Week 49 On-Chain Data: Decrease in Long-Term Holder Participation Rate, but Overall Positive Trend Still Intact

Original Article Title: "Has the Percentage of Long-Term Holders Dropped Below 50%? Is the Market Becoming Unstable? | WTR 12.9"
Original Source: WTR Research Institute

Weekly Recap

This week, from December 2nd to December 9th, the price of Blood Orange reached a high near $104,088 and a low close to $90,500, with a fluctuation range of about 13%. Looking at the distribution of chips, there was a significant amount of chip transactions around 95,000, providing some support or resistance.

• Analysis:
1. 60000-68000 approximately 1.91 million coins;
2. 90000-100000 approximately 1.35 million coins;
• The probability of not breaking below 87,000 to 91,000 in the short term is 70%;
• The probability of not breaking above 100,000 to 105,000 in the short term is 60%.

Important News Highlights

Economic News

1. November Non-Farm Employment added 227,000 people, higher than the expected 200,000 people, with the previous value revised from 12,000 to 36,000 people.

2. November Unemployment Rate at 4.2%, in line with the expected 4.2%, higher than the previous 4.10%.

3. The probability of a 25 basis point rate cut by the Fed in December has risen to 85%, up from 67% before the employment report was released.

4. Ketu Macro Analyst Stephen Brown: The CPI and PPI reports next week could be the final set of data to hinder the Fed's December rate cut, with weaker than expected growth in core inflation in November leading to a higher likelihood of a 25 basis point cut over pausing the cuts.

5. Fed Bostonic: The decision of the December meeting is not preset, future data will be crucial, and flexibility is needed.

6. Fed Governor Waller expects to continue cutting rates in the next year and leans towards supporting a rate cut in December. Fed's Daley: To keep the economy in a good state, policy adjustments must continue, and interest rates should decline.

7. HSBC Bank expects the S&P 500 index to reach 6,700 by the end of 2025 (currently at 6,089 points).

8. JPMorgan expects gold to rise to $3,000 per ounce next year, with an average price of $2,950 per ounce in the fourth quarter of 2025 (currently at $2,636 per ounce).

9. The market perceives Trump's choices for senior positions as "quite market-friendly," including appointing investor Scott Bessent as Chief Financial Officer and appointing cryptocurrency enthusiast Paul Atkins as the head of the U.S. Securities and Exchange Commission.

10. Deutsche Bank strategist Parag Thatte stated that long-term trends may continue to drive new capital inflows, which will boost the U.S. stock market next year.

Crypto Ecosystem News

1. Trump has appointed PayPal co-founder David Sacks as "White House Artificial Intelligence and Cryptocurrency Czar," where David will help shape policies for the current U.S. government in the areas of artificial intelligence and cryptocurrency, which are crucial for the future U.S. economy.

2. Analysis suggests that David Sacks is expected to lead efforts to fulfill Trump's campaign promise to ease regulations on the cryptocurrency industry. This position is likely to provide a direct channel to the White House for cryptocurrency advocates and serve as a liaison between Trump, Congress, and federal agencies related to digital assets (including the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission).

3. Mizuho Securities strategist Shoki Omori pointed out that for further upward movement from here, other cryptocurrencies should catch up first, and the altcoin market may experience a rally.

4. On December 5, 2024, the Financial Times of the UK publicly apologized to readers for its negative coverage of cryptocurrency over the past 14 years. With BTC recently surpassing $100,000, many readers believe that the Financial Times needed to apologize for its long-standing skeptical stance.

Long-Term Outlook: Used to observe our long-term situation; Bull Market/Bear Market/Structural Change/Neutral Status
Intermediate Exploration: Used to analyze the current stage we are in, how long this stage will last, and what circumstances we will face
Short-Term Observation: Used to analyze short-term market conditions; as well as the occurrence of certain events in a certain direction and under certain assumptions

Long-Term Outlook

• Long-term investors' positioning structure
• Crypto ETF net reserve position
• Large exchange net positions

(Long-Term Investors' Positioning Structure Chart Below)

Long-term investors' chip ownership has dropped to below 50%. Historically, this generally indicates a signal that we are already in the market's middle or midfield. Caution is required in the later stages of the market.

(Chart Below: Crypto ETF Reserve Net Flows)

From the perspective of external markets, newcomers still show interest in crypto.

Looking at the accumulation of net flows, there is still no weakening.

(Chart Below: Whale Exchange Net Flows)

From the perspective of internal whales and institutions, the current market buying pressure is starting to weaken relatively.
The internal momentum is not as strong as before.
Internal buying pressure is starting to decrease, while external funds still show buying interest.

Mid-term Exploration

• Price Level Cost Structure
• ETH Exchange Circulating Supply Ratio
• BTC Exchange Trend Net Flows
• Network Sentiment Positivity
• Incremental Model

(Chart Below: Price Level Cost Structure)

The $100,000 price level is currently a challenging profit-taking pressure zone in the market, with significant selling pressure behavior whenever the market approaches this price range.
The upward momentum in the market may be weakening near this price level.

(Chart Below: ETH Exchange Circulating Supply Ratio)

ETH's circulating supply ratio is still rising, which may lead to more intense internal market volatility.

(Chart Below: BTC Exchange Trend Net Flows)

Currently, BTC's liquidity on exchanges is low, indicating that BTC users may have a certain level of wait-and-see attitude without significant directional movements (selling or buying).

(Chart Below: Network Sentiment Positivity)

Network sentiment is still declining, indicating that the current market enthusiasm has dropped to its lowest this month.
With reduced participation enthusiasm, there may be some liquidity loss in the market.
Simultaneously, with decreasing participation, the market may enter a more watchful state.

(Chart Below: Incremental Model)

Recent inflows in the incremental model have slowed down slightly.
The current level of heat may have reached a certain stage, and the difficulty of the subsequent market trend may increase.
In the absence of incremental flows, if the market enters a phase of stock game, we may see a revival of the market pace in Q2 and Q3 of 2024.

Short-term Observations

• Derivative Risk Factor
• Option Intent-to-Trade Ratio
• Derivative Trading Volume
• Option Implied Volatility
• Profit-Loss Transfer Amount
• New and Active Addresses
• Blood Orange Exchange Net Long Position
• Yuppie Exchange Net Long Position
• High Weighted Sell Pressure
• Global Buying Power Status
• Stablecoin Exchange Net Long Position
• Off-chain Exchange Data

Derivative Rating: Risk Factor in the red zone, Derivative Risk increasing.

（See Derivative Risk Factor chart below）

After maintaining a fervent market for nearly a month, the market will now see an increased magnitude of derivative liquidations.

（See Option Intent-to-Trade Ratio chart below）

The put-to-call ratio is at a moderately high level, with trading volume at a median level.

（See Derivative Trading Volume chart below）

As mentioned consistently for the past week, the market rapidly experiences volatility when derivative trading volume is low. This week, derivative trading volume has returned to a low level, indicating the brewing of the next fluctuation.

（See Option Implied Volatility chart below）

The Option Implied Volatility has seen a slight increase.

Sentiment Rating: Neutral

（See Profit-Loss Transfer Amount chart below）

The market's positive sentiment blue line resembles a wave, and the positive sentiment of this market impact approaching the $100,000 mark is weaker compared to the last impact. Overall, positive sentiment has decreased this week, and it is expected that the market will soon see the next push towards $100,000.

（See New and Active Addresses chart below）

New and active addresses are at a high level.

Spot and Sell Pressure Structure Rating: BTC in a significant outflow state, ETH in an overall moderate outflow.

（See Blood Orange Exchange Net Long Position chart below）

Continued significant outflow of BTC exchange net flows.

（See Etheruem exchange net flows chart below）

Moderate outflow of ETH overall.

（See High Weighted Selling Pressure chart below）

The market remains strong, and the appearance of high weighted selling pressure has not impacted the market.

Buy Power Rating: Global buy power and stablecoin buy power remain steady compared to last week, both in a positive rebound state.

（See Global Buy Power Status chart below）

Global buy power is relatively steady compared to last week.

（See USDC Exchange Net Flows chart below）

Stablecoin buy power remains steady compared to last week, in a positive rebound state.

Off-chain Transaction Data Rating: Willingness to buy at 94000; Willingness to sell at 100000.

（See Coinbase Off-chain Data chart below）

Willingness to buy at a price range near 90000-94000;
Willingness to sell at a price near 100000.

（See Binance Off-chain Data chart below）

Willingness to buy at a price range near 90000-94000;
Willingness to sell at a price near 100000.

（See Bitfinex Off-chain Data chart below）

Willingness to buy at a price near 90000;
Willingness to sell at a price near 100000.

Summary of the Week:

Summary of News:

1. Since the U.S. election last month, investors have poured nearly $140 billion into U.S. stock funds, as the market believes Trump's tax cuts and reform measures will stimulate economic growth.

2. U.S. employment data has slowed, and a further reduction in the U.S. benchmark interest rate, i.e., a rate cut, is expected this month.

3. Looking at the market performance over the past few months, the market is showing signs of recovery.

In the outlook for the upcoming year, U.S. policy under President Trump is relatively accommodative for the capital markets, including the crypto market. Coupled with factors related to artificial intelligence and multidisciplinary technology, it should support further economic growth.

Investment Rating for the Next Year: Overweight on U.S. Stocks, Crypto Still Relatively Bullish.

On-chain Long-term Insight:

1. Long-term hodlers' market share is starting to drop below 50%;

2. Crypto ETFs show that the external market still has a high interest in crypto investments;

3. Large-scale exchange transactions show that the internal market's willingness to buy has started to decline significantly.

• Market Tone: Internal buying is decreasing, while external buying continues.

On-chain Mid-term Exploration:

1. 100,000 is a price point with significant selling pressure;
2. ETH's circulation is increasing, raising on-chain volatility risks;
3. BTC users are relatively inclined to wait and see;
4. Current participation heat is decreasing;
5. There are slight signs of slowing incremental volume.

• Market Tone:
Wait and See
Internal sentiment is somewhat lukewarm, and the overall market may be entering a period of directional uncertainty characterized by a wait-and-see sentiment.

On-chain Short-term Observation:

1. The risk factor is in the red zone, with derivative risk increasing;
2. The number of new active addresses is high, indicating market activity is high;
3. Market sentiment rating: Neutral;
4. Overall, exchanges are seeing significant BTC outflows and moderate ETH outflows;
5. Global buying power and stablecoin purchasing power remain stable compared to last week, both showing positive recovery trends;
6. Off-chain trading data suggests buying interest at 94,000 and selling interest at 100,000;
7. There is a 70% probability of not breaking below 87,000 to 91,000 in the short term, with a 60% probability of not breaking above 100,000 to 105,000 in the short term.

• Market Tone:
The market's positive sentiment during this test of the $100,000 level is somewhat weaker than the last test, but overall, the market sentiment remains very positive. There may be a slight oscillation in the short term, so stay patient and wait for the next upward move.

Risk Disclaimer: The above content is for market discussion and exploration purposes only, and does not constitute investment advice; please treat it prudently and beware of market black swan risks.

This article is contributed content and does not represent the views of BlockBeats.