Market volatility intensifies, capital inflow slows down

Recent market growth signals and influx of funds have obscured some structural risks, and the market may be entering a phase of high-level volatility.

Main Observations

• The macro environment is warming: Trump's easing of trade rhetoric and cooling inflation have boosted market sentiment.
• Capital momentum weakens: The inflow of stablecoins and ETF funds continues to decline, with a noticeable lack of new buying.
• Price and momentum divergence: Bitcoin prices are rising, but capital inflows, off-exchange premiums, and ETF funds are all cooling down, increasing the risk of a pullback.

Market Environment Analysis

Trade fluctuations and CPI data have caused short-term market turmoil, while the surge in corporate bonds supports the stock market but exacerbates the U.S. debt crisis. The combination of high leverage among consumers and businesses, along with Federal Reserve policy constraints, is beginning to reveal systemic liquidity risks.

Capital Flow Analysis

External capital flow:

• ETF funds inflowed 609 million this week, with the inflow amount continuing to decline.
• Stablecoins increased by 877 million this week, with an average daily increase of 112 million, and the level of increase remains low.

On-chain sentiment indicator:

• The premium of stablecoins continues to decline underwater.

Mainstream Coin Market Structure

Bitcoin ( BTC ):

• Technical Analysis: The market is in a fluctuating upward range.
• On-chain chip distribution: chips over 100,000 US dollars are enhanced

Ethereum ( ETH ):

• The trend is weaker than BTC, and the ETH/BTC ratio has maintained fluctuations before breaking down this week, with funds continuously flowing back to BTC dominance.
• On-chain movements: The increase in active addresses may indicate that a phase of bottoming has been completed.

On-chain Data Analysis

1. Stablecoin capital flow: This week, the total amount of stablecoins has slightly increased to 211.256 billion, with an issuance of only 877 million, a significant drop compared to the previous period. The average daily issuance has decreased to 125 million, reaching a new low in nearly four weeks, indicating a noticeable slowdown in capital inflow. The slowdown in issuance may reflect that the market has entered a wait-and-see phase, with marginal liquidity weakening in the short term, necessitating vigilance against potential consolidation pressure.

2. ETF Capital Flow: The inflow of BTC ETFs has slowed for three consecutive weeks, with a net inflow of only 609 million this week, significantly reducing the marginal impact of funds. Although the price is still within the upward channel, it diverges from the underlying capital, posing risks of weak upward momentum and adjustments. If there is no significant recovery in ETF inflows and the issuance of stablecoins slows down, the market may enter a period of short-term fluctuations or technical corrections.

3. Off-exchange premium: This week's off-exchange premium continues to decline below water, forming a divergence with prices, indicating that the inflow of off-exchange funds is weakening and the market's new momentum is sluggish. This trend is consistent with the slowdown in the issuance rate of stablecoins and a significant decrease in ETF fund inflows, showing that the market is in a stage of stock game, lacking new driving forces.

4. URPD Analysis: This week's on-chain data shows that the share of Bitcoin in the range of $10,180 - $10,400 has increased by 1.72%, indicating that more BTC is being traded in this price range, and market consensus is gradually forming in this area. This accumulation of chips reflects strong support attributes for this range, but it may also become a short-term resistance zone.

5. Changes in the structure of wallet addresses:

• Large addresses in the 10k-100k range choose to reduce positions when prices rise, and buy back in small amounts when prices drop.
• 1k-10k addresses slightly increased their holdings during the upward trend but quickly reduced their positions at the peak.
• 100-1k addresses continue to steadily increase holdings, with no significant reduction in positions observed.

Overall, large capital is cautious, while small and medium-sized capital forms an important support for the current price range. The market is in a stage of observation and game playing.

Chart Pattern Analysis

The market is currently retreating after a surge on the 1-hour chart, testing the support level around $100,000. The current trading range has been sideways for nearly 8 days, overlapping in time with the previous two trading ranges. The 4-hour chart shows that the indicators have recovered, indicating the possibility of further upward movement. However, given the recent divergence in capital data, without significant positive news, it is likely that the momentum will fade after this surge.

Strategy Suggestions

Defense first, focus on BTC's $100,000 support and ETH's pullback rhythm, suitable for reducing positions in high Beta altcoins during rallies.