Original title: "What kind of undercurrent is the peaceful and calm market experiencing? | WTR 10.14"
Original source: WTR Research Institute

Review of this week

This week from October 7 to October 14, the highest price of Bingtang Orange was around $64478, and the lowest price was close to $58946, with an oscillation amplitude of about 8.58%. Observing the chip distribution map, there are a large number of chips traded around 62000, which will have a certain support or pressure.

• Analysis:
1. 59000-63000 is about 2.2 million pieces;
2. 64000-68000 is about 880,000 pieces;
• The probability of not falling below 53000~57000 in the short term is 70%;
• The probability of not rising above 71000～74000 in the short term is 92%.

Important news

Economic news

1. The overall CPI annual rate in September was 2.4%, 2.3% higher than expected and 2.5% lower than the previous value.

2. The core CP1 annual rate in September was 3.3%, higher than the expected value of 3.2% and higher than the previous value of 3.2%.

3. The number of initial jobless claims in the week was 258,000, higher than the expected value of 230,000 and higher than the previous value of 225,000.

4. The number of initial jobless claims in the United States was 258,000, a one-year high and a new high since the week of August 5, 2023.

5. Traders increased their bets on a 25 basis point rate cut by the Federal Reserve in November, and the Federal Reserve is expected to cut interest rates further in the future. This set of data will also be the last set of CPI data before the election on November 5.

6. Fed's Gursbee said: Fed forecasts show that the vast majority of people believe that in the next 12 to 18 months, economic conditions will continue to improve and interest rates will gradually and significantly decline; the job market has cooled to full employment; the overall trend is obviously that inflation has fallen significantly.

7. Analyst Michael Brown said that the September CPl data is unlikely to substantially change the Fed's policy outlook. It is expected that the remaining two interest rate meetings this year will each cut interest rates by 25 basis points. The pace of interest rate cuts may continue until 2025, until it returns to a neutral level of around 3% next summer.

8. JPMorgan analyst David Kelly: There is no endogenous factor that will make the economy hotter or colder. The economy is "very good". From the perspective of the Federal Reserve, given that interest rates are still too high, they may tend to gradually lower interest rates to normal levels.

Crypto Ecosystem News

1. Thelnformation reported that Fidelity plans to launch a money market fund that will be traded on the blockchain for the first time. Fidelity submitted relevant documents to the US securities regulator on September 26. By launching this fund, Fidelity will compete with the world's largest asset management company, Bridgewater, which has a similar fund.

2. Metaplanet increased its holdings by 108.99 BTC and currently holds 748.502 BTC.

3. MtGox will extend the repayment deadline to creditors by one year to October 31, 2025.

4. Greekslive said: The current option holdings have fallen to a new low since 2023. This week, block trades accounted for a large proportion, and 40% of the cumulative trading volume came from block trades, especially block call option trades. There may be market conditions before and after the US election.

5. Bloomberg reported that the "Global Crypto Hedge Fund Report" released by PricewaterhouseCoopers (PwC) and the Alternative Investment Management Association (AIMA) showed that 47% of hedge funds in traditional markets have been involved in digital assets, higher than 29% in 2023 and 37% in 2022.

Long-term insights: used to observe our long-term situation; bull market/bear market/structural changes/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 insights

• Derivative signals
• Long-term holder chip structure
• Illiquidity whale positions
• Large net positions on exchanges

(Figure below) Derivatives Signals)

The figure shows the recent derivatives trend signals, which are mainly calculated based on the short squeeze mechanism of the derivatives market. Red generally represents short squeeze. If it returns to the yellow range many times, it may mean that the short squeeze is over. There are initial signs of short squeeze in the market.

（The figure below shows the chip structure of long-term holders）

The chip structure of long-term holders has fallen into growth stagnation and there are some signs of slowing trend.

（The figure below shows the head of illiquid whales）

Non-liquidity whales still maintain a relatively increased holding state. This proves that they are still relatively optimistic about the long-term trend of the market.

（The following figure shows the large net positions of exchanges）

The large net positions of exchanges in the market show that there is no selling pressure at present. From the perspective of selling pressure, the market is relatively healthy. In general, the market accumulation is stable and the selling pressure is relatively small.

Mid-term exploration

• Structural analysis model for each price level
• Incremental model
• Liquidity supply
• Whale comprehensive score model
• USDC comprehensive score

(Figure below: Structural analysis model for each price level)

According to the structural model, the current short-term cost is concentrated around 62,500, and participants who have entered the market in the near future are concentrated around this area to participate in the game. There may be more intense competition for the chips around this area.

(Figure below: Incremental model)

The incremental model shows that the supply of short-term participants has increased. There may be a certain proportion of new entrants in the current market.

（Figure below: Liquidity supply）

Liquidity has increased to a certain extent, and the exchange of chips in the market may be smoother, and the market will gradually improve.

（Figure below: Whale comprehensive score model）

Whales have performed well, and they are gradually accumulating chips recently.
The weight of the whale group may be higher in the current market.

（Figure below: USDC purchasing power comprehensive score）

USDC users are less active, and the current market may lack the participation of USDC users.

Short-term observation

• Derivatives risk coefficient
• 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 has entered the red area, and the risk has increased.

(The following figure shows the derivatives risk factor)

Although the risk factor has entered the red area, it may continue to fluctuate near the short-term holder cost line in the short term, but combined with the chip chart, the short-term holder cost line has been rapidly accumulating chips recently, so the expected impact of derivatives on the market this week is limited.

(The following figure shows the option intention transaction ratio)

The option transaction volume has dropped significantly, and the put option ratio has dropped slightly.

（Figure below: Derivatives trading volume）

Derivatives trading volume returned to the bottom area.

（Figure below: Option implied volatility）

Implied volatility did not change much.
Sentiment rating: neutral

（Figure below: Profit and loss transfer）

The current level of volatility can no longer cause a sustained panic sell-off of losing chips, but at the same time it can no longer cause positive market sentiment.

（Figure below: New addresses and active addresses）

New and active addresses are at a medium-high level. Spot and selling pressure structure rating: BTC outflows slightly, ETH outflows slightly.

(Net position of Bingtangcheng Exchange in the figure below)

BTC outflows slightly.

(Net position of E-Tai Exchange in the figure below)

BTC outflows slightly.

(High weight selling pressure in the figure below)

No high weight selling pressure at present.

Purchasing power rating: Global purchasing power is lost, and stablecoin purchasing power is lost.

（Below is the global purchasing power status）

Global purchasing power has now lost to negative values.

(USDC exchange net position in the figure below)

USDC exchange net position loss.

Off-chain transaction data rating: Willing to buy at 58,000; Willing to sell at 70,000.

(Coinbase off-chain data in the figure below)

Willing to buy at prices around 58,000; Willing to sell at prices around 66,000 and 70,000.

（Binance off-chain data in the figure below）

There is a willingness to buy at prices around 58,000;
There is a willingness to sell at prices around 66,000 and 70,000.

（Bitfinex off-chain data in the figure below）

There is a willingness to buy at prices around 58,000;
There is a willingness to sell at prices around 66,000 and 70,000.

Summary of this week:

Summary of news:

1. The interest rate cut cycle has not changed, and it is expected that continued interest rate cuts in November will stimulate the capital market.
2. FTX chooses to compensate creditors in cash.
3. From a macro perspective, the fourth quarter is relatively optimistic.

Long-term insights on the chain:

1. Derivatives initially show signs of short squeeze;
2. The growth of long-term holders has stagnated;
3. Illiquid whales are still increasing their holdings;
4. The selling pressure from large exchanges has been relatively small recently.

• Market tone:
The market is slowly accumulating and the selling pressure is not high.

On-chain mid-term exploration:

1. 62500 is the short-term cost line, which may be an important support and turnover position;
2. There are new entrants in the market;
3. The liquidity in the market is currently in good condition;
4. The giant whales have accumulated a lot of chips recently;
5. There is currently a lack of participation from USDC users in the US market.

• Market tone:
Accumulation
The market is in good condition, and the participation of USDC users in the US market may still be needed.

On-chain short-term observation:

1. The risk factor has entered the red area, and the risk has increased.
2. The number of newly added active addresses is relatively high.
3. Market sentiment rating: neutral.
4. The net position of the exchange as a whole shows a small outflow of BTC and a small outflow of ETH.
5. Global purchasing power is lost, and stablecoin purchasing power is lost.
6. Off-chain transaction data shows that there is a willingness to buy at 58,000; there is a willingness to sell at 70,000.
7. The probability of not falling below 53,000~57,000 in the short term is 70%; the probability of not rising below 71,000~74,000 in the short term is 92%.

• Market tone:
The short-term market's positive sentiment and purchasing power continue to lose, and it may still fluctuate around the short-term holder's cost line or retrace slightly. However, chips have been rapidly accumulating around 62K in the past three weeks, and it is recommended to pay attention to the medium- and long-term trends.

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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