EMC LabsBTC Weekly Observation (7.15~7.21): Strong fund inflow, BTC is expected to completely break free from the consolidation zone

Original author: Shang2046

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 Weekly

BTC has rebounded strongly for two consecutive weeks, reaching above $68,000 and recording a weekly gain of 12.68%. This is the largest increase in the past 20 weeks, reversing the downward trend of BTC after the previous week.

This week, the short-term retracement fell back to the 7-day moving average, and the long-term moving average formed a new rising channel. The weekly 7-day line crossed above the 14-week line, and the moving average started to turn upward. Since reaching a historic high in March, the market has been oscillating for nearly 20 weeks. We expect the market to completely break free from the oscillation range, with the most optimistic scenario returning to $73000 within the month.

ETH pump 8.89% , weaker than BTC, SOL pump 24.94% , Altseason Indicator indicator crosses above the 30-day moving average, longzone starts to strengthen.

In summary, the strong reversal of the funding situation in July has reversed the decline of the two months of May and June. The overall capital inflow in 3 weeks reached 3 billion US dollars, which is 2.5 times the cumulative inflow of 1.2 billion US dollars in the past 2 months. U.S. ETFs have also shown similar strong inflows.

Federal Reserve and Economic Data

In the past two weeks, the Federal Reserve has continued to be dovish, and various investment banks are optimistic about a rate cut in September. The more aggressive ones believe that there may be a straight cut of 50 basis points in September, or three rate cuts this year. This time is the true turning point for rate cuts, and market participants are starting to reprice various assets. The US dollar index fell to a weekly low of 103.65. The gold price fell slightly and retraced to $2400.

In terms of US stocks, the previously strong Nasdaq and S&P 500 saw pullbacks of 3.65% and 0.71% respectively, while the Dow Jones saw a slight increase. After the expectations are settled, it is expected that the volatility will continue for a period of time before entering a new trend.

Another unavoidable macro factor is the U.S. presidential election. After experiencing a shooting incident and Biden voluntarily withdrawing from the race, Republican presidential candidate Trump is getting closer to winning the November election. Trump, who is friendly to encryption assets, will attend the U.S. BTC conference next week. The market is optimistic that the United States will further support the development of encryption assets in the next four years.

Funding

Continuing the trend of the previous week, the Stable Coin channel is experiencing accelerated inflows, with a total inflow of over 1.594 billion US dollars for the week, the highest weekly inflow since May. USDT/USDC inflows are in sync, with 1.458 billion and 0.136 billion respectively. USDT, which was previously sluggish, saw a significant inflow, becoming one of the driving forces behind the price pump this week.

ETF channel maintained net inflows for all 5 trading days this week, totaling $814 million, lower than the $1 billion from the week before, but still at a high level, which is quite remarkable given the sharp adjustment of the Nasdaq. Both channels saw inflows of over $2.4 billion for the whole week, and BTC’s pump has solid support, showing the recognition of current BTC price by the funds.

Chip Supply

With the recovery of market liquidity, long-term investors reduced their holdings by 17,800, and short-term investors reduced their holdings by 22,200. The exchange accumulated 34,600 new coins, reaching a new high in the past month. The profit margin of short-term investors in the entire market has returned to positive, but only 4% are profitable. This may be related to the rapid drop of BTC to 53,500, which severely hit market confidence, and the limited behavior of short-term investors to ‘catch the bottom’. According to the past on-chain patterns, the selling pressure of short-term investors often appears when the profit margin exceeds 30%, so, by this calculation, $70,000 may generate short-term profit pressure.

This week, the price of BTC has risen above the Miner shutdown price. Miners continue to sell 9800 coins, but Computing Power continues to rebound. The weekly trend continues to rise, indicating strong confidence on the Miner side.

BTC on-chain data

New Address, slight Rebound in activity, hovering near the 30-day moving average; however, Trasactions Rebound is more positive, indicating that the Bit network application side is trying to recover active status.

Ecological Analysis

encryption blue-chip assets continued to expand: Ethereum Eco is still in a recovery phase, with Transactions, new Address, and active Address starting to rebound. Layer 2 remains the same. Solana’s active Address continues to expand, with new Address reaching the third highest in history, and active Address reaching the second highest in history.

On July 18, the Hong Kong Monetary Authority announced the list of Hong Kong Stable Coin sandbox, and 5 companies including coin Chain Technology under JD and Standard Chartered Bank’s Circle Coin were allowed to participate, showing Hong Kong’s continued determination to promote the mainstream application scenarios of encryption assets.

EMC BTC Cycle Indicator

EMC BTC Cycle Metrics indicator is 0.5, awaiting further recovery of the Bull Market signal interruption.

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EMC Labs was founded in April 2023 by encryption asset investors and data scientists. It focuses on research in the blockchain industry and investments in the Crypto Secondary Market. With industry foresight, insights, and data mining as its core competitive strengths, EMC Labs is committed to participating in the thriving blockchain industry through research and investment, and promoting the well-being of humanity through blockchain and encryption assets.

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