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 fourth week of July!

1. Bitcoin Chart/Ethereum Chart

Bitcoin experienced a significant increase from $60,000 last week to $68,000 this week. This upward trend follows last week’s attack on Republican presidential candidate Donald Trump. Additionally, the German government’s successful sale of Bitcoin without major market disruption has bolstered confidence that the market can handle the impending distribution of Mt. Gox Bitcoin bonds to general investors.

For the short term, Bitcoin surged by over 10% within a week before entering a period of stabilization. Should it maintain support above $65,000 at its current price, it could potentially resume its rally.

BTCUSDT Chart (Binance)

Capital inflows into spot exchange-traded funds (ETFs) have continued from last week, particularly through products offered by BlackRock and Fidelity. If other institutions, such as Ark Investment, also contribute to the inflow along with Bitcoin’s rise, it may further positively impact Bitcoin’s price.

Spot Bitcoin ETF flow (The block)

Ethereum also maintained its upward momentum, climbing from $3,200 last week to $3,500 this week. Notably, five Ethereum spot ETFs will be launched on July 23rd by the Chicago Board Options Exchange. The trading volume of these ETFs will be crucial, as it will influence whether Ethereum continues to rise or decline due to diminishing positive news.

ETHUSDT Chart (Binance)

Bitcoin dominance slightly increased from 55.08% last week to 55.46% this week. With the launch of the Ethereum spot ETF and the strong performance of major altcoins like Solana, Bitcoin’s dominance will likely remain stable or exhibit mixed trends rather than a significant increase.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

The US 10-year bond yield increased slightly from 4.229% last week to 4.268% this week, driven by a higher-than-expected US core retail sales index. If the upcoming US GDP report meets or falls short of forecasts, interest rates are expected to continue their downward trend. However, if the GDP surpasses expectations and other economic indicators also show strength, treasury yields may rebound, reducing the likelihood of a September interest rate cut anticipated by the market.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The US dollar index rose modestly from 104.286 last week to 104.404 this week. The Japanese yen appears to be stabilizing and recovering from its weakness. Unless there are significant fluctuations in the Japanese exchange rate, the US dollar index is likely to move in tandem with interest rates this week.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

As anticipated last week, the Nasdaq 100 index is showing signs of peaking after surpassing 20,000. Global IT issues involving Microsoft have rekindled concerns about monopolistic practices among big tech companies. Additionally, negative comments from US presidential candidate Donald Trump about electric vehicle companies have adversely affected Tesla’s stock price. Given the substantial rise in big tech stocks this year, a market correction seems likely to continue.

US100 (TradingView)

• Gold Futures

Gold futures prices exceeded $2,400 last week, challenging the $2,500 mark, but have since adjusted and are currently sitting around $2,380. The decline is primarily attributed to the rise in US bond yields and the strengthening dollar. Despite this adjustment, global investment bank JP Morgan has raised its gold price targets for this year and next, predicting new highs of $2,500 and $2,600, respectively.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-score rose from 1.812 last week to 2.220 this week. Exceeding the inflection point of 2 suggests a high likelihood of an upward rally based on the MVRV Z-score.

• 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 slightly decreased from 1.022 last week to 1.018 this week, but the weekly indicator consistently remains above 1, indicating a continuing upward trend.

• aSOPR is short for Adjusted 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 perpetual futures open interest increased from $16.06 billion last week to $17.90 billion this week. During the same period, the estimated leverage ratio fell from 0.195 to 0.189, suggesting that new funds are entering the perpetual futures market. Given the relatively low leverage ratio, concerns about significant declines due to liquidation are minimal.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin holdings on exchanges have been steadily increasing over the last month, marking the largest exchange inflow in the past year. Traders are expected to capitalize on current price fluctuations to rebalance their assets. If this volume translates into profit-taking along with the distribution of Mt. Gox bonds, the market may experience a downturn.

Bitcoin: Exchange Net Position Change (Glassnode)

• Number of Whale Wallets

The number of whale wallets holding more than 10,000 Bitcoin has been decreasing since last week. As major miners sell Bitcoin and increase mining volume, the number of miner whale wallets continues to decline. If the miners’ selling trend concludes, it could positively impact the market.

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

5. Last Week’s Major News

• CBOE announces launch of five Ethereum ETFs on July 23

The Chicago Board Options Exchange (CBOE) has announced that five Ethereum spot ETFs will be launched on July 23. In a new issuance notice, CBOE revealed the launch date and detailed that it will manage most of the initial Ethereum ETF transactions. Trading is set to begin next week. The newly launched ETFs include the Fidelity Ethereum Fund, Franklin Ethereum ETF, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and 21Shares Ethereum ETF.

• Global IT crisis highlights risks of monopolistic structures

An unprecedented IT crisis on the 19th revealed the dangers of a hyper-connected society. Experts point out that the dominance of a few companies in the technology sector has created structural vulnerabilities, where even minor errors can cause widespread chaos. The incident stemmed from a conflict between cybersecurity company CrowdStrike’s software update and Microsoft’s Windows operating system, disrupting Microsoft’s Azure cloud service.

• Stablecoin market capitalization recovers to 2022 Bull market levels

On the 22nd, Cryptopolitan reported that the stablecoin market capitalization has rebounded to the same levels seen during the 2022 bull market. Stablecoins continue to play a crucial role in both derivative and spot markets. Recent data indicates that the market capitalization of stablecoins in circulation has increased by $15 billion over the past few weeks, reaching $165 billion. This growth suggests stablecoins have the potential to drive further market expansion.

6. Major economic events

Major economic events last week

Last week, data was released that negatively impacted inflation management in the United States, with core retail sales exceeding forecasts and crude oil inventories falling significantly. Consequently, U.S. Treasury yields rebounded. However, employment showed signs of weakening as the number of new unemployment claims fell below expectations, limiting the extent of the interest rate increase.

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

This week’s major economic events

This week, attention should be focused on the release of the United States’ second-quarter GDP and the Consumer Expenditure Price Index (PCE). If GDP falls below forecasts and the PCE shows stability, the likelihood of an interest rate cut after September may increase, potentially driving more funds into the virtual asset market.

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

Summary

Positive Indicators: MVRV Z-score, aSOPR

Negative Indicators: U.S. Treasury yields, U.S. dollar index, exchange inflows and outflows, number of whale wallets

Overall Review: As presidential candidate Donald Trump’s chances of being elected increase and the sale of Bitcoin held by the German government concludes, the virtual asset market continues to rise. However, there are concerns about on-chain indicators, such as the uncertain interest rate outlook and increasing exchange inflows. This suggests a mixed performance this week rather than a strong rally. Therefore, traders are advised to closely monitor whether the upward trend continues and to adopt a trading strategy that follows the prevailing trend.