BTC Weekly Observations (7.15~7.21): Strong capital inflows, BTC is expected to break free from the consolidation zone

Author: Shang2046

The market, project, currency, and other information, opinions, and judgments mentioned in this report are for reference only and do not constitute any investment advice.

In July, the capital inflow is reversing the decline of the past two months, coupled with the factors of the US interest rate cut and the election, BTC once again enters a strong channel

Weekly Market Report

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's volatility.

This week, the short-term retracement of the 7-day moving average, the long-term moving average golden cross, formed a new rising channel. The weekly line crossed the 7-day line with the 14-week line, and the moving average began to turn upward. Since reaching a historical high in March, the market has been oscillating for nearly 20 weeks. We expect the market to completely break free from the oscillation range and return to $73,000 within the most optimistic month.

ETHpump8.89%, weaker than BTC, SOLpump24.94%, Altseason Indicator indicator crosses the 30-day moving average, longzone starts to strengthen.

In summary, the strong capital market in July reversed the decline of the previous two months, with an overall capital inflow of $3 billion in three weeks, 2.5 times the cumulative inflow of $1.2 billion in the past two months. The US ETF also showed a similar strong inflow.

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. Some aggressive observers believe that there may be a direct 50 basis point cut in September, or three rate cuts within the year. This adjustment marks the true turning point for rate cuts, prompting market participants to reprice various assets. The US dollar index fell to a weekly low of 103.65. Gold prices fell slightly, retracing to $2400.

As for the US stock market, the previously strong Nasdaq and S&P 500 saw pullbacks of 3.65% and 0.71% respectively, while the Dow Jones edged up. After the expectations are settled, it is expected that the volatility will continue for a while before entering a new trend.

Another unavoidable macro factor is the U.S. presidential election. After the shooting incident and Biden's voluntary withdrawal, the Republican presidential candidate Trump is getting closer to winning the November election. Trump, who is friendly to BTC, will attend the U.S. BTC conference next week. The market is optimistic about the further support for the development of encryption assets in the United States over the next four years.

Funding

Continuing the trend of the previous two weeks, the Stable Coin channel is flowing in at an accelerated pace, with a total inflow of over 1.594 billion US dollars for the week, the highest single-week inflow since May. USDT/USDC are flowing in at the same frequency, with 14.58 billion and 1.36 billion respectively. USDT, which had been sluggish, saw a surge in inflow, becoming one of the driving forces for pump in prices this week.

The ETF channel has maintained net inflows for all 5 trading days this week, with a total inflow of $814 million, which is lower than the $1 billion inflow from the previous week but still at a high level. This is particularly remarkable given the volatile adjustment of the Nasdaq. The two major channels have seen a total inflow of over $2.4 billion, providing solid support for BTC's pump and also demonstrating the market's recognition of the current price of BTC.

Chip Supply

With the recovery of market liquidity, long-term investors reduced their holdings by 17,800 coins, short-term investors reduced their holdings by 22,200 coins, and the exchange accumulated 34,600 new coins, a new high for the past month.

The profit rate of short-term investors in the entire market has returned to positive, but only 4% are profitable. This may be related to the too fast 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 on-chain pattern in the past, the selling pressure of short-term investors often appears when the profit rate exceeds 30%, and calculated by this standard, 70,000 US dollars may generate short-term profit selling pressure.

The price of BTC has returned to the level above the shutdown price of the Miner this week, and the Miner still reduced holdings by 9800 coins, but the Computing Power continues to Rebound, and the weekly line continues to rise, showing strong confidence on the Miner side.

BTC On-Chain Data

Newly added Address, slightly active Rebound, hovering near the 30-day moving average; however, TransactionsRebound is more active, indicating that the Bit network application side is trying to recover its active status.

Ecological Analysis

The overall expansion trend of encryption blue-chip assets continues: Ethereum Eco is still in the recovery phase, Transactions, newly added Address, and active Address are starting to rebound. Layer2 is homomorphic. Solana's active Address continues to expand, newly added Address hits a historical third high, and active Address hits a historical second high.

On July 18, the Hong Kong Monetary Authority announced the list of Hong Kong Stable Coin sandbox, allowing 5 companies including coin chain technology under JD.com and Standard Chartered Bank's Circle Coin to participate, demonstrating Hong Kong's determination to continue promoting the mainstream application of encryption assets.

EMC BTC Cycle Indicator

EMC BTC Cycle Metrics indicator is 0.5, indicating a pause in the Bull Market signal that needs further recovery.