Original Title: "Cold Thoughts Under the Frenzy: How to Perspective the Cycles and Destiny of the Encryption Wave from On-Chain to Macroeconomic Changes? | WTR 5.26"
Original source: WTR Research Institute
Weekly Review
From May 19 to May 26 this week, the highest price of ice sugar orange was around $111980, and the lowest was close to $102000, with a fluctuation range of about 9.78%. Observing the chip distribution chart, there are a large number of chips traded around 99000, which will provide certain support or pressure.
• Analysis:
60000-68000 approximately 1.22 million pieces;
76000-89000 approximately 1.25 million pieces;
90,000-100,000 approximately 1.43 million coins;
• The probability of not falling below 95000~100000 in the short term is 80%;
Important News
Economic News
1. Core Event: The Repeatedness and Uncertainty of Trump's Tariff Policy
◦ Contents: Trump's EU tariffs have jumped back and forth between "imposing 50%" and "extending the 90-day negotiation window until July 9." The fourth round of tariff talks between Japan and the United States is scheduled to be held on the 30th.
2. Federal Reserve Monetary Policy Expectations and Official Statements
◦ There are differences in interest rate cut expectations:
▪ Goolsbee: Interest rate cuts may still be possible in the next 10-16 months (dovish). ▪ Bostic: Need to wait 3-6 months to observe uncertainty (neutral).
▪ Williams: It's impossible to fully understand in June or July (rather cautious).
▪ Morgan Stanley: The Federal Reserve will not cut interest rates this year, and will begin to cut rates in March 2026 (hawkish stance, significantly different from mainstream market expectations).
◦ Key data: The PCE data on Friday is an important basis for the Federal Reserve's monetary policy.
3. Other Macroeconomic Indicators and Asset Prices
◦ U.S. stock index futures rose (Nasdaq futures up 1.5%, S&P 500 index up 1.2%).
◦ The dollar index fell by 0.1%.
◦ Citigroup raises gold price target to $3500/oz (due to expected tariff escalation).
◦ The U.S. Treasury has stated that the sovereign wealth fund plan is on hold.
Encryption Ecosystem Messaging
1. Bitcoin (BTC) Market Performance and Driving Factors
◦ Coindesk analyst: The historic new high of BTC is mainly driven by institutions, the retail Meme frenzy has subsided, and market sentiment is shifting towards more sustainable behavior, which may pave the way for the long term.
◦ Analyst Eugene Ng Ah Sio: BTC maintains a clear upward trend, if sustained, there is an opportunity in the shanzhai market.
◦ Interpretation:
▪ Institution-led "ongoing narrative": The success of ETF is one of the core driving forces of BTC's current bull market, which is a typical "ongoing narrative."
2. ETF Fund Flows (Core "Ongoing Narrative")
◦ Last week, the inflow of BTC spot ETF in the United States was 2.75 billion dollars, and the inflow of ETH spot ETF was about 250 million dollars (the highest since early February).
◦ The cumulative net inflow of the US BTC spot ETF has reached 44.499 billion USD, setting a new historical high.
◦ Braid IBIT has had no net outflows for 30 consecutive days, with net assets exceeding 71 billion USD.
3. Enterprises and institutions increase BTC holdings (strengthening institutional narrative)
◦ Bitwise Data: By 2025, the BTC purchase volume by companies in the U.S. and other countries has exceeded 3 times the new supply of BTC.
◦ Semler Scientific increased its holdings by 455 BTC.
◦ Strategy increased holdings by 4020 BTC last week.
4. Regulatory Dynamics and Industry Conferences (Key Variables Affecting the "Expected Narrative")
◦ SEC's Hester Peirce supports providing clearer guidelines on the jurisdiction of securities laws for activities such as PoS/DPoS, which is seen as positive news for U.S. institutional participation in staking. ◦ The Bitcoin 2025 conference (May 27-29) will feature the White House cryptocurrency and AI director, U.S. Senator, and expected Vice President Pence.
◦ Analysis:
▪ Clarity in regulation "expected narrative": Peirce's statements are very important, as they point to a regulatory environment that may develop towards a clearer and more friendly direction. This is crucial for the long-term healthy development of the industry, especially in emerging areas such as staking.
Long-term insights: used to observe our long-term situation; bull market/bear market/structural changes/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; as well as the possibility of certain directions and certain events occurring under certain premises.
Long-term Insights
• Non-liquid long-term whales
• on-chain spot total selling pressure
• BTC's American ETF
• The holding structure of long-term participants with different durations
• The trading platform's large inflow and outflow net head size
• Short and long-term holder cost line
(The following image shows non-liquid long-term whale )
• Since the end of 2023, there has been a continuous upward trend, indicating that these entities are constantly accumulating.
• The overall trend indicates that long-term holders and whales have strong confidence and continue to withdraw BTC from the liquid market, which constitutes a strong supply-side support. The long-term bullish structure remains unchanged, but the newly added accumulation momentum may weaken marginally in the short term.
(The following image shows the on-chain total selling pressure )
Recently, the market's "total selling pressure" has been on a slightly rising trend. There is a small amount of inflow, but the trading activity is normally rotating, rather than panic selling. From the perspective of "potential selling pressure", there have been no worrying signs of large-scale chips concentrating on trading platforms recently, and the market's willingness to sell is low.
(The following image is BTC's US ETF)
Recently, the inflow of funds into ETFs has indeed shown a significant decline compared to previous peaks, even approaching zero or experiencing slight net outflows on some trading days. Current:
• "The ongoing narrative" faces challenges: The slowdown in ETF fund inflows is a direct test of one of the core driving forces of this bull market.
• The current ETF flow is a key window for observing institutional attitudes and new sources of funding, and its continued weakness will put pressure on market confidence.
• The marginal buying power driven by ETFs is weakening, which is a significant change the current market is facing.
The market needs to look for new demand growth points or wait for ETF demand to recover under new conditions.
(The following image shows the long-term participant holding structure over different years )
The share representing long-term holders over 6 months (green to purple area overlay) has recently recovered slightly to 0.449. Analysis: The increase in the share of long-term holders (often considered "smart money" or investors with strong convictions) and their maintenance at high levels is a sign of a healthy market structure, reducing short-term speculative selling pressure.
• Synergy with Figure 1: This is consistent with the increasing trend of non-liquid supply in Figure 1, together depicting the shift of chips from short-term traders to long-term holders, transitioning from ample liquidity to a supply shortage. The microstructure of the market remains solid, with the "ballast" effect constituted by long-term holders being significant.
(Below image shows the platform's large inflow and outflow net size )
Net outflows representing large transfers (yellow $1-10 million, red over $10 million). Recently, although not as continuous and intense as in certain previous phases, overall net outflows remain the dominant trend, and large-scale net inflows have not occurred. Despite a slowdown in ETF flows, significant funds continue to flow out of trading platforms, indicating that there are still large users or institutions accumulating BTC and self-custodying, or engaging in trades through the OTC market before withdrawing. The potential selling pressure from trading platforms continues to decrease, and the accumulation behavior of large users is still ongoing, although its intensity may fluctuate with market conditions.
(The following image shows the cost line for short-term and long-term holders )
The short-term investor cost line (orange-yellow) is currently at $95,411. The current price (approximately $109,000) is still significantly above this cost line.
• As long as the price remains above the average cost of short-term holders, the risk of large-scale panic selling in the short term is low, as most short-term participants are in a profitable state. Key support level: $95,411 is an important psychological and technical support area. If the price pulls back to this level and gains effective support, it will strengthen market confidence; if it breaks below, it may trigger stop-loss orders, increasing short-term downward pressure.
• The battleground for new capital: This price level is also a key area for new entering capital and short-term capital seeking to take profits.
• The short-term market structure is still healthy, but attention must be paid to the effectiveness of the support at 95,411 dollars.
Overall Analysis:
Base Stone: The supply side continues to tighten, and long-term holders have strong confidence. Although short-term accumulation momentum is marginally slowing down, non-liquid supply continues to increase, and the proportion of long-term holders remains stable at high levels and has slightly rebounded. Large amounts of capital continue to flow out of trading platforms, and large transfers to trading platforms (potential selling pressure) are inactive. Together, these factors constitute a strong supply-side support for the market, distinguishing it as a core characteristic different from previous cycles.
Current Challenges: ETF Driving Force Weakens, Market Faces Demand Test ( Figure 3). The significant decline in ETF capital inflows is the most direct challenge facing the current market. This means that the previously main source of incremental capital is losing momentum, and the market needs a new demand story or the recovery of existing demand to maintain upward momentum.
Short-term market sentiment and key water level ( chart 6). The current price is above the short-term holder cost line ($95,411), providing a "safety cushion" for the market. This price point is a critical watershed for assessing the strength of the short-term market.
The combined effect of macroeconomic uncertainty and narrative vacuum period. Against the backdrop of weakened ETF inflows, macro-level uncertainties (Trump tariffs, Federal Reserve policy fog) may amplify the negative impact on market sentiment. At the same time, as discussed in the following text (news analysis and summary), new "expected narratives" that can significantly attract capital (such as stablecoin channels, substantial regulatory breakthroughs) have not yet formed effective connections, and the market may be in a brief "narrative vacuum period" or "narrative fatigue period."
Pressure under "attention competition". In the context of weakened self-driving force and unclear macro environment, the encryption market (especially assets outside of BTC) may appear more passive in the "attention competition" against stronger narratives such as AI.
Future Outlook :
Short to mid-term :
Main tone: Possible high-level fluctuations, a critical period for direction selection. The market may undergo a period of consolidation within the current price range (for example, with $95,411 as the lower bound and the previous high as the upper bound). The choice of direction will depend on:
Can ETF traffic recover? This is the most important observation indicator.
Can macro news emerge as a positive catalyst? (e.g., PCE data better than expected, the Federal Reserve releasing dovish signals, easing trade tensions).
Can a new industry narrative emerge and attract capital?
· Downside Risk: If the ETF continues to experience net outflows, and negative macroeconomic factors emerge, a price drop below the short-term holder cost line of $95,411 may trigger a deeper adjustment, and the market will retest lower long-term support levels.
· Upside Potential: If the ETF regains momentum, or if other significant positive factors emerge, combined with the already tight supply side, prices still have the momentum to challenge and break through new highs, but the process may be more tortuous than before.
• The expectations for the "Summer Boom" are facing a test: From market news, it appears that the market is waiting for this summer to break the market's tranquility and bring about another boom. However, given the current context of weakened ETF flows, achieving this has become more difficult and requires strong catalysts from either macro factors or within the industry.
Medium to Long Term:
The foundation of the structural bull market remains, but the path will rely more on the realization of fundamentals. The supply structure dominated by long-term holders is the core logic that supports a positive long-term outlook. However, the extent and sustainability of the future bull market will depend more on:
Can the encryption industry truly generate sustainable economic value and large-scale applications? (Whether the expected narratives such as "stablecoin/trading platform channels" can be realized is key (with high difficulty)).
Will the regulatory environment evolve towards a clearer and more favorable direction? This will determine whether institutional capital can flow in on a larger scale and more sustainably.
Can BTC consolidate and expand its value positioning in competition with traditional assets and emerging technologies? Is it only a "digital gold", or are there other narratives widely recognized? Differentiation will intensify: • In a more challenging market environment, only projects that truly possess core technology, a strong ecosystem, and a clear value proposition will stand out.
Mid-term Exploration
• Liquidity Supply
• Price Level Structure Analysis
• Futures clearing structure
• WTR risk coefficient 1
• USDC Purchase Power Comprehensive Score
• Whale Comprehensive Score
(The following image shows the liquidity supply)
!
The liquidity supply continues to show significant growth, and it is possible that the current market variables have not been exposed to liquidity risks. Abundant liquidity allows the market to maintain volatility within the current pricing structure.
(Price structure analysis at various levels in the figure below)
The current inventory top price is around 108,000, while the short-term cost line price is around 95,000. The current pricing may hover around these two price levels.
(The following figure shows the futures clearing structure)
The current derivatives liquidation structure has switched from a short liquidation to a long liquidation structure. It is possible that in the current environment, the risks faced by longs may be higher than those faced by shorts. After the trend shifted from short to long, the market briefly entered a high-level sideways movement. To ensure comprehensive observation, we need to take into account the risk factors of the spot market.
(The following image WTR risk coefficient 1)
WTR risk coefficient 1 indicates that currently BTC and ETH have not exposed significant spot risk, and the preconditions for a large-scale correction have not yet formed.
(The following image shows the comprehensive score of USDC purchasing power)
USDC purchasing power has a slight rating fluctuation and currently maintains a relatively high rating. There may still be liquidity support provided by the purchasing power of USDC in the market.
(The image below shows the comprehensive score of the whale)
The rating of the giant whales remains high and has not declined. The market may still be leaning towards a wandering tone.
Short-term Observation
• Derivative Risk Coefficient
• Options Intent Transaction Ratio
• Derivative trading volume
• Implied Volatility of Options
• Profit and Loss Transfer Amount
• New addresses and active addresses
• Rock Candy Orange Trading Platform Net Head Size
• Auntie Trading Platform Net Head Size
• High weight selling pressure
• Global Purchasing Power Status
• Stablecoin trading platform net head size
Derivative Rating: The risk coefficient is in the red zone, indicating high risk for derivatives.
(The risk coefficient of derivatives in the figure below)
The risk coefficient is still in the red zone, and currently, there are few liquidations for both long and short positions. In line with last week's expectations, this week the derivatives market will experience significant volatility, leading to liquidations for derivatives participants.
(The following chart shows the options intention transaction ratio)
The put option ratio is at a medium-high level, and the trading volume is at a medium level.
(The following image shows the trading volume of derivatives)
The trading volume of derivatives is at the median.
(The following chart shows implied volatility of options)
The implied volatility of options has only low amplitude fluctuations in the short term.
Emotional state rating: Neutral
(Below is the profit and loss transfer amount)
Last week mentioned the positive sentiment in the market ( blue line ) and the price was in a divergence state, then the market sentiment rose to a short-term high, breaking this divergence.
(The image below shows new addresses and active addresses)
The number of new active addresses is low. Spot and selling pressure structure rating: BTC and ETH are in a continuous state of large outflows.
(The net head size of the rock candy orange trading platform in the figure below)
Currently, BTC is experiencing a large outflow.
(The net head size of the trading platform in the image below E)
Currently, ETH is experiencing a continuous large outflow, with only a small inflow.
(The following image shows high-weighted selling pressure)
ETH has a large amount of high-weight selling pressure, but it has eased for now.
Purchasing Power Rating: Global purchasing power and stablecoin purchasing power remain unchanged compared to last week.
(The picture below shows the global purchasing power status)
Global purchasing power remained stable compared to last week.
(The following image shows the net head size of the USDT trading platform)
The purchasing power of stablecoins is flat compared to last week.
Weekly Summary:
Message Analysis and Summary:
The current market's "splitting" and "dependence":
◦ Macro level: Risk sentiment fluctuated amid high uncertainty over Trump's trade policy and vague expectations of the Federal Reserve's monetary policy. As a part of risky assets, the short-term trend of the crypto market is highly linked to these macro factors. ◦ Crypto internals: BTC relies on the institutional inflow of ETFs and the "digital money" narrative, showing a certain resilience and "maturity" (QCP view), becoming the "anchor" of the market. However, much of this strength is a short-term fulfillment of the "ongoing narrative".
The sustainability of core driving force needs to be questioned:
◦ After the "honeymoon period" of the BTC ETF: After the initial institutional allocation is completed, whether subsequent capital inflows can continue will depend on whether BTC can continuously prove its value in global asset allocation (compared to gold, stocks, etc.), and whether the macro liquidity environment is conducive.
◦ The fulfillment pressure of "expected narratives": Whether it is the Federal Reserve lowering interest rates, a clearer regulatory environment, or the large-scale implementation of encryption applications (such as "stablecoin/trading platform channels"), these "expected narratives" driving future growth all face a long and uncertain path to realization. The market's patience for these narratives is limited.
Differentiation under Narrative Rotation and Attention Competition:
◦ Internal rotation: The rapid retreat of the Meme craze heralds an acceleration of internal hot spots rotation in the market. If BTC can maintain its strength, some funds may flow into ETH (benefiting from ETF expectations and potential regulatory favors) and other altcoins with real progress. However, a broad market rally is difficult to achieve, and the "authenticity" of fundamentals and narratives will become more important.
◦ External competition: The powerful narrative of AI will continue to pose competition for "attention" and "capital" in the encryption industry. The encryption industry needs to find a path to coexist with AI or demonstrate unique advantages, otherwise it may face the risk of marginalization in the "positioning battle" of the technological wave.
Future: Seeking structural opportunities amidst uncertainty, but there is a risk if the "expectation" falls short.
Short to Medium Term:
• The market will continue to fluctuate between macroeconomic uncertainties (trade policies, Federal Reserve interest rate decisions) and internal driving forces of encryption (ETF fund flows, regulatory signals).
• BTC is expected to maintain relative strength with the support of institutional capital, but overall market volatility remains high. PCE data and the Federal Reserve's statements before July will be key observation points. Whether summer can "break the calm and bring another wave to the market" depends on whether these uncertainties can develop in a positive direction.
Medium to Long Term:
• Optimistic scenario: Improvement in macro liquidity (interest rate cuts materialize), regulatory environment gradually clarifies, ETFs continuously attract capital, and some genuinely valuable encryption applications (possibly including preliminary forms of "virtual world channels") begin to show results. The market may welcome a more widespread structural bull market, but differentiation will intensify.
• Pessimistic scenario: The macro environment continues to be unfavorable (stagflation, escalation of geopolitical conflicts), regulatory tightening, ETF capital inflows slow down or even reverse, and the "expectation narrative" cannot be fulfilled for a long time. The market may undergo a prolonged period of adjustment and value reassessment. Other technology sectors such as AI continue to be strong, further diverting resources from the encryption market.
• Most likely scenario: significant volatility, sometimes upward, but the process is tortuous. A few leading assets (such as BTC, ETH) and truly valuable niche sectors will attract capital interest, while a large number of projects lacking fundamental support will be eliminated. The market will pay more attention to the actual utility and sustainability of encryption, rather than pure speculation.
On-chain Long-term Insights:
The supply side of BTC remains very strong, which is an important source of market confidence.
Of course, the recent weakening of ETF capital inflows is a warning signal that cannot be ignored, indicating that one of the main demand engines in the market is "cooling down."
The current market is in a critical observation and directional selection period. The macro environment, the subsequent performance of ETFs, and whether new industry narratives can emerge will jointly determine the trend in the next phase.
• Market tone: There is a need to pay more attention to risks and to maintain patience and caution regarding the fulfillment of the "expected narrative." Frenzied emotions may need to give way to more fundamental value considerations.
On-chain Mid-term Exploration:
Liquidity continues to expand, temporarily suppressing short-term risks, and the current market remains relatively stable in its fluctuations.
The market fluctuates around the existing top of 108000 and the short-term cost line of 95000.
Derivatives clearing shifts to a long-dominated market, with short-term bullish pressure increasing.
The risk indicators for BTC and ETH spot have not shown any abnormalities, and the conditions for a significant pullback are not yet sufficient.
USDC purchasing power rating remains high, with solid support from on-site liquidity.
The holdings score of giant whales remains high, and the market maintains a consolidation structure.
• Market Tone: Hesitant, Cautious. Ample liquidity supports market fluctuations, but the derivatives have shifted to a bullish liquidation structure, necessitating caution regarding the potential change in trend triggered by this shift.
On-chain Short-term Observation:
The risk coefficient is in the red zone, indicating higher risk for derivatives.
The number of new active addresses is relatively low.
Market Sentiment Rating: Neutral.
The net position of BTC and ETH on the trading platform is in a continuous large outflow state.
The global purchasing power and the purchasing power of stablecoins remained flat compared to last week.
The probability of not breaking below 95000~100000 in the short term is 80%;
• Market positioning: Currently, there are relatively few chips choosing to take profits at the short-term price level, and the buying power is sufficient to support. This week's expectations are basically consistent with last week, and there is still a possibility of further short squeezes, while the probability of a direct large pullback is low.
Risk Warning: The above are all market discussions and explorations, and do not have directional opinions on investments; please approach with caution and prevent market black swan risks.
This article is submitted and does not represent the views.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
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CoreFirewoodTrunkLine
· 05-28 07:31
After analyzing so much, it's still so tiring. Isn't it just that the exchange pros can pump whenever they want and let it fall whenever they want?
Week 20 on-chain data: The institution-led bull run faces its first test, where will BTC go from here?
Weekly Review
From May 19 to May 26 this week, the highest price of ice sugar orange was around $111980, and the lowest was close to $102000, with a fluctuation range of about 9.78%. Observing the chip distribution chart, there are a large number of chips traded around 99000, which will provide certain support or pressure.
• Analysis:
60000-68000 approximately 1.22 million pieces;
76000-89000 approximately 1.25 million pieces;
90,000-100,000 approximately 1.43 million coins;
• The probability of not falling below 95000~100000 in the short term is 80%;
Important News
Economic News
1. Core Event: The Repeatedness and Uncertainty of Trump's Tariff Policy
◦ Contents: Trump's EU tariffs have jumped back and forth between "imposing 50%" and "extending the 90-day negotiation window until July 9." The fourth round of tariff talks between Japan and the United States is scheduled to be held on the 30th.
2. Federal Reserve Monetary Policy Expectations and Official Statements
◦ There are differences in interest rate cut expectations:
▪ Goolsbee: Interest rate cuts may still be possible in the next 10-16 months (dovish). ▪ Bostic: Need to wait 3-6 months to observe uncertainty (neutral).
▪ Williams: It's impossible to fully understand in June or July (rather cautious).
▪ Morgan Stanley: The Federal Reserve will not cut interest rates this year, and will begin to cut rates in March 2026 (hawkish stance, significantly different from mainstream market expectations).
◦ Key data: The PCE data on Friday is an important basis for the Federal Reserve's monetary policy.
3. Other Macroeconomic Indicators and Asset Prices
◦ U.S. stock index futures rose (Nasdaq futures up 1.5%, S&P 500 index up 1.2%).
◦ The dollar index fell by 0.1%.
◦ Citigroup raises gold price target to $3500/oz (due to expected tariff escalation).
◦ The U.S. Treasury has stated that the sovereign wealth fund plan is on hold.
Encryption Ecosystem Messaging
1. Bitcoin (BTC) Market Performance and Driving Factors
◦ BTC price rebounded to $110,000 (after Trump eased tariff policies).
◦ Coindesk analyst: The historic new high of BTC is mainly driven by institutions, the retail Meme frenzy has subsided, and market sentiment is shifting towards more sustainable behavior, which may pave the way for the long term. ◦ Analyst Eugene Ng Ah Sio: BTC maintains a clear upward trend, if sustained, there is an opportunity in the shanzhai market.
◦ Interpretation:
▪ Institution-led "ongoing narrative": The success of ETF is one of the core driving forces of BTC's current bull market, which is a typical "ongoing narrative."
2. ETF Fund Flows (Core "Ongoing Narrative")
◦ Last week, the inflow of BTC spot ETF in the United States was 2.75 billion dollars, and the inflow of ETH spot ETF was about 250 million dollars (the highest since early February).
◦ The cumulative net inflow of the US BTC spot ETF has reached 44.499 billion USD, setting a new historical high.
◦ Braid IBIT has had no net outflows for 30 consecutive days, with net assets exceeding 71 billion USD.
3. Enterprises and institutions increase BTC holdings (strengthening institutional narrative)
◦ Bitwise Data: By 2025, the BTC purchase volume by companies in the U.S. and other countries has exceeded 3 times the new supply of BTC.
◦ Semler Scientific increased its holdings by 455 BTC.
◦ Strategy increased holdings by 4020 BTC last week.
4. Regulatory Dynamics and Industry Conferences (Key Variables Affecting the "Expected Narrative")
◦ SEC's Hester Peirce supports providing clearer guidelines on the jurisdiction of securities laws for activities such as PoS/DPoS, which is seen as positive news for U.S. institutional participation in staking. ◦ The Bitcoin 2025 conference (May 27-29) will feature the White House cryptocurrency and AI director, U.S. Senator, and expected Vice President Pence.
◦ Analysis:
▪ Clarity in regulation "expected narrative": Peirce's statements are very important, as they point to a regulatory environment that may develop towards a clearer and more friendly direction. This is crucial for the long-term healthy development of the industry, especially in emerging areas such as staking.
Long-term insights: used to observe our long-term situation; bull market/bear market/structural changes/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; as well as the possibility of certain directions and certain events occurring under certain premises.
Long-term Insights
• Non-liquid long-term whales
• on-chain spot total selling pressure
• BTC's American ETF
• The holding structure of long-term participants with different durations
• The trading platform's large inflow and outflow net head size
• Short and long-term holder cost line
• Since the end of 2023, there has been a continuous upward trend, indicating that these entities are constantly accumulating.
• The overall trend indicates that long-term holders and whales have strong confidence and continue to withdraw BTC from the liquid market, which constitutes a strong supply-side support. The long-term bullish structure remains unchanged, but the newly added accumulation momentum may weaken marginally in the short term.
Recently, the market's "total selling pressure" has been on a slightly rising trend. There is a small amount of inflow, but the trading activity is normally rotating, rather than panic selling. From the perspective of "potential selling pressure", there have been no worrying signs of large-scale chips concentrating on trading platforms recently, and the market's willingness to sell is low.
Recently, the inflow of funds into ETFs has indeed shown a significant decline compared to previous peaks, even approaching zero or experiencing slight net outflows on some trading days. Current:
• "The ongoing narrative" faces challenges: The slowdown in ETF fund inflows is a direct test of one of the core driving forces of this bull market.
• The current ETF flow is a key window for observing institutional attitudes and new sources of funding, and its continued weakness will put pressure on market confidence.
• The marginal buying power driven by ETFs is weakening, which is a significant change the current market is facing.
The market needs to look for new demand growth points or wait for ETF demand to recover under new conditions.
The share representing long-term holders over 6 months (green to purple area overlay) has recently recovered slightly to 0.449. Analysis: The increase in the share of long-term holders (often considered "smart money" or investors with strong convictions) and their maintenance at high levels is a sign of a healthy market structure, reducing short-term speculative selling pressure.
• Synergy with Figure 1: This is consistent with the increasing trend of non-liquid supply in Figure 1, together depicting the shift of chips from short-term traders to long-term holders, transitioning from ample liquidity to a supply shortage. The microstructure of the market remains solid, with the "ballast" effect constituted by long-term holders being significant.
Net outflows representing large transfers (yellow $1-10 million, red over $10 million). Recently, although not as continuous and intense as in certain previous phases, overall net outflows remain the dominant trend, and large-scale net inflows have not occurred. Despite a slowdown in ETF flows, significant funds continue to flow out of trading platforms, indicating that there are still large users or institutions accumulating BTC and self-custodying, or engaging in trades through the OTC market before withdrawing. The potential selling pressure from trading platforms continues to decrease, and the accumulation behavior of large users is still ongoing, although its intensity may fluctuate with market conditions.
The short-term investor cost line (orange-yellow) is currently at $95,411. The current price (approximately $109,000) is still significantly above this cost line.
• As long as the price remains above the average cost of short-term holders, the risk of large-scale panic selling in the short term is low, as most short-term participants are in a profitable state. Key support level: $95,411 is an important psychological and technical support area. If the price pulls back to this level and gains effective support, it will strengthen market confidence; if it breaks below, it may trigger stop-loss orders, increasing short-term downward pressure.
• The battleground for new capital: This price level is also a key area for new entering capital and short-term capital seeking to take profits.
• The short-term market structure is still healthy, but attention must be paid to the effectiveness of the support at 95,411 dollars.
Overall Analysis:
Base Stone: The supply side continues to tighten, and long-term holders have strong confidence. Although short-term accumulation momentum is marginally slowing down, non-liquid supply continues to increase, and the proportion of long-term holders remains stable at high levels and has slightly rebounded. Large amounts of capital continue to flow out of trading platforms, and large transfers to trading platforms (potential selling pressure) are inactive. Together, these factors constitute a strong supply-side support for the market, distinguishing it as a core characteristic different from previous cycles.
Current Challenges: ETF Driving Force Weakens, Market Faces Demand Test ( Figure 3). The significant decline in ETF capital inflows is the most direct challenge facing the current market. This means that the previously main source of incremental capital is losing momentum, and the market needs a new demand story or the recovery of existing demand to maintain upward momentum.
Short-term market sentiment and key water level ( chart 6). The current price is above the short-term holder cost line ($95,411), providing a "safety cushion" for the market. This price point is a critical watershed for assessing the strength of the short-term market.
The combined effect of macroeconomic uncertainty and narrative vacuum period. Against the backdrop of weakened ETF inflows, macro-level uncertainties (Trump tariffs, Federal Reserve policy fog) may amplify the negative impact on market sentiment. At the same time, as discussed in the following text (news analysis and summary), new "expected narratives" that can significantly attract capital (such as stablecoin channels, substantial regulatory breakthroughs) have not yet formed effective connections, and the market may be in a brief "narrative vacuum period" or "narrative fatigue period."
Pressure under "attention competition". In the context of weakened self-driving force and unclear macro environment, the encryption market (especially assets outside of BTC) may appear more passive in the "attention competition" against stronger narratives such as AI.
Future Outlook :
Short to mid-term :
Main tone: Possible high-level fluctuations, a critical period for direction selection. The market may undergo a period of consolidation within the current price range (for example, with $95,411 as the lower bound and the previous high as the upper bound). The choice of direction will depend on:
Can ETF traffic recover? This is the most important observation indicator.
Can macro news emerge as a positive catalyst? (e.g., PCE data better than expected, the Federal Reserve releasing dovish signals, easing trade tensions).
Can a new industry narrative emerge and attract capital?
· Downside Risk: If the ETF continues to experience net outflows, and negative macroeconomic factors emerge, a price drop below the short-term holder cost line of $95,411 may trigger a deeper adjustment, and the market will retest lower long-term support levels.
· Upside Potential: If the ETF regains momentum, or if other significant positive factors emerge, combined with the already tight supply side, prices still have the momentum to challenge and break through new highs, but the process may be more tortuous than before.
• The expectations for the "Summer Boom" are facing a test: From market news, it appears that the market is waiting for this summer to break the market's tranquility and bring about another boom. However, given the current context of weakened ETF flows, achieving this has become more difficult and requires strong catalysts from either macro factors or within the industry.
Medium to Long Term:
The foundation of the structural bull market remains, but the path will rely more on the realization of fundamentals. The supply structure dominated by long-term holders is the core logic that supports a positive long-term outlook. However, the extent and sustainability of the future bull market will depend more on:
Can the encryption industry truly generate sustainable economic value and large-scale applications? (Whether the expected narratives such as "stablecoin/trading platform channels" can be realized is key (with high difficulty)).
Will the regulatory environment evolve towards a clearer and more favorable direction? This will determine whether institutional capital can flow in on a larger scale and more sustainably.
Can BTC consolidate and expand its value positioning in competition with traditional assets and emerging technologies? Is it only a "digital gold", or are there other narratives widely recognized? Differentiation will intensify: • In a more challenging market environment, only projects that truly possess core technology, a strong ecosystem, and a clear value proposition will stand out.
Mid-term Exploration
• Liquidity Supply
• Price Level Structure Analysis
• Futures clearing structure
• WTR risk coefficient 1
• USDC Purchase Power Comprehensive Score
• Whale Comprehensive Score
The liquidity supply continues to show significant growth, and it is possible that the current market variables have not been exposed to liquidity risks. Abundant liquidity allows the market to maintain volatility within the current pricing structure.
The current inventory top price is around 108,000, while the short-term cost line price is around 95,000. The current pricing may hover around these two price levels.
The current derivatives liquidation structure has switched from a short liquidation to a long liquidation structure. It is possible that in the current environment, the risks faced by longs may be higher than those faced by shorts. After the trend shifted from short to long, the market briefly entered a high-level sideways movement. To ensure comprehensive observation, we need to take into account the risk factors of the spot market.
WTR risk coefficient 1 indicates that currently BTC and ETH have not exposed significant spot risk, and the preconditions for a large-scale correction have not yet formed.
USDC purchasing power has a slight rating fluctuation and currently maintains a relatively high rating. There may still be liquidity support provided by the purchasing power of USDC in the market.
The rating of the giant whales remains high and has not declined. The market may still be leaning towards a wandering tone.
Short-term Observation
• Derivative Risk Coefficient
• Options Intent Transaction Ratio
• Derivative trading volume
• Implied Volatility of Options
• Profit and Loss Transfer Amount
• New addresses and active addresses
• Rock Candy Orange Trading Platform Net Head Size
• Auntie Trading Platform Net Head Size
• High weight selling pressure
• Global Purchasing Power Status
• Stablecoin trading platform net head size
Derivative Rating: The risk coefficient is in the red zone, indicating high risk for derivatives.
The risk coefficient is still in the red zone, and currently, there are few liquidations for both long and short positions. In line with last week's expectations, this week the derivatives market will experience significant volatility, leading to liquidations for derivatives participants.
The put option ratio is at a medium-high level, and the trading volume is at a medium level.
The trading volume of derivatives is at the median.
The implied volatility of options has only low amplitude fluctuations in the short term.
Emotional state rating: Neutral
Last week mentioned the positive sentiment in the market ( blue line ) and the price was in a divergence state, then the market sentiment rose to a short-term high, breaking this divergence.
The number of new active addresses is low. Spot and selling pressure structure rating: BTC and ETH are in a continuous state of large outflows.
Currently, BTC is experiencing a large outflow.
Currently, ETH is experiencing a continuous large outflow, with only a small inflow.
ETH has a large amount of high-weight selling pressure, but it has eased for now. Purchasing Power Rating: Global purchasing power and stablecoin purchasing power remain unchanged compared to last week.
Global purchasing power remained stable compared to last week.
The purchasing power of stablecoins is flat compared to last week.
Weekly Summary:
Message Analysis and Summary:
◦ Macro level: Risk sentiment fluctuated amid high uncertainty over Trump's trade policy and vague expectations of the Federal Reserve's monetary policy. As a part of risky assets, the short-term trend of the crypto market is highly linked to these macro factors. ◦ Crypto internals: BTC relies on the institutional inflow of ETFs and the "digital money" narrative, showing a certain resilience and "maturity" (QCP view), becoming the "anchor" of the market. However, much of this strength is a short-term fulfillment of the "ongoing narrative".
◦ After the "honeymoon period" of the BTC ETF: After the initial institutional allocation is completed, whether subsequent capital inflows can continue will depend on whether BTC can continuously prove its value in global asset allocation (compared to gold, stocks, etc.), and whether the macro liquidity environment is conducive.
◦ The fulfillment pressure of "expected narratives": Whether it is the Federal Reserve lowering interest rates, a clearer regulatory environment, or the large-scale implementation of encryption applications (such as "stablecoin/trading platform channels"), these "expected narratives" driving future growth all face a long and uncertain path to realization. The market's patience for these narratives is limited.
◦ Internal rotation: The rapid retreat of the Meme craze heralds an acceleration of internal hot spots rotation in the market. If BTC can maintain its strength, some funds may flow into ETH (benefiting from ETF expectations and potential regulatory favors) and other altcoins with real progress. However, a broad market rally is difficult to achieve, and the "authenticity" of fundamentals and narratives will become more important. ◦ External competition: The powerful narrative of AI will continue to pose competition for "attention" and "capital" in the encryption industry. The encryption industry needs to find a path to coexist with AI or demonstrate unique advantages, otherwise it may face the risk of marginalization in the "positioning battle" of the technological wave.
Future: Seeking structural opportunities amidst uncertainty, but there is a risk if the "expectation" falls short.
Short to Medium Term:
• The market will continue to fluctuate between macroeconomic uncertainties (trade policies, Federal Reserve interest rate decisions) and internal driving forces of encryption (ETF fund flows, regulatory signals). • BTC is expected to maintain relative strength with the support of institutional capital, but overall market volatility remains high. PCE data and the Federal Reserve's statements before July will be key observation points. Whether summer can "break the calm and bring another wave to the market" depends on whether these uncertainties can develop in a positive direction.
Medium to Long Term:
• Optimistic scenario: Improvement in macro liquidity (interest rate cuts materialize), regulatory environment gradually clarifies, ETFs continuously attract capital, and some genuinely valuable encryption applications (possibly including preliminary forms of "virtual world channels") begin to show results. The market may welcome a more widespread structural bull market, but differentiation will intensify.
• Pessimistic scenario: The macro environment continues to be unfavorable (stagflation, escalation of geopolitical conflicts), regulatory tightening, ETF capital inflows slow down or even reverse, and the "expectation narrative" cannot be fulfilled for a long time. The market may undergo a prolonged period of adjustment and value reassessment. Other technology sectors such as AI continue to be strong, further diverting resources from the encryption market.
• Most likely scenario: significant volatility, sometimes upward, but the process is tortuous. A few leading assets (such as BTC, ETH) and truly valuable niche sectors will attract capital interest, while a large number of projects lacking fundamental support will be eliminated. The market will pay more attention to the actual utility and sustainability of encryption, rather than pure speculation.
On-chain Long-term Insights:
• Market tone: There is a need to pay more attention to risks and to maintain patience and caution regarding the fulfillment of the "expected narrative." Frenzied emotions may need to give way to more fundamental value considerations.
On-chain Mid-term Exploration:
• Market Tone: Hesitant, Cautious. Ample liquidity supports market fluctuations, but the derivatives have shifted to a bullish liquidation structure, necessitating caution regarding the potential change in trend triggered by this shift.
On-chain Short-term Observation:
• Market positioning: Currently, there are relatively few chips choosing to take profits at the short-term price level, and the buying power is sufficient to support. This week's expectations are basically consistent with last week, and there is still a possibility of further short squeezes, while the probability of a direct large pullback is low.
Risk Warning: The above are all market discussions and explorations, and do not have directional opinions on investments; please approach with caution and prevent market black swan risks.
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