Author: Shang2046

The information, opinions, and judgments regarding markets, projects, and currencies mentioned in this report are for reference only and do not constitute any investment advice.

Market for the Week

Last week, after BTC fell all the way to $58,400, it received strong support after the trading volume effectively increased, gradually approaching the $64,000 mark after a 4-day rebound, with Coinbase's trading volume increasing by 31% compared to the previous week. The market formed the second largest accumulation point of 479,000 BTC at $61,000. The first accumulation point was at $16,000, which is where this bull market began.

Once again, the support for the breakeven line of short-term investors has been validated. The eMerge engine shows that after a short-term loss clearance, the market is at the bottom of the medium-term. However, the market still needs to continue its efforts to return to the latest breakeven point of $64,400.

A further test point is the mainstream miner shutdown price of $66,000 for U.S. miners that we have repeatedly mentioned. If it can pass these two hurdles, the price of BTC is expected to return to the rhythm of the bull market in March. When the market plummeted to $58,400 last week, market sentiment quickly fell to a state of "extreme panic," with a panic index reaching 31. However, even so, the price of BTC has only adjusted by 20% from its high point, but after 16 weeks of shrinking "high-level oscillation," market confidence has been greatly impacted. Some pessimists even suggest that this bull market may have ended.

We tend to believe that the market is in the latter stage of medium-term clearance. Over the course of a year, several key factors, such as the certainty of interest rate cuts and structural bullish factors of the U.S. election, remain solid.

As mentioned in the previous weekly report, in the short term, people may have overestimated the momentum of the U.S. and Hong Kong spot ETFs: institutions account for only 22% (and most of them are hedge funds), and true long-term investors have not yet entered. However, looking at a longer time frame, people are seriously underestimating the significance of ETF exposure.

What about a broader perspective? Last week, the far-right party won the first round of elections in the French parliament. Prior to this, the far-right also won in the European Parliament elections. In the United States, "America First" Mr. Trump seems to be getting closer to a second term in the White House; globally, right-wing forces are rising widely, and their common feature is the rejection of global trade and cooperation, and the brewing of populism domestically.

The world has entered an era of fracture and turmoil against the backdrop of a new cold war and local hot wars. This is the historic window for Bitcoin to truly rise to the throne of the world's major safe-haven assets.

Supply and Demand Structure

Last week, over $650 million flowed out of USD stablecoins, reversing the inflow from the previous week. The holdings of long-term investors increased by 20,000 BTC last week. However, the holdings of exchanges increased by 20,000 BTC, reaching 2.967 million BTC, showing a slight increase in short-term selling pressure.

As for ETFs, after a net outflow of $175 million last Monday, the remaining 4 days saw a weak inflow, with a net outflow of $38 million for the entire week. Overall, the liquidity of ETFs is also in a quasi-frozen state, severely shrinking in scale compared to the billions of dollars in daily inflows in March and April.

In terms of contract data, which is more sensitive to short-term prices, whether it's open interest, funding rates, or volatility, they are all at relatively low levels compared to the past year. This indicates that the market may be brewing a new direction.

On-chain Data

There has been a change in on-chain data, with active data throughout the week. New addresses, active entities, and computational numbers have all rebounded, with a rebound trend in new addresses over 7 days. There is no significant change in on-chain transfer fees.

EMC BTC Cycle Indicator

Like last week, the EMC BTC Cycle bull market indicator is 0.125, indicating that the market is still in a bull market dormancy period.

END

EMC Labs (Emerging Labs) was founded in April 2023 by cryptocurrency investors and data scientists. It focuses on blockchain industry research and secondary market investment in Crypto, with industry foresight, insights, and data mining as its core competitive strengths, committed to participating in the thriving blockchain industry through research and investment, and promoting the well-being of humanity through blockchain and cryptocurrency.

For more information, please visit: https://www.emc.fund

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