Falling fluff silently, trickle of clear dew | WTR 10.02

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This report is provided by the “WTR” Research Institute.

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Golden Egg Diary @jindanriji ; Elk Will Not Get Lost @crypto_elk_ ; Forex Brother; Xibei @Asterismone ;

Review this week

This week, from September 25th to October 2nd, the highest near 28,430 dollars of rock sugar orange, the lowest close to 25,990 dollars, the oscillation range reached about 9.39%.

Observing the chip distribution chart, there are a large number of chip transactions around 26770, which will provide some support or pressure.

• Analysis:

1. 26000–31000 about 4.16 million pieces;
2. 20,000 to 25,000 about 1.80 million;

• The probability of not breaking through in the short term is 79% between 24,000 and 26,000.
• The probability of not breaking through 32,000 to 34,000 in the short term is 65%.

Important news aspect

Economic news

1. Former Goldman Sachs CEO Lloyd Blankfein said: The 5.5% interest rate is too high, the account rate may be within 3%, the Fed will cut interest rates earlier than expected, and a recession is unlikely.
2. Goldman Sachs believes that the Fed will only cut interest rates by 25 basis points next year, US Bank believes that 50–75 basis points; JPMorgan Chase believes that it will cut interest rates by 80 basis points; Morgan Stanley believes that 100 basis points.
3. Interest rate futures contracts show about a 50% chance that the Fed will tighten further for the rest of the year, with interest rates falling to 4.65% by the end of next year, a cut of 85 basis points .
4. Citigroup said that the financing market liquidity depletion has basically ended, and the Fed’s reverse repurchase (RRP) tool will offset or even exceed the size of the US Treasury’s bond issuance, thereby increasing liquidity.
5. The use of the Fed’s reverse repo facility has fallen to $1.428 quadrillion and is expected to drop to around $1 trillion by the end of the year, injecting liquidity into the market.

In terms of encrypted ecosystem messages

1. The weekly trading volume of the top exchanges fell below $400 billion again last week
2. MicroStrategy buys 5,445 BTC for $147 million
3. Binance Japan partners with Mitsubishi UFJ Trust Bank to publish Japanese yen stablecoin by end of 2024
4. Binance sells its Russia operations to CommEX
5. Global payment processing giant MoneyGram will launch a non-custodial encrypted wallet
6. US SEC delays VanEck and Ark 21Shares spot Ethereum ETF resolution time, but will accelerate the launch of Ethereum futures ETF
7. Crypto trading platform Kraken plans to offer stock trading services in the UK and the US
8. Bernstein, a veteran asset manager on Wall Street, reported that in the BTC spot ETF , the US Securities and Exchange Commission ( SEC ) will not “fabricate another reason for refusal”, but will take a middle way and accept the supervision agreement with Coinbase.
9. The Federal Reserve released a report titled “Tokenization: Overview and Financial Stability Implications”, which aims to provide background knowledge on tokenization and discuss its potential benefits as well as financial stability risks.

Long-term insight: 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; and the likelihood of certain directions and events occurring under certain conditions

Long-term insight

• Spot selling pressure on chain
• Exchange position status

(Below, on-chain spot selling pressure)

Spot selling pressure reached its lowest point in eight years.

At present, the selling pressure of spot goods is almost negligible, and it has reached the lowest stage in history. The market pressure is the easiest in eight years.

Easy enough to squeeze the market upward with just a little purchasing power.

(Figure below, exchange position status)

Participants are still actively hoarding coins, but the corresponding frequency and amount of hoarding coins have begun to decrease.

The existing coin volume of the exchange is also at its lowest level in several years.

Active hoarding behavior has occurred in the past two months.

The current market has reached the lowest freezing point in eight years of selling pressure, and buying and hoarding coins are still quietly advancing.

If the market remains like this, it may experience an upward squeeze in the next 1–2 quarters.

Mid-term exploration

• Short-term profit percentage composite model
• Proportion of long-term and short-term participants
• Exchange futures leverage as a percentage
• Exchange Trend Net Position
• Online emotional positivity
• Purchasing power differential

(Figure below, short-term profit percentage composite model)

From the medium-term state, short-term participants are in a relatively hovering position, and the direction of increase and decrease is not very clear, but overall, the rhythm of reducing holdings has temporarily stopped at this stage.

The accumulative group is still growing, and the pace of hoarding coins remains unchanged. The medium and long-term fundamentals are still relatively positive.

However, the growth rate has slowed down, and the overall pace may also be adjusting. The market as a whole needs time to replace more space.

Therefore, the problem of liquidity loss in the short term has been temporarily alleviated.

(Figure below, ratio of long-term and short-term participants)

From the perspective of the proportion of participants,

The proportion of participants holding for 6 months to 2 years is currently greater than that of participants holding for 1–3 months.

Perhaps the overall tone has returned to a relatively conservative level, with the proportion of longer-term participants increasing, accompanied by the loss of short-term participants.

Of course, the reaction to the field needs to take into account the selling pressure situation.

Take a deep look at the position changes of the exchange balance on the exchange.

(Figure below, exchange trend net position)

In the trend net position, the current situation is still in a relatively weak accumulation state.

It may still be in a slow-paced accumulation state overall.

(Figure below, online emotional positivity)

On-chain active levels are still growing at a slower rate, and a relative medium-term trend may be forming.

If the current trend does not encounter significant selling pressure in the medium term or rapid selling pressure under weakened liquidity, the secondary market may perform well in the next 1–2 months.

(Figure below, purchasing power difference)

Purchasing power has weakened slightly, which may have some impact in the near future.

Comprehensive chain positivity, the current may be a relative weakening of the buyer’s power, but the overall still has a certain level of activity.

Short-term observation

• Risk factor of derivatives
• Option intention-to-trade ratio
• Derivatives trading volume
• Implied volatility of options
• Profit-loss transfer
• Add addresses and active addresses
• Bingtang Orange Exchange Net Position
• Net position of the Aunt Exchange
• High weight selling pressure
• Global purchasing power status
• Stablecoin exchange net position
• Off-chain exchange data

Derivatives rating: risk factor in danger zone, increased risk

(Figure below, risk coefficient of derivatives)

While prices have risen, the risk factor has also fallen back to the danger zone.

Although the risk coefficient alone may limit the space for the current price to continue to rise, even if the risk of derivatives increases, it may still cause the price to continue to break through and form a large-scale short roll because there is currently no large-scale short roll.

(Figure below, option intention-to-trade ratio)

The trading volume of options has decreased significantly, and the proportion of put options has decreased moderately compared with last week. It is currently at a median level.

(Figure below, derivatives trading volume)

Although prices have risen, the current trading volume of derivatives remains at a low level without much fluctuation, indicating that derivatives traders are currently in a wait-and-see state.

(Figure below, implied volatility of options)

Options implied volatility increased slightly and options traders active levels increased slightly.

Emotional state rating: neutral

(Figure below, profit and loss transfer amount)

In the past few weeks, market sentiment has been in a neutral and cool state. The positive sentiment in the market this week has slightly increased with the rise in prices, and panic is still at a low level.

The current price has reached the cost range for short-term holders. This week, we are still concerned about the market panic represented by loss transfer volume.

(Figure below, add address and active address)

There has been a significant decrease in new addresses this week, and a small decrease in active addresses.

Spot and selling pressure structure rating: Overall, it shows a cumulative outflow state, with low selling pressure.

(Below, the net position of the Bingtang Orange Exchange)

The pancake is currently in a small amount of outflow.

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

E is currently in a trace inflow state.

(Figure below, high weight selling pressure)

There is currently no high weight selling pressure.

Purchasing power rating: Global purchasing power rebounded slightly, while stable currency purchasing power rebounded slightly.

(Figure below, global purchasing power status)

The purchasing power of all three continents has rebounded, with Asia experiencing the largest increase in purchasing power.

(Net position of USDC exchange in the figure below)

USDC is currently in a small inflow state.

(Net position of USDT exchange in the figure below)

USDT is currently in a small inflow state.

Off-chain transaction data rating: There is a willingness to buy at 26,000; there is a willingness to sell at 30,000.

(Coinbase off-chain data in the figure below)

There is a willingness to purchase at prices around 23,000, 24,000, and 25,000.

There is a willingness to sell at prices around 30000, 31000, and 32000.

(Binance off-chain data in the figure below)

There is a willingness to purchase at prices around 24,000, 25,000, and 26,000.

There is a willingness to sell at prices around 28000, 29000, 30000, and 31000.

(Bitfinex off-chain data in the figure below)

There is a willingness to purchase at prices around 24000 or 25000.

There is a willingness to sell near the price of 30500.

This week’s summary:

News summary:

1. The crypto fund management industry is currently around $450- $50 billion in size and has the ability to exceed $500 billion in five years with ETF approvals, capital expected hype, and more. These demands will come from investment advisors, wealth and private banking products, and the ability to easily access BTCETFs in direct brokerage accounts.
2. It will indirectly cause two to three times the leverage amplification effect, that is, the inflow space for the current market value to expand 2–3 times.
3. In terms of encryption policies, reports released by European and American countries, such as the Federal Reserve, are actively building and paving the way for a policy environment for encryption.

Technology side:

The tide of the times has also come, as technology companies led by Open Ai are pushing the industry forward.

In a century, few individuals or corporate organizations can directly promote the development of industries and times, which is quite a great feat.

With the canary release test of the latest GPT4 small v visual version, it has been revealed that it will be trained in 2022. We can expect the MultiModal Machine Learning support of GPT5 (perhaps other names) in the next year.

It may change the auxiliary creation in other fields such as education, engineering, sports rehabilitation, design and painting.

At the same time, within a year, Apple’s AR will also be released, and the encrypted ETF may be likely to be passed.

If WEB3 changes the world’s new financial order and organizational form, then AI and AR change the world’s new generation and interaction patterns.

The prototype of all of this will come in the next 1–5 years.

At the same time, on the financial and economic side, with the Fed’s interest rate cuts in the next two years, the ten-year US Treasury bond yield will turn and fall, and the anchor of asset pricing will also change.

The market style will face a new transformation.

You have your own plans, and the world has other plans.

The future may witness the birth of a new era and the birth of a new history.

Long-term insights on the chain:

1. The selling pressure of spot goods in the market has reached its lowest point in 8 years.
2. The behavior of hoarding coins and potential purchasing power has been quietly advancing in the past two months.

• Market setting:

The current selling pressure in the market is very low, and only a very small amount of buying is needed to squeeze the market up.

Mid-term exploration on the chain:

1. Short-term participants have entered a stage of hesitation (non-loss), and the pressure on short-term liquidity may temporarily ease.
2. The current pace has slowed down, and the proportion of longer-term participants has increased relative to the short-term.
3. The field is still in a state of weak accumulation.
4. The active level on the chain is slowly increasing.
5. Purchasing power is relatively weakened.

• Market setting:

Slowly

In the medium term, the active level of the chain has increased, but the pace is slower, and the purchasing power needs to be repaired.

At the same time, if there is no more urgent selling pressure, there may be a trend in the next 1–2 months.

Short-term observation on the chain:

1. The risk factor is in the danger zone, and the risk increases.
2. The newly added active addresses are at the median level, and the active level on the chain is average.
3. Market sentiment rating: neutral.
4. The net position of the exchange shows an overall accumulation of outflows, with low selling pressure.
5. Global purchasing power has slightly rebounded, while the purchasing power of stablecoins has slightly rebounded.
6. Off-chain transaction data shows that there is a willingness to buy at the price of 26,000; there is a willingness to sell at the price of 30,000.
7. The probability of falling below 24,000–26,000 in the short term is 79%. The probability that it will not break through 32,000 to 34,000 in the short term is 65%.

• Market setting:

The market sentiment is neutral, a change from the previous cool tone. Short-term market positive sentiment has slightly increased.

Strategy suggestion: Spot dynamics hedging after waiting for further price increases

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 report is provided by the “WTR” Research Institute.

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