The Weekly Report is our summary of 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 first week of April!

1. Bitcoin Chart/Ethereum Chart

The fund flow of the spot ETF, which has the greatest influence on the price of Bitcoin, has recently turned to inflow. Accordingly, the price of Bitcoin also rose from $66,780 last week to $70,820 this week. If it rises again, the previous 73k peak is expected to be resistance, and if it falls, the area around 69k, which was the area where it was moving sideways last week, is likely to be a support point.

As the Bitcoin halving is about 20 days away, there is a high probability that Bitcoin will get even stronger as it gets closer. CryptoQuant’s weekly analysis report noted a strong possibility of a Bitcoin supply shortage. In this case, there is a possibility that Bitcoin will rise more than expected and quickly reach new highs. However, caution must be taken as the increase in open interest and movement in mining volume, which we will see later, could cause short-term resistance.

BTCUSDT Chart (Binance)

The price of Ethereum rose from $3,440 to $3,600 in the past week, with some suggesting that Ethereum’s securitization issues lowered the odds of an Ethereum spot ETF being approved in May. However, since deflation is maintained in terms of Ethereum supply and spot ETDS continue to be maintained along with the Bitcoin halving issue, Ethereum will likely continue its long-term upward trend along with Bitcoin.

ETHUSDT Chart (Binance)

Bitcoin Dominance rose slightly from 53.35% to 53.56% this week, though it is not a significant change. As Bitcoin approaches its halving, it’s possible that Bitcoin Dominance could rise to the upper end of the range, around 55%.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

US bond interest rates remain unchanged from 4.210% to 4.204% this week. However, there is increasing concern in the market about a delay in the interest rate cut. In response to a question about the price index announced on the 29th, Chairman Powell said, “We don’t need to be in a hurry to cut [interest rates], emphasizing that we first need more certainty about prices. In addition, some experts say that the interest rate cut may be delayed due to the logistics disruption caused by the Baltimore bridge collapse that occurred on the 26th, leading to an increase in logistical costs.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The US Dollar Index rose slightly from 104.316 to 104.518 despite a drop in US government bond yields, which could be seen as a difference in the pacing of rate cuts in major economies. This bullish trend is likely to continue for some time, and in fact, it is only when the US starts cutting interest rates that the US Dollar Index will likely turn to the downside.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

US100 Nasdaq continued its upward trend, now in the 18300s, its historical high point. Recently, artificial intelligence and semiconductor stocks have been driving the Nasdaq stock market, but Dubravko Lakos-Buyas, chief global equity strategist at JPMorgan Chase, warned that the U.S. stock market’s five-month consecutive rally may face a correction. Lacos-Booyas went on to say the market is currently overestimating the current positive factors, taking into account strong earnings, expectations of a Federal Reserve interest rate cut, and even the possibility of former President Donald Trump being re-elected. In particular, he emphasized that we must prepare for the possibility of a sharp drop, noting that the surge in popular momentum stocks such as the ‘Magnificent 7’ is usually accompanied by a correction.

US100 (TradingView)

• Gold Futures

The price of gold futures has been rallying higher after breaking out to new highs last week as predicted. The rally has also been driven by global central banks, particularly in emerging markets, increasing their purchases of gold to diversify their holdings amid predictions of lower U.S. interest rates and growing uncertainty over the dollar. Weakness in Chinese equities and real estate is likely to continue driving the current rally in the near term as Chinese speculative capital flows into gold.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-score rose from 2.69 to 2.89 this week, which is in the middle of a bull market where overheating has been somewhat resolved, and is a positive zone for further gains.

• 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 temporarily spiked last week, reaching 1.353 before settling at 1.024 this week. It turns out that last week’s temporary spike was caused by the movement of a supply mined in 2010. While the aSOPR is showing signs of a bull market as it stays above 1, it’s important to note that it could see a temporary dip if the mined supply comes off the market as a selling supply.

• 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 aggregate open interest increased from $15.65B to $17.13B this week. However, the aggregate estimated futures leverage ratio decreased from 0.202 to 0.191, suggesting an influx of funds into the futures market. While the decrease in the estimated leverage ratio is positive, it is important to note that this is a temporary correction as the size of open interest remains near historical highs.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin positions on exchanges continue to show large outflows. According to blockchain tracking firm Whale Alert, several transactions were detected transferring large amounts of BTC from exchanges to self-custodial wallets. On March 25, one holder transferred 2,400 BTC (about $169.5 million) from Coinbase to an unknown new wallet, while another whale also transferred 4,797 BTC (about $339 million) from Coinbase to an unknown wallet. 10,000 dollars was withdrawn. We can look at this as a positive signal suggesting that the exchange has no intention to sell that volume.

Bitcoin: Exchange Net Position Change (Glassnode)

• Number of Whale Wallets

The number of whale wallets holding 10K+ bitcoin dropped significantly last Monday and is now near its lowest point in over a year. This could suggest that some whales are taking profits near the highs. However, the rising percentage of crypto held by whales with 10–100K bitcoin suggests that some of the whales that were already holding a large amount of bitcoin have increased their holdings. So, on a positive note, it could also mean that retail investors are joining the fray as the bull market of 2021 continues to pull back from the highs.

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

5. Last Week’s Major News

• Goldman Sachs “Hedge fund investor interest increases after approval of BTC spot ETF”

As the U.S. Securities and Exchange Commission (SEC) approved a Bitcoin (BTC) spot exchange-traded fund (ETF), Goldman Sachs’ hedge fund investors appeared to be interested in virtual assets. According to a Bloomberg report cited by Cointelegraph on the 24th, Max Minton, head of virtual assets in the Asia Pacific region at Goldman Sachs, said, “Many of our largest clients are active or exploring getting active in the space”. He added, “The recent ETF approval has triggered a resurgence of interest and activities from our clients.”

• EU: Ban on non-custodial wallets is fake news

The news that the European Union (EU) decided to ban anonymous cryptocurrency asset trading through non-custodial wallets has been revealed as fake news. According to The Block, the EU corrected the report saying, “The report on the 23rd that the EU decided to ban anonymous virtual asset trading in non-custodial wallets was a misunderstanding of the remarks of an EU lawmaker.” Freddie New, head of UK policy at Bitcoin Policy, a virtual asset analysis, and fact-checking organization, also said, “Wrong information spread quickly and caused confusion in the industry, but, according to the Anti-Money Laundering Regulations (AMLR) passed by parliament, non-custodial wallets are prohibited. “Anonymous transactions through this service are not illegal,” he explained. According to Patrick Hansen, EU Strategy and Policy Director at the Circle, the actual content included in AMLR is to “restrict anonymous transactions through virtual asset service providers that do not go through Know Your Customer (KYC).”

• GSR “20% possibility of Ethereum spot ETF approval in May”

A forecast was presented that lowered the possibility of an Ethereum (ETH) spot exchange-traded fund (ETF) being approved by May to 20%. According to The Block, GSR, a virtual asset market creation company, reduced the possibility of an ETH spot ETF being approved within May to 20%. This probability is significantly lower than the 75% previously suggested by GSR analyst Matt Kuhnke. Kuhnke announced this estimate based on the fact that the court ruled in favor of Grayscale regarding the approval of the Bitcoin spot ETF in January and that the ETH futures ETF was approved.

6. Major economic events

• Major economic events last week

Figures released last week, such as new home sales and an increase in crude oil inventories, suggested that inflation was easing. However, on Tuesday, Powell said in a speech hosted by the Federal Reserve Bank of San Francisco that “there is no rush to cut rates,” when asked to assess February’s underlying personal consumption expenditures price index, and that “the strong jobs report is buying the Fed more time to wait until inflation is closer to 2%.” Previously, the Fed held its policy rate steady for the fifth consecutive time at its March FOMC meeting on Tuesday, at a range of 5.25 to 5.50%, indicating that three rate cuts would occur this year, but Powell’s speech sent a message that the timing of rate cuts could be delayed. The markets did not react strongly to Powell’s comments that the timing of rate cuts could be delayed and did not show much volatility.

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

This week’s major economic events

This week, the release of the Eurozone’s Consumer Price Index and a speech from Chairman Powell will be key to watch. Recently, Powell has been making hawkish comments about not being in a rush to cut rates, and it will be interesting to see if he maintains that tone.

Major Economic Events for the 1st week of April 2024 (Investing.com)

Summary

Positive indicators: Bitcoin spot ETF inflows, gold futures, MVRV Z-score, perpetual futures estimated leverage ratio, exchange outflows and inflows

Negative indicators: US Dollar Index, Open Interest in Perpetual Futures, Number of Whale Wallets

Overall Review: Despite Powell’s hawkish comments last week, Bitcoin’s price recovered as Bitcoin spot ETFs saw inflows and exchanges reduced their Bitcoin holdings. In the medium to long term, as Bitcoin approaches its halving, the crypto market is likely to shift to a bullish trend. However, given the significant increase in open interest in the short term, as well as the recent shift of historical mining volume and the decline in the number of whale wallets, traders should be wary of temporary corrections. Rather than using leverage in the current sideways market, a trading strategy of observing and then following the short-term trend may be effective.