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 February!

1. Bitcoin Chart/Ethereum Chart

Last week, the largest hacking incident in cryptocurrency history occurred. On the 21st, Bybit CEO Ben Zhou announced that approximately $1.5 billion worth of Ethereum had been stolen due to a hacking attack, with the North Korean hacking group Lazarus identified as the perpetrator. Bybit later announced on the 24th that they had acquired the stolen Ethereum through OTC purchases and loans, alleviating immediate bankruptcy concerns. However, since the hacker is acquiring Bitcoin through collateralized loans, there is a risk of selling pressure on both Ethereum and Bitcoin. Bitcoin dropped significantly from $96,000 last week to the $91,000 this week, showing signs of further decline after a brief consolidation. Additionally, Bitcoin spot ETFs have shifted to an outflow trend, and there are no apparent bullish catalysts within the cryptocurrency market.

BTCUSDT Chart (Binance)

Spot Bitcoin ETF flows (The block)

Despite the large-scale Ethereum hack at Bybit, Ethereum’s price initially remained relatively stable. However, after the news that Bybit had acquired Bitcoin through OTC purchases and loans, Ethereum’s price started to decline. Ethereum is currently undergoing a significant correction along with Bitcoin, with downside risk open to the previous low of $2,100, indicating continued high volatility. Furthermore, both Ethereum spot ETF inflows and outflows remain low, suggesting a lack of additional capital movement within the market. The possibility of further capital outflows should also be considered.

ETHUSDT Chart (Binance)

Spot Ethereum ETF flows (The block)

Bitcoin dominance has surged from 60.82% last week to 62.03% this week. Altcoins, which were in a recovery phase, declined again due to the Bybit hacking incident and Trump’s tariff policies, with most altcoins nearing their lowest levels in a year. Ki-Young Ju, CEO of CryptoQuant, stated that instead of an overall altcoin season, only specific altcoins may see gains in this market. Given the current market instability, Bitcoin dominance is likely to continue rising.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

The U.S. 10-year Treasury yield declined from 4.478% last week to 4.348% this week. This drop is attributed to increased uncertainty regarding U.S. tariff policies and growing concerns about an economic slowdown, leading to capital inflows into the bond market.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The U.S. Dollar Index (DXY) fell slightly from 106.729 last week to 106.698 this week. The decline in the 10-year Treasury yield is considered a contributing factor to the dollar’s weakness.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The US100 index surpassed 22,000 last week, reaching an all-time high, but has since seen a sharp decline. Negative macroeconomic indicators are identified as the main reason for this downturn. Notably, the preliminary U.S. Services Purchasing Managers’ Index (PMI) for February, released by S&P Global, recorded 49.7, falling below the critical threshold of 50. This signals a slowdown in the U.S. service sector, which accounts for 80% of the country’s economy, raising concerns about a potential recession and driving stock market weakness.

US100 (TradingView)

• Gold Futures

Gold futures reached $2,940 per ounce last week, approaching the $3,000 mark. Increased demand for safe-haven assets and technical buying driven by rising gold prices have fueled this uptrend. Given the impact of U.S. tariff policies, gold is expected to maintain its bullish momentum in the near term.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-Score dropped significantly from 2.53 last week to 2.30 this week, moving further away from the typically bullish threshold of 3. This suggests bearish market conditions and the need for a rebound.

• 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 slightly increased from 1.004 last week to 1.012 this week. While daily values remaining above 1 suggest the long-term uptrend is not entirely broken, its proximity to 1 raises concerns.

• 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

Bitcoin perpetual futures open interest slightly increased from $25.70B last week to $25.90B this week. Despite Bitcoin’s price decline, the sustained high open interest level signals significant market risk. Meanwhile, the estimated leverage ratio surged from 0.216 to 0.231, indicating reduced capital inflows into perpetual futures markets, potentially increasing volatility.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin’s net outflow from exchanges continues but is gradually decreasing. However, exchange-held Bitcoin has hit an all-time low, which can be seen as a positive signal from a supply perspective. Given the rising trend of OTC transactions and ETF spot holdings, a comprehensive analysis of overall liquidity is necessary rather than relying solely on exchange balances.

Bitcoin: Exchange Net Position Change(Glassnode)

• Number of Whale Wallets

The number of wallets holding 10K+ BTC has slightly declined, and the number of wallets holding 1K+ BTC also showed a temporary increase before decreasing again. This trend may indicate large investors exiting the market or adopting a more conservative approach due to recent uncertainties.

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

Number of Bitcoin wallets holding 1K or more (Glassnode)

5. Last Week’s Major News

• Bitcoin Hash Rate Decline

Bitcoin’s hash rate measures the total computational power miners contribute to the blockchain. A rising hash rate suggests an increase in mining activity and network security, while a decline may indicate miner capitulation due to reduced profitability.

• Bybit Fully Recovers Ethereum Losses After $1.4B Hack

Bybit CEO Ben Zhou announced that customer assets have been fully restored at a 1:1 ratio following the $1.4 billion Ethereum hack. He stated that a new audited proof-of-reserves report would soon be released, verifying the 1:1 asset ratio via a Merkle tree.

• Bitcoin Drops Sharply Amid Trump’s Tariff Pressure

Bitcoin fell over 6% as U.S. President Donald Trump reaffirmed his commitment to imposing tariffs on Canada and Mexico. This accelerated the decline amid already weakened market sentiment following the Bybit hack, with increasing economic uncertainty fueling fear in the market.

6. Major economic events

Major economic events last week

Last week, most major economic indicators fell short of expectations, signaling economic slowdown. Rising jobless claims suggest weakening U.S. employment, while the services PMI and existing home sales also missed forecasts, raising concerns that the U.S. economy may have peaked in the short term.

Major Economic Events for the 3rc week of February 2025 (Investing.com)

This week’s major economic events

This week, the U.S. GDP and initial jobless claims reports will be crucial. If inflation data declines sharply, recession fears may rise, negatively impacting investment markets.

Major Economic Events for the 4th week of February 2025 (Investing.com)

Summary

Positive Indicators: U.S. bond yields, gold futures, whale wallets

Negative Indicators: Bitcoin dominance, open interest, estimated leverage ratio, MVRV Z-Score, aSOPR

Overall Assessment: The market remains highly negative due to Trump’s tariff pressure the massive Bybit hack. However, liquidity injections from rate cuts and the strength of gold could provide support. A cautious stance with reduced position sizes is advisable for now.