The Weekly Report summarizes key indicators and recent events in the crypto world that professional traders are closely monitoring. This report and other relevant information are first shared via the official League of Traders Telegram channel.

Here are our notes for the fourth week of March!

1. Bitcoin Chart/Ethereum Chart

Bitcoin’s price temporarily dropped from $67,000 to $60,770 on Binance before recovering to $66,780. Bitcoin spot ETFs, which have been driving the price up this year, have seen a decline as funds have reversed their direction from net inflows to net outflows, but the outflows have slowed and Bitcoin’s price has somewhat rebounded. Last week’s ETF outflows were mostly from the Grayscale Bitcoin Spot ETF (GBTC), with some speculating that the recent outflows are due to Genesis Trading, the now-bankrupt crypto lender, selling the GBTCs it was holding to redeem customer assets.

If the outflows from the spot ETF turn into inflows and the price breaks through resistance near 69k, the price of bitcoin could attempt a new all-time high, while on the downside, 61k could become a support line.

BTCUSDT Chart (Binance)

The price of Ethereum on Binance dropped from $3,588 to $3,056 before recovering and now sits at around $3,440. Ethereum may not be trending well against Bitcoin in the short term, as there are security issues surrounding an Ethereum spot ETF, with the SEC investigating the Ethereum Foundation. However, the trend is likely to be upward in the long term, as the supply of Ethereum has been declining since October last year, and even if the Ethereum spot ETF is not approved in May this year, the favorable news is still around.

ETHUSDT Chart (Binance)

Bitcoin dominance fell slightly from 53.49% to 53.35%. L1 altcoins, such as Solana and Sui, were the strongest performers as they held their prices firm. Bitcoin family coins such as Dogecoin and Bitcoin Cash also benefited from Coinbase’s futures rollout issues, which led to a slight decline in Bitcoin dominance. However, as Bitcoin’s halving date approaches, it is not out of the question that Bitcoin dominance could rise to the upper end of the range near 55%.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

The US Treasury rate fell from 4.300% to 4.210% this week. Market rates have stabilized on the downside as Fed Chairman Powell said in a press conference that “the policy rate appears to be at the peak of this rate hike cycle” and that “slower inflation or weaker employment could increase the pace of rate cuts.” However, there are still concerns about the timing of rate cuts as U.S. employment remains robust and inflation data is not weakening.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The US Dollar Index rose from 103.463 to 104.316 this week. The US Dollar Index rose as the US 10-year Treasury yield fell, while the Eurozone also signaled interest rate cuts. This was also driven by the fact that economic data from the US remains strong and US stocks, the leading dollar-denominated asset, rose. However, it is not typical for US Treasury rates and the dollar index to move in opposite directions. Some believe that the US Dollar Index has risen too much in a period of falling interest rates in the US, so the Dollar Index may move in a re-coupled manner with interest rates.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The US100 hit a new all-time high this week, closing above 18,300, up from 17,850 last week. Assets such as stocks rose as the Federal Reserve forecasted three rate cuts this year, with tech stocks such as Nvidia and Alphabet leading the index. The Nasdaq 100 is likely to continue its rally to new highs as long as expectations of rate cuts persist.

US100 (TradingView)

• Gold Futures

The price of gold futures temporarily rose above 2200 from 2152, then fell back and is now at 2170. The correction was small compared to the rise in interest rates, so our bullish call last week was valid. The price of gold futures is likely to break into new highs and continue to rally.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-score decreased from 2.83 last week to 2.69 this week, which is not a bad trend as the overheating phase is resolved. The current MVRV-Z score could be interpreted positively as there could be more upside after the overheating is resolved.

• Indicator explanation: The MVRV-Z-score is a measure that determines whether Bitcoin’s market cap is overvalued or undervalued by dividing the difference between Bitcoin’s market cap and realized cap by the standard deviation. If the MVRV Z-score is below 0, Bitcoin can be considered to be undervalued. In the overheated market that reached the All-Time High (ATH) in 2021, scores of 6 or higher were shown.

Bitcoin: MVRV Z Score (Glassnode)

• aSOPR

The aSOPR has spiked from 1.068 to 1.353 this week, with a significant increase. Additionally, last week’s correction saw the daily reading dip below 1 for the first time since November 2023. In the past, excessive peaks above 1.17 have been followed by more corrections, so we should be wary of a short-term pullback and watch to see if the daily aSOPR could rise above 1 again.

• aSOPR is short for Adjusted Spent Outfit Profit Ratio, a value obtained by dividing the price of received bitcoin in the past by the price at the time of transmission. When SOPR is less than 1, it indicates a downtrend, and when it is above 1, it indicates an uptrend. aSOPR is a more accurate value that removes meaningless transactions within the hour for adjustments.

Adjusted SOPR (Glassnode)

• Open Interest

Bitcoin’s open interest exchange-traded perpetual futures decreased from $16.12B to $15.65B this week, showing signs of relieving the overheating to some extent. However, the exchange-combined estimated futures leverage ratio remained virtually unchanged at 0.201 to 0.202, suggesting that new money is flowing out of the futures market rather than into it.

Outstanding Open Interests by Exchanges (Glassnode)

Combined estimated leverage ratio of exchanges (Glassnode)

4. On-chain data

• Exchange inflows and outflows

While Bitcoin spot ETFs are experiencing net outflows, Bitcoin positions on exchanges continue to be dominated by outflows. Based on historical data, large outflows of Bitcoin from exchanges have been accompanied by an increase in the price of Bitcoin over the medium to long term, so exchange Bitcoin outflows could be positive for the price of Bitcoin going forward.

Bitcoin: Exchange Net Position Change (Glassnode)

• Number of Whale Wallets

The number of whale wallets that hold 10k+ Bitcoin is at the same level as last week, not yet decreasing from the increase in early March which suggests that many whales are still holding Bitcoin. However, if the number of whale wallets holding 10k+ Bitcoin decreases while Bitcoin is at its current price, the current price at 67k may act as resistance going forward.

Number of Bitcoin wallets holding 10K or more (Glassnode)

5. Last Week’s Major News

• MemeCoin ‘SLERF’ surpasses Ethereum DEX daily trading volume on first day of launch

SLERF, a Solana-based meme coin, has surpassed the daily trading volume of Ethereum’s decentralized exchange (DEX) on its first day of trading. Citing data from DexChecker, Coindesk reported on Monday that SLERF, which launched on February 18, saw more than $2.7 billion in trading in a single day. More than 130,000 investors made more than 800,000 trades. On Radium, a Solana-based exchange, more than $1.7 billion of SLERF was traded, according to CoinGecko. SLERF is a sloth-themed meme coin that became famous on X (formerly Twitter) after a developer’s mistake caused $10 million worth of tokens to be burned.

• SEC investigates Ethereum Foundation, “ETH security verification”

The U.S. Securities and Exchange Commission (SEC) is reportedly investigating the Ethereum Foundation. According to Cointelegraph, the SEC launched an investigation into the Ethereum Foundation as part of its efforts to verify the securitization of Ethereum (ETH) on Tuesday. Several US companies that have done business with the foundation have also received requests from the SEC for transaction documents and financial records. The investigation is expected to clarify the definition and regulatory scope of ETH.

• Coinbase begins trading three types of futures, including Dogecoin

Coinbase’s derivatives exchange will begin trading futures for Dogecoin (DOGE), Litecoin (LTC), and Bitcoin Cash (BCH) starting next month. According to The Block, Coinbase reported to the U.S. Commodity Futures Trading Commission (CFTC)on Tuesday that it will launch cash-settled monthly futures contracts for these coins. Coinbase emphasizes that the products comply with CFTC Rule 40.2(a). If an exchange complies with the CFTC regulations on its own, it can launch new products without waiting for direct approval from the CFTC.

6. Major economic events

• Major economic events last week

Looking at macroeconomic indicators from the US, inflation in the US seems to be elusive. Fortunately, Fed Chairman Powell has reassured the market that inflation is back on track, stating that January’s higher Consumer Price Index and the price indexes of Personal Consumption Expenditures were seasonally adjusted, adding that he has strong confidence that inflation is returning to the 2% target. The Fed’s dot plot also met market expectations for the number of rate cuts this year, with a consensus of three cuts.

Major Economic Events for the 3rd week of March 2024 (Investing.com)

This week’s major economic events

This week will see the release of the US Core Consumer Price Index, followed by another speech from Chairman Powell. It will be interesting to see if the existing sentiment for rate cuts this year is maintained.

Major Economic Events for the 4th week of March 2024 (Investing.com)

Summary

Positive indicators: U.S. bond rates, MVRV Z-score, Exchange inflows and outflows

Negative indicators: US Dollar Index, aSOPR

Overall Review: Bitcoin suffered a major correction last week as Bitcoin spot ETFs saw outflows, but the price of Bitcoin recovered as the Federal Reserve’s expected interest cuts matched market expectations. With U.S. Treasury rates stabilizing and good news on the horizon, such as Bitcoin’s halving, the correction could be used as an opportunity to buy more crypto. However, there are also signs of a short-term correction, such as a spike in aSOPR, so it’s important to note that there could be a temporary pullback.