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 January!

1. Bitcoin Chart/Ethereum Chart

Bitcoin dropped from approximately $96,000 last week to $93,847, falling below the key support level of $94,000. The decline is attributed to year-end profit-taking, portfolio rebalancing, and rising U.S. market interest rates. However, the shift in spot ETF fund flows to inflows is a positive signal. Whether Bitcoin finds support at the current price levels and manages to rebound will be crucial in determining the future trend.

BTCUSDT Chart (Source: Binance)

Spot Bitcoin ETF Flow (Source: The Block)

Ethereum (ETH) demonstrated a relatively strong performance compared to Bitcoin, increasing slightly from $3,360 to $3,423. Despite competition from networks like Solana, sustained inflows driven by spot ETFs highlight Ethereum’s growing value as an investment asset.

ETHUSDT Chart (Source: Binance)

Spot Ethereum ETF Flow (Source: The Block)

Bitcoin dominance fell from 58.74% last week to 57.65% this week due to sharp corrections in the altcoin market. However, Ethereum and Solana showed relatively stable performance. If the market enters an upward phase, altcoins are likely to rise alongside Bitcoin.

Bitcoin Dominance (Source: TradingView)

2. Key Economic Indicators

• U.S. Bond Yields

The U.S. 10-year Treasury yield rose from 4.53% to 4.62% last week. This reflects skepticism about rate cuts following the Fed’s dot plot announcement. Nonetheless, given the current lack of drivers for rate hikes, the upward trend in market yields may gradually ease.

U.S. 10-Year Treasury Yield (Source: TradingView)

• US Dollar Index

The U.S. Dollar Index (DXY) edged up from 107.944 to 107.985 last week. The dollar is expected to maintain its strength in tandem with interest rate movements, especially with the upcoming inauguration of Trump’s presidency, which emphasizes U.S.-first policies.

U.S. Dollar Index (Source: TradingView)

• US100 (Nasdaq 100)

The US100 index rose slightly from 21,406 to 21,470, encountering resistance despite the rise in interest rates. Although global markets lack viable alternatives to U.S. stocks, the high index levels warrant caution regarding potential corrections.

US100 (Source: TradingView)

• Gold Futures

Gold futures declined marginally, from $2,631 per ounce to $2,625, amid a sideways trend. Although gold prices have shown resilience against rising interest rates, further rate increases may push prices lower, necessitating close monitoring.

Gold Futures (Source: TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-Score dipped from 2.85 to 2.71, exhibiting a typical pattern during corrections.

• 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.

MVRV Z-Score (Source: Glassnode)

• aSOPR

The aSOPR metric rose slightly from 1.028 to 1.045, staying above 1, suggesting a continued upward trend. However, caution is advised if it drops below 1.

Indicator Explanation: SOPR (Spent Output Profit Ratio) calculates the ratio of Bitcoin’s selling price to its purchase price. Values above 1 indicate an upward market, while values below 1 suggest a bearish trend. aSOPR adjusts for insignificant transactions to provide more accurate readings.

aSOPR (Source: Glassnode)

• Open Interest

Open interest in Bitcoin perpetual futures increased slightly from $26.72B to $27.10B. Despite Bitcoin’s downtrend, the rise in futures investment indicates continued optimism among market participants. Estimated leverage ratio decreased slightly from 0.221 to 0.219 but remains high, suggesting inflows into perpetual futures markets.

Consolidated Perpetual Futures Open Interest (Source: Glassnode)

Estimated Futures Leverage Ratio (Source: Glassnode)

4. On-Chain Data

• Exchange Net Flows

Net outflows of Bitcoin from exchanges persist but have declined in volume. Continuous outflows, coupled with spot ETF inflows, are likely to positively impact Bitcoin prices.

Bitcoin: Exchange Net Flows (Source: Glassnode)

• Number of Whale Wallets

The number of wallets holding over 10K Bitcoin has stabilized, showing a slight increase, while wallets holding over 1K Bitcoin have significantly decreased but have stopped their downtrend. While this warrants close observation, the halt in the decline of whale wallets is a positive signal.

Bitcoin Wallets Holding Over 10K (Source: Glassnode)

Bitcoin Wallets Holding Over 1K (Source: Glassnode)

5. Last Week’s Major News

• Tether’s $10 Billion Profit Sparks Global Banks’ Entry into the Stablecoin Market

USDT issuer Tether is expected to record over $10 billion in net profits by the end of 2024. CEO Paolo Ardoino attributed this achievement to strategic investments in U.S. Treasury bonds, gold, and other securities. According to The Coin Republic on December 29th, Tether’s market value increased by $50 billion this year, reaching approximately $140 billion. This growth was driven by the rising demand for USDT alongside the price surge of cryptocurrencies like Bitcoin. With 109 million wallets holding USDT, Tether has solidified its position as the largest stablecoin issuer by market capitalization.

• **Bitcoin Analysts Predict $77K–$80K CME Gap Correction**

On December 29, NewsBitcoin reported that digital asset analyst Egrag Crypto predicted a potential drop in Bitcoin’s price to the $77,000–$80,000 range due to the CME gap. The CME gap refers to price differences that occur when Bitcoin futures trading on the Chicago Mercantile Exchange (CME) is paused over the weekend.

• **Will Do Kwon Be Convicted in U.S. Courts? The $3 Billion Bitcoin Issue at Stake**

Do Kwon, the key figure behind the Terra-Luna collapse, is being extradited to the United States. He faces eight charges from U.S. authorities. If convicted in U.S. courts, attention will be focused on the length of his sentence and the fines imposed. A key issue will also be the whereabouts of the $3 billion worth of Bitcoin held by the Luna Foundation Guard during the 2022 Terra-Luna crisis. According to The Wall Street Journal, Do Kwon is expected to undergo legal proceedings similar to those of Sam Bankman-Fried, who received a 25-year sentence following the FTX collapse.

6. Major Economic Events

Major economic events last week

In the U.S., no major macroeconomic indicators were released due to the Christmas holidays. However, the lower-than-expected initial jobless claims hinted at strong employment conditions. Additionally, a significant reduction in crude oil inventories raised concerns about potential inflationary pressures, which have been a primary driver of rising market interest rates.

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

This week’s major economic events

This week marks the start of the new year, with no major macroeconomic indicator releases scheduled. However, the previously released data on initial jobless claims and crude oil inventories have been driving up market interest rates. As such, it is crucial to closely monitor whether the U.S. economy remains robust. If the economy exhibits excessive strength, inflationary pressures could intensify, potentially exerting a negative impact on asset markets.

Major Economic Events for the 1st week of January 2025 (Investing.com)

Summary

• Positive Indicators: Spot ETF inflows for Bitcoin and Ethereum, aSOPR, exchange net flows

• Negative Indicators: U.S. bond yields, U.S. dollar index, open interest

Overall Conclusion: The year-end rally has stalled, with a continued downtrend. However, Ethereum and other key crypto assets show stability, supported by positive signals like spot ETF inflows. While risks remain high and major bullish catalysts are lacking, the Bitcoin halving cycle suggests the potential for a rebound post-correction in the new year.