conditions

Long-term insight

• US purchasing power
• Short-term investor cost line
• The giant whale that never flows

(Figure below: US purchasing power)

After a period of hesitation, US purchasing power began to gradually recover, and the market is slowly warming up, although not as strong as before.

(Figure below: Short-term investor cost line)

The latest short-term cost line has reached around 64,500, so the pressure faced by the market in the future may also be around 64,500.
Because the market faces the anchoring effect of short-term participants, they may generate some selling pressure when they recover their capital.

(Below: The Unmoving Whale)

The mysterious whale group that has never moved is increasing its purchases, and the market still has a lot of support, which is constantly promoting market pricing.

Mid-term exploration

• Short-term and long-term participant supply
• USDC exchange net position
• Liquidity supply
• Whale comprehensive score model
• Network sentiment positivity
• BTC exchange trend net position

(Short-term and long-term participant supply in the figure below)

By time, the current long-term and short-term participants in the market are increasing and decreasing respectively.
Long-term participants are supporting the market, and the lack of short-term overall participation may be manifested as a shortage of liquidity, and the market is easily affected by large orders.

(USDC exchange net position in the figure below)

The purchasing power of USDC has been restored to the level before the decline, and it is currently stagnant.
The pace of the market may slow down.

（Figure below: Liquidity supply）

After a certain increase in liquidity supply, it shows a slowing pace. It is possible that participants in the market are relatively cautious about the market.

However, when the market falls, they will show interest. This situation is more like they are more willing to buy chips in the market when the market falls on the left side.

（Figure below: Whale comprehensive score model）

The holding status of whales is divided into 5 levels.
The score of whales has dropped from Very High and is currently hovering between High and Medium.
The sentiment of whales has dropped, and at the same time, the accumulation has slowed down.

（Figure below: Network sentiment positivity）

The current network sentiment has slowed down and there may be signs of sentiment recovery in the market (compared to the previous continuous decline).
If we think from the perspective of right-side entry, the current rise in sentiment may not be enough to indicate that this is a good entry point.

(BTC exchange trend net position in the figure below)

BTC may gradually be liberated from the "stress state", and the balance within the exchange is gradually decreasing.
It is possible that the current accumulation state will gradually reduce the extent of BTC pricing decline.

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 close to the red area, and the risk of derivatives is increasing.

（Figure below: Derivatives risk factor）

The market will be led by BTC in the next period of time, so this week's observation will turn to BTC's risk factor. After the market's rapid correction last week, with the current small rebound in the market, the risk factor is close to the red area again. Combined with other indicators, the market may still tend to fluctuate or slightly correct.

（Figure below: Option intention transaction ratio）

Option trading volume has risen sharply, and the proportion of put options is in the middle.

（Figure below: Derivatives trading volume）

Derivatives trading volume fell back to a low level after the market stabilized.

（The figure below shows the implied volatility of options）

The implied volatility has not changed much at present.
Sentiment rating: neutral

（The figure below shows the profit and loss transfer volume）

With the end of the correction, panic sentiment (orange line) has continued to decline, but positive sentiment (blue line) has not continued to increase with the rebound of prices, so overall market sentiment has changed from "negative and bearish" last week to "neutral".

Whether the market can rebound higher in the future still needs to further observe whether positive sentiment will rebound. If not, it will tend to fluctuate.

（The figure below shows the 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 has a medium outflow.

(The net position of Bingtangcheng Exchange in the figure below)

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

(The net position of Etai Exchange in the figure below)

ETH exchange net position is in a medium outflow state.

(The high-weight selling pressure in the figure below)

There is no high-weight selling pressure at present.
Purchasing power rating: Global purchasing power has recovered slightly, and stablecoin purchasing power has recovered significantly.

（Global purchasing power status in the figure below）

The purchasing power in America has turned from loss to a small recovery, but the recovery is weak at present.

（USDC exchange net position in the figure below）

USDC exchange net position has recovered significantly.

Off-chain transaction data rating: There is a willingness to buy at 54,000; there is a willingness to sell at 64,000.

（The following figure shows the off-chain data of Coinbase）

There is a willingness to buy at prices around 52,000 and 54,000;
There is a willingness to sell at prices around 65,000 and 68,000.

（The following figure shows the off-chain data of Binance）

There is a willingness to buy at prices around 54,000~56,000;
There is a willingness to sell at prices around 64,000~66,000.

（The following figure shows the off-chain data of Bitfinex）

There is a willingness to sell at prices around 67,000.

Summary of this week:

Summary of news:

1. From the recent negative events: US recession hype, Mtgox, Genesis compensation sale, German and US sales, Japanese interest rate hikes and US stock sell-offs, it seems that they have slowly passed.

2. Now considering only the Fed’s rate hike/rate cut cycle, the Fed is likely to cut interest rates in September. After the rate cut, the monetary policy will be loose and flooded with money, which is good for the market. The correction may end or the market may have reached the bottom.

3. The negatives that need to be paid attention to in the short and medium term are "The New York court finally approved the bankrupt cryptocurrency trading platform FTX to pay $12.7 billion to creditors. The media previously reported that it was a cash compensation. In general, since the sharp interest rate hike in 2022, the US stock market has repeatedly threatened the Federal Reserve, including the bankruptcy of community banks in early 2023, the US stock market waterfall in September 2023, and the US stock market waterfall again in August 2024. It is not new. During this period, the Federal Reserve has stopped raising interest rates and reduced the scale of balance sheet reduction. The Nasdaq index has also quietly risen from 10,000 points to around 16,000 points, and the cryptocurrencies have fluctuated violently. The cryptocurrencies have expanded in volatility every time they have a callback, and they will also expand every time they rise, waiting for the Fed's water release cycle to come.

Long-term insights on the chain:

1. The purchasing power of the US market is recovering, although not strongly;
2. The cost of short-term investors is now around 64,500, pay attention to the selling effect of the return on investment generated by the pressure around this area;
3. The mysterious giant whales that have never flowed have begun to increase their purchases and continue to support the market.

• Market tone:
Gradually warming up.

On-chain mid-term exploration:

1. Long-term participants are increasing, and short-term participants are decreasing;
2. The purchasing power of USDC has been restored to the level before the decline, and it is currently slowing down slightly;
3. The supply of liquidity has slowed down;
4. The accumulation state of the giant whales has decreased;
5. The emotions of the participants in the market have shown signs of recovery;
6. The pressure in the market is gradually easing.

• Market tone:
Slowing down
The current pressure is gradually easing, and at the same time, the pace of participants in the market will be slower.

On-chain short-term observation:

1. The risk factor is close to the red zone, and the risk of derivatives is increasing.
2. The number of newly added active addresses is relatively low.
3. Market sentiment rating: neutral.
4. The overall net position of the exchange shows that BTC inflows are accumulated, and ETH outflows are moderate.
5. Global purchasing power has recovered slightly, and stablecoin purchasing power has recovered significantly.
6. Off-chain transaction data shows that there is a willingness to buy at 54,000; there is a willingness to sell at 64,000.
7. The probability of not falling below 54,000~57,000 in the short term is 70%; among them, the probability of not rising below 64,000~67,000 in the short term is 74%.

• Market tone:
The overall market sentiment is currently neutral. After the sharp correction last week, market sentiment has eased, and purchasing power has rebounded slightly overall. This week, it is expected that if market purchasing power and positive sentiment have not rebounded significantly, and taking into account potential off-market factors (jump wallets or other wallets), the market may rebound to a limited extent and tend to fluctuate within a range.

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

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia