On-chain data for the 38th week: The Federal Reserve continues to send dovish signals. When will the real large capital inflows come?

Review of this week

This week, from September 23 to September 30, the highest price of Sugar Orange was around $66498 and the lowest was close to $62538, with a fluctuation range of about 6.33%

Observing the chip distribution chart, a large number of chips were traded around 62000, which will have certain support or pressure.

•Analysis:

1.59000-63000 is about 1.76 million pieces;
2.64000-68000 is about 1.02 million 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 annual rate of the PCE price index in August was 2.2%, 2.3% lower than expected and 2.50% lower than the previous value.
2. The annual rate of the core PCE price index in August was 2.7%, in line with the expected value of 2.70% and higher than the previous value of 2.60%.
3. The final value of the expected inflation rate in September was 2.7%, the previous value was 2.7%.
4. The latest inflation data showed that the monthly rate of the core PCE price index in the United States in August was 0.1%, the lowest since May, and the market expected it to be 0.2%;
5. The monthly rate of personal spending in August was 0.2%, the lowest since April, and the market expected it to be 0.30%.
6. Powell once said, "The upside risk of inflation has indeed declined, and the downside risk of employment has increased;
7. Fed Governor Waller estimated that the core PCE annualized rate in the past four months will be less than 1.8%, which is lower than the Fed's 2% target.
8. Economist Stephanie Roth said: If the US unemployment rate rises to 4.3% (currently 4.2%), the Fed may choose a larger interest rate cut. The basic expectation is that the Fed will at least cut to 3% (even before the end of 2025).
9. Hedge fund legend David Tepper: The Fed must cut interest rates at least two or three more times to maintain its credibility.
10. Goldman Sachs' chief financial officer said that a large interest rate cut is a clear sign of a new direction, and a soft landing seems to be a consensus. A 50 basis point interest rate cut is seen as an important turning point in monetary policy, bringing a new wave of optimism to the economic trajectory.

Crypto Ecological News

1.Keyrock Research shows that 88% of the tokens airdropped during the coin issuance this year have seen a drop in price, most of which will plummet within 15 days. Three months later, few tokens have been able to produce positive results, and only a few tokens have been able to buck the trend. Projects with excessively high FDV (fully diluted market value) usually find it difficult to maintain momentum because the expected upside becomes limited.

2. Lookonchain said that ETH destruction increased by 163% month-on-month in the past week. Before the ETH price rose in January and October 2023, there was a surge in daily ETH destruction.

3. 10x Research analyzed that if the $65,000 level is broken, it will mean a reversal of the downward trend, and a new high may be set in the fourth quarter. The medium-term reversal indicator has now been fully corrected, indicating that the downward trend may have ended.

4. According to Lookonchain data, BlackRock has increased its holdings by 4,460 BTC in the past two days, and its total holdings have reached 362,192 BTC, worth about $229 US$1 billion.

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 some directions and certain events under certain conditions

Long-term insight
•High-quality selling pressure
•Short-term participant cost
•U.S. market purchasing power
•Phase-specific inventory top

(Figure below: High-quality selling pressure)

From the performance of high-weight participants, they did not have much selling.

This eliminates a major hidden danger for the market.

(Short-term participant cost in the following figure)

The short-term participant cost is rising, gradually approaching 63,000, and the price may be a psychological rivet range. From the perspective of behavioral finance, it may be a stage support.

(U.S. purchasing power in the following figure)

The U.S. purchasing power has begun to rejuvenate, which means that participants in the U.S. time zone have made a significant shift in their purchases compared to the previous few weeks, and have made larger purchases in the past week.

(The following figure shows the top of the stage inventory)

The stage inventory top shows that the price is about 70,000; this means that at this price, long-term participants may be willing or may sell, but it is not the top of the long cycle, it may be a stage.

So you need to pay attention to risks and market pressure around this.

Mid-term exploration        
•Short-term profit percentage compound model
•Giant whale comprehensive score model
•Stablecoin supply net position
•Total spot selling pressure on the chain

(Short-term profit percentage compound model in the figure below)

Green area: short-term high ratio profit area

Red area: short-term high ratio loss area

Blue line: accumulation coefficient

Yellow line: short-term supply

This model explores the short-term profit ratio from the perspective of supply.

It is not at the extreme point at present, and there may be high selling pressure on short-term chips, or active supply has not appeared.

The short-term supply and accumulation coefficient in the market are somewhat stagnant, but they are still in an upward trend.

The market may face a certain degree of suspension or adjustment.

(The following figure shows the comprehensive score model of the giant whale)

There are some signs that the giant whale has slowed down its entry rhythm.

(The following figure shows the net position of stablecoin supply)

The current stablecoin supply is still rising, and the market may tend to accumulate or accumulate power.

With the continued increase in purchasing power, there may be no decline in capital sentiment in the market.

(Total spot selling pressure on the chain in the figure below)

The chain did not generate excessive selling pressure during this rise.

The signs of large-scale buying and selling that may be close to those in January-March 2024 have not appeared.

Currently, participants may be more cautious and patient.

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
•Yita exchange net position
•High-weight selling pressure
•Global purchasing power status
•Stablecoin exchange net position
•Off-chain exchange data

Derivatives rating: The risk factor enters the red area, and the risk increases.

(The following figure shows the derivatives risk factor)

This week is basically the same as last week. After the short squeeze, the risk factor returned to the red area again. Judging from the risk factor alone, BTC may continue to the next market after consolidating at the current price, which is also the cost line of short-term holders.

(Figure below: Option intention transaction ratio)

Option transaction volume decreased slightly, and the proportion of put options increased slightly.

(Figure below: Derivative transaction volume)

Derivatives trading volume returned to the bottom area after the market squeeze.

(The figure below shows the implied volatility of options)

The implied volatility did not change much.

Sentiment rating: neutral to bullish

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

This week's market sentiment is basically the same as last week. While the market is squeezed, the positive sentiment (blue line) of the market has reached a short-term extreme, and the panic sentiment (orange line) has not been sold due to unwinding.

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

The new and active addresses are at a medium-to-high level.

Spot and selling pressure structure rating: BTC has a medium outflow, ETH has a medium inflow accumulation.

(The following figure shows the net position of Bingtangcheng Exchange)

BTC has a medium outflow.

(The following figure shows the net position of E-Tai Exchange)

ETH has a medium inflow accumulation.

(The following figure shows high-weight selling pressure)

There is no high-weight selling pressure at present.

Purchasing power rating: Global purchasing power has slightly recovered, and stablecoin purchasing power has slightly recovered.

(Global Purchasing Power Status in the Figure Below)

The purchasing power in America has ended its loss and continued to recover slightly this week.

(USDC Exchange Net Position in the Figure Below)

USDC Exchange Net Position Recovered Slightly.

Off-chain Transaction Data Rating: Willing to Buy at 60,000; Willing to Sell at 70,000.

(Coinbase Off-chain Data in the Figure Below)

Willing to Buy at Prices Near 60,000; Willing to Sell at Prices Near 70,000.

(Binance off-chain data in the figure below)

There is a willingness to sell at a price around 70,000.

(Bitfinex off-chain data in the figure below)

There is a willingness to sell at a price around 70,000.

Summary of this week:

WTR public real-time trading section:

Starting from February 2024, the real-time trading status of funds will be regularly disclosed every month.

Strategy: stable strategy.

Initial capital amount: 240,000 US dollars.

Current capital: 258,000 US dollars.

Rate of return: 7.5%

Drawdown of a new account of 120,000 US dollars opened in July: 2%.

Total capital: 431,000 US dollars.

News summary:

1. Since last Thursday night, the Fed members have spoken in groups, and the market has been pricing in the extent of this year's interest rate cuts. The dovish signals have further paved the way for the Fed to cut interest rates.
2. The biggest impact of the interest rate cut on the market is the reserves of money funds. Shaking the reserves of money funds and flowing from the original pool to the pool of other risky assets will be real money. The spring of risky assets has arrived.
3. Usually, bulls and bears come from market confidence. When market confidence is insufficient, it often cannot fall. The current market confidence comes from the continuous interest rate cuts of the Fed.
4. From the overall attitude, Wall Street and the Fed are very eager to implement continuous interest rate cuts as soon as possible. There will be a large space for interest rate cuts from the end of this year to next year, which may be a little larger than expected.
5. Fundamentally speaking, the interest rate given by the Fed is not enough to shake the money fund market. When the interest rate cuts continue to accelerate, it will shake the money fund market, and there will be a second round of large funds flowing in.

Long-term insights on the chain:

1. The high-weight selling pressure has not changed much, but is still decreasing, eliminating a major hidden danger in the market;
2. The cost of short-term holders shows that the price has gradually climbed to around 63,000, which may be a psychological rivet support for the market;
3. The purchasing power of the US market has changed significantly this week, resulting in a large number of positive premium effects;
4. The top of the medium- and short-term inventory is probably around 70,000, and pay attention to the risks and variables of the price around this.
• Market tone:

The market is recovering.

Medium-term exploration on the chain:
1. The buyer group is slightly stagnant;
2. The giant whale slows down;
3. Purchasing power is still accumulating strength;
4. The pressure on the chain is low, and there is no sign of large-scale transactions.
•Market Setting Tone:

Suspended

The current market may slow down, but the market is still accumulating strength.

On-chain short-term observation:
1. The risk factor is near the red zone, and the risk is increasing.
2. The number of newly added active addresses is relatively high.
3. Market sentiment rating: neutral to bullish.
4. The net position of the exchange as a whole shows a medium outflow of BTC and a medium inflow of ETH.
5. Global purchasing power is in a state of slight recovery, and the purchasing power of stablecoins has recovered slightly.
6. Off-chain transaction data shows that there is a willingness to buy at 60,000; 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%; among them, the probability of not rising below 71,000~74,000 in the short term is 92%.

•Market tone:

The overall market sentiment continues to recover slightly, and purchasing power is also recovering slightly. Even if the short-term market adjusts, it is difficult to fall below the short-term holder cost line (63K). The overall market is neutral and bullish. The next market may need an opportunity.

Risk warning:

The above are market discussions and explorations, and do not have directional opinions on investment; please be cautious and prevent market black swan risks.

This report is provided by the "WTR" Research Institute.