Original title: "The most difficult bull market in history? Where should the new environment go? | WTR 9.02"
Original source: WTR Research Institute

Review of this week

This week from August 26 to September 2, the highest price of Bingtang Orange was around $65,000 and the lowest price was close to $57,201, with a fluctuation range of about 12%.

Observing the chip distribution chart, there are a large number of chips traded around 59,000, which will have a certain support or pressure.

• Analysis:
1. 59000-63000 is about 1.56 million pieces;
2. 64000-68000 is about 970,000 pieces;
• The probability of not falling below 53000~57000 in the short term is 70%;
• The probability of not rising below 71000～74000 in the short term is 92%.

Important news

Economic news

1. Analysts said that if the Jackson Hole meeting basically confirmed that the Federal Reserve was ready to cut interest rates in September, then Friday's inflation data consolidated the scenario of a 25 basis point rate cut instead of a 50 basis point rate cut.

2. On August 29, EY-Parthenon economists Gregory Daco and Lydia Boussour said, "Powell seems more dovish than his peers."

3. Nevertheless, unless there is a substantial deterioration in the labor market in the coming weeks, we still expect most policymakers to favor a 25 basis point rate cut in September." (Golden Ten)

4. The number of initial jobless claims in the United States for the week ending August 24 was 231,000, as expected, and the previous value was revised from 232,000 to 233,000. (Gold Ten)

5. The Fed is about to cut interest rates. The CFTC weekly position report shows that speculative traders have shorted the US dollar for the first time since February;

6. The U.S. Commodity Futures Trading Commission (CFTC): In the week of August 27, speculators' net long positions in COMEX gold increased by 69 contracts to 236,818 contracts, a four-year high.

7. According to the pricing of the interest rate futures market, the current market expects the Fed to cut interest rates four times this year, totaling 100bp, of which September, November and December are all expected to cut interest rates by about 33bp. The cumulative interest rate cut in the next year will be 200bp, which means that there will be another 100bp cut in the first three quarters of next year.

Crypto Ecosystem News

1. According to Farside Investors data, the U.S. Ethereum spot ETF had a cumulative net outflow of $12.4 million this week, of which Grayscale ETHE had the largest net outflow;

2. The U.S. Bitcoin spot ETF had a cumulative net outflow of $277.2 million this week, of which BlackRock IBIT had the largest net inflow, with a net inflow of $210.6 million during the week; ARKB had the largest net outflow;

3. According to CoinDesk, Russia will begin trialing cross-border encrypted payments next week to circumvent international sanctions;

4. According to Trader T data, the overall net outflow of U.S. Bitcoin spot ETFs in August was $83 million (the price of Bitcoin fell from $64,600 to $59,300). 5. The Ethereum Foundation announced a list of funded projects and community activities in the second quarter of 2024, with a total of over 8.47 million US dollars. In terms of community and education, it supported global conferences and hackathons such as ETH Beijing, ETH Tokyo, and ETHWarsaw.

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 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 under certain conditions

Long-term insight

• Long-term participants' holding structure
• High-weight selling pressure
• American purchasing power

(Long-term participants' holding structure in the figure below)

The holding structure of long-term participants began to recover, proving that they are optimistic about the future market.
At the same time, there is no selling pressure from long-term participants in the market, and the buying demand of long-term participants has begun to recover.

（Figure below: High-weight selling pressure）

The market's high-weight selling pressure has reached a new low this year. Compared with the previous one, it appeared once in August 2023 last year, and the second one in December 2022. After that, they all ushered in a huge rise.

（Figure below: Purchasing power in the Americas）

In the medium term, the purchasing power in America has not fully recovered.
Market sentiment is low, and a huge opportunity is needed to stimulate market sentiment.

Medium-term exploration

• 3-6 month holder behavior analysis
• Price structure analysis model
• Incremental model
• Whale comprehensive score
• Network sentiment positivity

(3-6 month holder behavior analysis in the figure below)

From a historical perspective, 3-6 month holders usually show a stage bottom, or close to the bottom, when the loss transfer ratio reaches 3.2% or above. The current ratio has reached 4.8%.

Combined with the holdings of 3-6 month holders, there has been a recent decline, which may also be the problem of chip faults currently faced. The number of entrants has been decreasing in the past six months, and this situation may be slightly alleviated after their conditions are repaired. If you want to explore the deep risk of the market, you may need to observe the accumulated defi liquidation prices since 2021.

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

The current lower limit of the fundamentals may be 47000-54000.
From the perspective of structural analysis, there may still be some room in the market, but the downward momentum may have reached its limit.

（The following figure shows the incremental model）

The supply of stablecoins is constantly increasing, and the potential of the market may still exist.

（Figure below: Whale comprehensive score）

Whales’ increased holdings have risen again, and their recent willingness to buy is high.

（Figure below: Network sentiment positivity）

Network sentiment still needs to be adjusted and repaired, and the recent improvement may slow down.

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: Risk factor enters neutral zone, with moderate risk.

(Figure below: Derivatives risk factor)

Last week's market was weaker than expected. After the derivatives risk factor hit the red zone, the market immediately started to pull back. Now it has reached the neutral zone again, and the market is expected to continue to fluctuate in the short term.

(Figure below: Options intention transaction ratio)

Option trading volume and put option ratio have both dropped slightly.

(Figure below: Derivatives trading volume)

Derivatives trading volume hit the bottom zone again, and the market is brewing the next volatility.

（The figure below shows the implied volatility of options）

The implied volatility has only increased slightly.
Sentimental state rating: neutral

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

The positive sentiment in the market (blue line) has not continued to increase, but the good thing at present is that the panic sentiment (orange line) has continued to decline and has not risen with the market downturn.

（The figure below shows the new addresses and active addresses）

The new and active addresses are at a low level.
Spot and selling pressure structure rating: BTC has a medium outflow and BTC has a medium inflow.

（Figure below: Net position of Bingtangcheng Exchange）

BTC is continuously flowing out, gradually digesting the large amount of chips that flowed in before.

（Figure below: Net position of E-Tai Exchange）

ETH gradually began to flow in some chips waiting to be sold as the market was depressed.

（Figure below: High-weight selling pressure）

There is no high-weight selling pressure at present.

Purchasing power rating: Global purchasing power is in a state of loss, and stablecoin purchasing power is losing a lot.

（Global purchasing power status in the figure below）

America's purchasing power is still in a state of loss.

（USDC exchange net position in the figure below）

USDC exchange net position has lost a lot.

Off-chain transaction data rating: Willing to buy at 56,000; Willing to sell at 60,000.

（Coinbase off-chain data in the figure below）

Willing to buy at prices around 54,000~57,000;
Willing to sell at prices around 65,000~68,000.

（Binance off-chain data in the figure below）

There is a willingness to buy at prices around 54,000~57,000;
There is a willingness to sell at prices around 60,000~66,000.

（Bitfinex off-chain data in the figure below）

There is a willingness to buy at prices around 56,000;

Summary of this week:

Summary of news:

1. The rhythm of the capital market has entered a relatively critical point;
2. There are generally two types of interest rate cuts in the United States, one is a preventive interest rate cut, and the other is an emergency interest rate cut in a crisis.
3. This year's rate cut is a preventive one, and the room for rate cuts is not particularly large. If a black swan or crisis occurs, the room for emergency rate cuts will be larger.

From the perspective of the US capital market, the stock price and performance ratio of US technology companies are relatively good, which is not outrageous. There is a bubble in the market, but it will not be as big as most people speculate. Therefore, the market outlook is still relatively optimistic, but the volatility factor will increase.

Long-term insights on the chain:

1. The position structure of long-term participants shows that the demand for purchases has increased;
2. The selling pressure of high-weight has fallen back to the lowest level this year;
3. There is not much turning point in the purchasing power of America for the time being, and it is still sluggish.

• Market tone:
The pressure on the market has begun to dissipate, and the demand of long-term participants has begun to expand again. As time goes on, the supply and demand imbalance caused by the halving effect will start to produce buying squeeze again, which will become more and more obvious as time goes by. Some opportunities are needed to detonate.

On-chain mid-term exploration:

1. The loss reduction of 3-6 month holders has reached a historically high value;
2. The fundamental lower limit may be 47000-54000;
3. The supply of stablecoins is growing;
4. The willingness of whales to buy is increasing;
5. The recent network sentiment still needs to be repaired.

• Market tone:
Wandering, accumulation
The market pressure limit is released, and it is currently wandering in a confused stage, while also accumulating.

On-chain short-term observation:

1. The risk factor has entered the neutral area, and the risk is moderate.
2. The number of newly added active addresses is relatively low.
3. Market sentiment status rating: neutral.
4. The overall net position of the exchange shows a medium outflow of BTC and a medium inflow of BTC.
5. Global purchasing power is in a state of loss, and stablecoin purchasing power is lost in large quantities.
6. Off-chain transaction data shows that there is a willingness to buy at 56,000; there is a willingness to sell at 60,000.
7. The probability of not falling below 53,000~57,000 in the short term is 70%; among them, the probability of not rising below 71,000~74,000 in the short term is 92%.

• Market tone:
Overall, market sentiment is neutral, and short-term continuous shocks and fluctuations are no longer important. At present, we can continue to pay attention to the short-term holder cost line (near 63K).

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.

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