EMC Labs Bitcoin weekly observation: ETH approved expectations and anticipation of the US election, BTC slowly re-enters the upward trend

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

Market Summary:

Last week, BTC continued its rebound trend, with a low of $66,060 and a high of $71,979, close to the all-time high of $73,777 in March. The final increase was 3.37%, with a volatility of 8.93%.

In the past 7 days, the rebound mainly came from the limited approval of the ETH spot ETF by the SEC in the United States. Although the final approval and listing for trading will take another 1-2 months, combined with the passage of the FIT 21 bill by the US Congress (clarity in regulatory policies), and Trump’s recent frequent gestures of goodwill towards the cryptocurrency industry, the macroclimate in the United States has suddenly become clear.

The US stock market is also oscillating at high levels similar to BTC, with the Dow Jones falling sharply and rebounding weakly, while the Nasdaq rebounded strongly (NVIDIA’s financial report exceeded expectations). BTC is currently maintaining a relatively weak state, and with the expectation of the ETH ETF landing, there are signs of industrial capital transferring from BTC to ETH in the market. The ETH/BTC trading pair rebounded by 20%, with trading volume quadrupling.

In terms of interest rate cuts, the Fed is dovish and hawkish in turn, triggering a BTC reaction each time. Until the rate cut is clear, this will be the underlying tone of the BTC market, and this time may continue for 2 months, close to the 17-week shock and adjustment period that began in June last year.

Supply and Demand Structure:

This round of the bull market has a more obvious characteristics of the similar trajectory, which is closer to the trajectory of 2017: slow rise, several high-level stops and consolidations along the way. This forms sufficient turnover to provide strong support for subsequent pumps.

Last week we pointed out that through on-chain data, the range of $60,000 to $73,000 has become the largest accumulation range for BTC, with a total of about 3 million coins. At the same time, $66,000 has also become the single largest accumulation area in all price ranges, reaching 546,000 coins. It now appears that this may have formed a support zone for a new round of market movements.

Since the original text contains the term “ETF,” it should be kept as is. The translation of the text is as follows: “The US ETF has seen net inflows for two consecutive weeks since March, with net inflows reaching $1.055 billion after a net inflow of $946 million last week.”

The inflow of US dollar stablecoins can be regarded as a core indicator of long-term liquidity in the market. After an inflow of $823 million last week, stablecoins saw a slight outflow of $30 million last week. Further observation, the net outflow mainly came from the United States Compliance stablecoin USDC outflow of 693 million, which is related to the continuous decline in its market share for 2 years; Market-based stablecoin USDT saw a net inflow of $606 million.

As of May 26, the Centralized Exchange holding coin was 2.329 million, an increase of 12,000 from last week, which shows that with the Rebound of market prices, the supply of short-term BTC has increased slightly, but the volume is not long.

Similarly, with the continuous rebound in prices for two weeks, the on-chain profits of short-term investors holding BTC for less than 5 months have risen from losses to 12%, which is a relatively moderate profit during a bull market cycle. Looking back over the past 2 years, it does not constitute too concentrated profit selling pressure.

Our statistics show that BTC is significantly uncorrelated with 18 major asset classes worldwide, including US stocks, oil, gold, etc., and is strongly negatively correlated with the US dollar. Therefore, until the expectation of a US interest rate cut reaches its peak, the overall market is still in a dynamic balance of an upward trend. However, we also see the approval of ETH ETF and the early warming-up of the US election, and things are happening one after another to “compete” for US cryptocurrency investors.

We should constantly go back to the original purpose of BTC’s creation, which is also its underlying value: to fight against the over-issuance of central coins. In today’s ever-expanding dollar and U.S. debt systems, it’s worth the wait.

EMC BTC Cycle Indicator:

Due to the recovery of market price indicators, long and short lot indicators, the EMC BTC Cycle engine shows that our Bull Market acceleration period has risen from a low of 0.37 to 0.63.

结束

EMC Labs (Emerging Laboratory) was founded by cryptocurrency investors and data scientists in April 2023. Focusing on blockchain industry research and Crypto secondary market investment, it aims to participate in the thriving blockchain industry through research and investment, and promote the well-being of humanity through blockchain and encrypted assets.

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