Market Observation: Slowing Capital Inflow, High-Level Volatility Trend Emerging

Recently, the market has shown signs of growth alongside a surge in capital, but this also masks potential structural risks. The market may be entering a phase of high-level volatility.

Macroeconomic and Market Environment

The macroeconomic environment appears slightly warm, with Trump easing trade rhetoric and inflation cooling boosting market sentiment. However, the momentum of funds is weakening, with continuous declines in the inflow of stablecoins and ETFs, indicating a significant lack of new buying. In addition, the rise in Bitcoin prices is diverging from indicators such as fund inflows, over-the-counter premiums, and ETF funds, increasing the risk of a correction.

It is currently recommended to focus on defense, paying attention to the support around $100,000 for Bitcoin and the retracement rhythm of Ethereum. For high Beta altcoins, consider moderately reducing positions at high levels.

Trade fluctuations and CPI data have triggered short-term market volatility. While the surge in corporate bonds supports the stock market, it has also exacerbated the U.S. debt crisis. The combination of high leverage among consumers and businesses with the Federal Reserve's policy restrictions has begun to reveal systemic liquidity risks.

Capital Flow Analysis and Mainstream Coin Market Structure

In terms of external capital flows, ETFs saw an inflow of $609 million this week, but the inflow amount continues to decline. Stablecoins had an issuance of $877 million this week, with an average daily issuance of $112 million, which is at a low level. The offshore premium continues to decline, reflecting a cooling off of offshore sentiment.

The technical analysis of Bitcoin shows that the market is in a volatile upward range, with increased support above $100,000. Ethereum's performance is weaker than Bitcoin, with the ETH/BTC ratio breaking down this week, and funds continuously flowing back to Bitcoin dominance. On-chain data from Ethereum shows an increase in active addresses, which may indicate the completion of a phase of bottoming out.

The Impact of ADP Employment Data on Bitcoin Prices

Statistics show that when ADP data significantly exceeds expectations, the probability of Bitcoin rising within 7 days is about 94%, with an average increase of 6.8%. This may be because strong employment is seen as a signal of economic recovery, which reduces the market's concerns about recession.

However, even though the ADP data significantly exceeded expectations, the increase in Bitcoin remains relatively limited. Regression analysis shows that for every 1% exceedance of expectations, Bitcoin only rises by about 0.06% on average. This means that Bitcoin's price elasticity in response to a single macroeconomic indicator is relatively limited.

It is worth noting that some of the significant increases in Bitcoin are more derived from the resonance of the macro background or events within the cryptocurrency market itself, rather than the influence of a single indicator. Therefore, the ADP data can be seen as an auxiliary sentiment indicator, but its individual impact is insufficient to determine the direction of Bitcoin. The actual trend needs to be judged in conjunction with macro policy signals and events driven by the cryptocurrency itself.

On-chain Data Analysis

The total amount of stablecoins slightly increased this week to $211.256 billion, with an issuance of only $877 million, significantly down from the previous period. The average daily issuance dropped to $125 million, reaching a new low in nearly four weeks, indicating a clear slowdown in capital inflow. This may reflect that the market has entered a wait-and-see phase, with marginal liquidity weakening in the short term, requiring vigilance against potential consolidation pressure.

Bitcoin ETF fund inflows have slowed for three consecutive weeks, with only a net inflow of $609 million this week, significantly reducing the marginal impact of funds. Although the price is still within an upward channel, it has diverged from the underlying capital situation, indicating a risk of weakening upward momentum and adjustment.

The continuous decline of the premium/discount in the over-the-counter market is diverging from the price, indicating that the inflow of funds from the over-the-counter market is weakening and the market's new momentum is sluggish. This trend aligns with the slowdown in the issuance rate of stablecoins and the significant decrease in ETF fund inflows, signaling that the market is currently in a stage of stock game.

On-chain data shows that the proportion of Bitcoin holdings in the range of $101,800 - $104,000 has increased by 1.72%, reflecting that this range has strong support properties. However, the concentration of holdings in this position can also easily evolve into a fluctuation area or short-term resistance zone.

The change in the structure of holding addresses indicates a clear capital game: large addresses choose to reduce their holdings when prices surge and buy back slightly during pullbacks; medium-sized addresses slightly increase their holdings during the upward trend but quickly reduce their positions at the peak; small addresses continue to steadily increase their holdings. Overall, the attitude of large funds tends to be cautious, while medium and small funds constitute important support for the current price range.

Technical analysis shows that after a rise in the market at the 1-hour level, it has pulled back to test the support level around 100,000 USD. The current trading range has been sideways for nearly 8 days, and the indicators at the 4-hour level have been repaired, indicating the possibility of further upward movement. However, considering the recent divergence in funding data, without significant positive news, there may be a weakening of the upward momentum after this rise.