Bitcoin Weekly Observation (7.15~7.21): Strong inflow of funds, BTC is expected to completely escape the shock zone

Written by: 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.

Capital inflows in July are reversing the decline of the past two months, coupled with the factors of US interest rate cuts and elections, BTC has once again entered a strong channel

Market Week

BTC has rebounded strongly for two consecutive weeks, reaching a maximum of 6.8 Above 10,000 US dollars, it finally recorded a weekly increase of 12.68%. It once again created the largest increase in the past 20 weeks after last week, reversing BTC's volatile downward trend.

This week, in the short term, it stepped back on the 7-day moving average, and multiple moving averages crossed golden crosses, forming a new ascending channel. The weekly 7-day line crossed the 14-week moving average, and the moving average began to turn upward. Since reaching the all-time high in March, the market has been undergoing shock and adjustment for nearly 20 weeks. We expect that the market is expected to completely get rid of the shock box and return to $73,000 within the most optimistic month.

ETH rose 8.89%, the trend was weaker than BTC, SOL rose 24.94%, the Altseason Indicator indicator turned over the 30-day moving average, and many sectors began to strengthen.

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

Federal Reserve and Economic Data

In the past two weeks, the Federal Reserve has continued to dovetail, and investment banks have been optimistic about an interest rate cut in September. Radicals believe that September may drop by 50 basis points, or cut interest rates three times this year. This setting of the tone is the real turning point for interest rate cuts. All parties in the market have begun to take action to reprice various targets. The US dollar index fell to as low as 103.65 this week. Gold prices fell slightly, falling back to $2,400.

In terms of U.S. stocks, the previously strong Nasdaq and S&P 500 experienced corrections of 3.65% and 0.71% respectively, while the Dow Jones rose slightly. After the expectations are settled, it is expected that the turmoil will continue for a while before entering a new trend.

Another macro factor that cannot be avoided is the US election. After experiencing the shooting incident and Biden voluntarily withdrawing from the election, Republican presidential candidate Trump is infinitely close to winning the November election. Crypto-friendly Trump will attend the U.S. Bitcoin Conference next week. The market is optimistic that the United States will further support the development of crypto assets in the next four years.

Financial aspects

Continuing the trend from last week, the inflow of stablecoin channels is accelerating, with inflows exceeding US$1.594 billion for the whole week, the highest single-week inflow since May. The inflows of USDT/USDC at the same time were 1.458 billion and 136 million respectively. USDT ended its sluggish state and inflowed heavily, becoming one of the driving forces for price increases this week.

The ETF channel maintained net inflows for all five trading days this week, with a total inflow of US$814 million, which was lower than last week's 1 billion but still maintained a high volume, which was particularly difficult under the severe adjustment of the Nasdaq. The two major channels inflowed more than 2.4 billion throughout the week. The rise of BTC has solid support, and it also shows that funds recognize the current price of BTC.

Chip supply

With the recovery of market liquidity, long-term investors reduced their holdings by 17,800 chips, short-term investors reduced their holdings by 22,200 chips, and the exchange newly accumulated 34,600 chips, which is a new high in the past month or so.

The profit margins of short-term investors across the market have returned to positive values, but only 4% profit. This may be related to the fact that BTC fell too fast to 53,500, market confidence was severely hit, and short-term investors' "buying the bottom" behavior is extremely limited. According to past rules on the chain, short-term investor selling pressure often occurs when profit margins exceed 30%. Based on this calculation, US$70,000 may generate short-term profit selling pressure.

This week, the BTC price has returned above the miners’ shutdown price. Miners still reduced their holdings by 9,800, but the computing power continued to rebound, and the weekly line continued to rise, showing the strong confidence of the miners.

BTC on-chain data

New addresses and activity rebounded slightly, hovering near the 30-day moving average; however, the Trasactions rebounded more actively, which means that the application side of the Bit Network is trying to return to active status.

Ecological Analysis

Encrypted blue-chip assets have continued to expand as a whole: Ethereum Eco is still in the recovery period, and Transactions, new addresses, and active addresses have begun to rebound. Layer2 homomorphism. Solana’s active addresses continue to expand, with new addresses hitting the third-highest level in history and active addresses hitting the second-highest level in history.

On July 18, the Hong Kong Monetary Authority announced the Hong Kong stablecoin sandbox list. Five companies including JD.com’s Bichain Technology and Standard Chartered Bank’s Yuan Coin were allowed to participate. This shows Hong Kong’s determination to continue to promote the mainstream application scenarios of crypto assets. .

EMC BTC Cycle Metrics

EMC BTC Cycle Metrics indicator is at 0.5, a bullish signal pending further recovery from the interruption.

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