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 second week of August!

1. Bitcoin Chart/Ethereum Chart

Last week, following the market crash known as ‘Black Monday,’ Bitcoin experienced a sharp rebound. According to Binance, the price of Bitcoin initially dropped to $49,000 before surging to over $62,000. However, it has since slightly declined to around $59,000.

From a technical analysis perspective, Bitcoin achieved a short-term rebound by surpassing the 7-day moving average, though it has yet to break through the 25-day moving average. Technical experts believe that if Bitcoin fails to surpass the $64,000 mark, the downtrend is likely to persist. The short-term resistance level is anticipated to be $62,500, while the support level is analyzed to be around $54,500.

Bitcoin spot ETFs saw an outflow trend last week. However, as reported by Farside Investor on the 8th (local time), Bitcoin spot ETFs shifted to a net inflow of $194.6 million. This occurred despite a significant net outflow of $182.9 million from Grayscale’s GBTC.

In terms of net inflows, BlackRock’s IBIT led with $157.6 million, followed by WisdomTree’s BTCW with $118.5 million, which notably achieved its highest net inflow to date. Additionally, Fidelity’s FBTC ($65.2 million), Ark Invest’s ARKB ($32.8 million), and VanEck’s HODL ($3.4 million) also recorded net inflows, indicating a positive trend.

BTCUSDT Chart (Binance)

Spot Bitcoin ETF flows (The block)

Ethereum, which had its worst week last week, dropped to $2,110 according to Binance prices before rebounding to its current level of $2,716.

Over the past week, JumpCrypto has continued transferring funds to Ethereum exchanges, unstaking 11,500 ETH (~$29 million) and moving it to Jump Trading’s address. Despite this, the rebound in Ethereum’s price is attributed to the inflow of funds through BlackRock’s spot ETF.

According to Farside Investor, BlackRock’s Ethereum ETF has attracted approximately $910 million in just three weeks since its launch, and it is expected to reach $1 billion in net inflows soon. While BlackRock’s Ethereum ETF is rapidly growing, Grayscale’s Ethereum ETF (ETHE) remains the largest product under management, with over $4.9 billion in assets despite recent outflows of $2.3 billion. If the outflows from Grayscale continue at the current pace, coupled with the inflows to BlackRock’s ETF, Ethereum could see additional upside.

ETHUSDT Chart (Binance)

Spot Ethereum ETF flows (The block)

Bitcoin dominance has recently declined from 57.59% last week to 56.92% this week. The primary driver of this decline is Ripple’s rebound following the SEC lawsuit. Additionally, the inflow of funds into Ethereum spot ETFs has limited the increase in Bitcoin dominance, keeping it below 57%.

The upward trends in Ethereum and Ripple are likely to extend to other altcoins, potentially further weakening Bitcoin’s dominance.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

Last week, the yield on the US 10-year Treasury fell below 3.7% but has since rebounded to 3.909%. This rebound was driven by a lower-than-expected number of new US jobless claims, which has weakened the influence of Sham’s Law, traditionally linked to the unemployment rate. While this development has reduced the likelihood of a recession, the rebound has not been strong enough to suggest a reversal of the broader trend

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The US dollar index increased slightly, rising from 103.084 last week to 103.118 this week, in tandem with the rise in US bond yields. The most significant recent influence on the US dollar index has been Japan’s monetary policy. Following Japan’s rate hike last week, global markets experienced a downturn, prompting the Bank of Japan to announce that no additional rate hikes are expected in the near term. With Japan’s monetary policy now a less immediate factor, the US dollar is likely to remain relatively stable, driven by a preference for safe-haven assets amid global uncertainty.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The Nasdaq 100 index has rebounded to the 18,500 level after dipping below 18,000 last week. This adjustment, from over 20,000 to under 18,000, spurred short-term buying, particularly in profitable technology stocks. However, the increase has not been substantial enough to indicate a trend reversal, necessitating further monitoring.

US100 (TradingView)

• Gold Futures

Gold futures prices have risen from $2,433 last week to $2,455 this week. The potential for an interest rate cut, combined with international instability due to the threat of conflict with Iran, are major factors contributing to the increasing likelihood of a rise in gold prices, which is viewed as a safe-haven asset. This situation may also positively impact Bitcoin and Ethereum, which are increasingly considered relatively safe assets within the virtual asset market.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-score increased slightly from 1.586 last week to 1.659 this week. Given the modest rise, it is difficult to classify the current market as overheated. The current MVRV Z-score indicates that the market is within a neutral range.

• Indicator explanation: The MVRV Z-score measures the difference between Bitcoin’s market capitalization and its realized value, divided by the standard deviation. It serves as an indicator to assess whether Bitcoin’s market capitalization is overvalued or undervalued. A score below 0 suggests that Bitcoin is significantly undervalued, while a score of 6 or higher, as seen during the all-time high (ATH) in 2021, indicates an overheated market.

Bitcoin: MVRV Z-Score(Glassnode)

• aSOPR

The aSOPR indicator, which fell from 0.9964 to 0.9388 during last week’s crash, has rebounded to 1.004. An aSOPR below 1 suggests that the bull market has not resumed. However, if it drops significantly below 0.95 in the short term and then rises above 1 again, this could signal a substantial rebound.

• SOPR, or Spent Output Profit Ratio, is calculated by dividing the price at which Bitcoin was previously received by the price at the time of transfer. A SOPR below 1 indicates a bearish market, while a value above 1 indicates a bullish market. The aSOPR is an adjusted version that excludes short-term transactions (within one hour), providing a more accurate representation.

Adjusted SOPR (Glassnode)

• Open Interest

The open interest in Bitcoin perpetual futures declined sharply from $16.01 billion last week to $13.59 billion this week. This decline is largely attributed to a significant liquidation of futures positions due to rapid price fluctuations. During the same period, the estimated leverage ratio for perpetual futures decreased from 0.201 to 0.170, indicating that the likelihood of further sharp price movements due to additional liquidations is relatively low. If the open interest in perpetual futures falls below $13 billion, it may present an opportunity to consider entering a position, given the relatively small position size compared to the current market liquidity.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin has been flowing into exchanges consistently for the past seven weeks. Although the inflow volume is decreasing, there have been instances, such as last week, where continued inflows have led to significant market corrections. For Bitcoin’s price to rise, the current trend of inflows must shift to outflows.

Bitcoin: Exchange Net Position Change(Glassnode)

• Number of Whale Wallets

The number of whale wallets holding more than 10,000 BTC remains low. The current trend suggests that the number of these whale wallets is continuing to decrease rather than increase.

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

5. Last Week’s Major News

• Ripple legal dispute resolution boosts expectations for XRP ETF approval

According to Coinpedia on the 8th (local time), the recent ruling clarifying that XRP itself is not a security has significantly increased the likelihood of approval for an XRP spot ETF, providing positive news for investors. With the legal issues surrounding XRP’s retail sales now resolved, there is growing anticipation of new financial opportunities within the cryptocurrency sector. The market is optimistic that XRP will soon be included in a spot ETF application, potentially opening up new investment avenues and strengthening XRP’s position in the financial industry.

• Concerns over ‘Iranian retaliatory attack’ in volatile stock market; Gold and Oil Prices rise

Tom Lee, co-founder of market research firm Fundstrat, has identified Iran’s potential retaliatory attack as the most significant risk factor for the U.S. stock market this week, as reported by MarketWatch on the 12th (local time). Lee emphasized that “The impact of Iran’s retaliatory attack on the stock market cannot be predicted in advance,” urging investors to exercise caution in light of the heightened volatility.

• Harris gains momentum while Trump leads in average of 111 opinion polls

Vice President Kamala Harris, now the Democratic presidential candidate, is showing a clear upward trend in various opinion polls. According to an average of 111 recent national polls conducted by the American political media outlet The Hill and the election website DecisionDeskHQ on the 12th (local time), Vice President Harris holds a slight lead over former President Donald Trump, with a 47.6% approval rating compared to Trump’s 47.3%. This marks the first time Vice President Harris has surpassed former President Trump in the national poll average since becoming the Democratic presidential candidate.

6. Major economic events

Major economic events last week

Last week, the U.S. Services Purchasing Managers’ Index (PMI) was released below expectations, heightening concerns about a potential economic downturn and exacerbating the decline in investment assets. However, crude oil inventories reported on Wednesday fell short of forecasts, indicating robust energy demand. Additionally, new unemployment claims came in lower than anticipated, weakening the relevance of Sham’s Law, which is based on the unemployment rate, and contributing to a market rebound.

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

This week’s major economic events

This week, the U.S. monthly Consumer Price Index (CPI) will be released, with particular attention on Thursday’s new unemployment claims data, which is considered a critical indicator. If these claims exceed expectations, Sham’s Law could once again come into play, increasing the likelihood of asset price volatility.

Major Economic Events for the 2nd week of August 2024 (Investing.com)

Summary

Positive Indicators: Open interest, estimated leverage ratio, spot ETF fund flows, gold prices

Negative Indicators: Exchange inflows and outflows, aSOPR, number of whale wallets

Overall Review: Most crypto assets, including Bitcoin, have rebounded since last week’s crash. However, the recovery has not been substantial enough to indicate a shift to an upward trend, suggesting that market weakness may persist. Nonetheless, with risk indicators such as unfilled contracts remaining low, the likelihood of another sharp decline appears limited. Altcoins, including Ripple, have begun to show an upward trend, and while maintaining a balanced position in Bitcoin, there is potential for a cyclical rise in major altcoins