Market Sentiment and on-chain Data Analysis

Investor Sentiment Indicator

Recent market investment sentiment is relatively optimistic. The Fear and Greed Index is currently at 74, in the greed range. This index experienced a significant decline in June, dropping below 30 at the beginning of July, reaching its lowest level in nearly a year, and then showing a significant rebound.

Futures Market Trends

CME Bitcoin contract positions have been continuously increasing since July 5, until a decrease began on July 23. After an important figure spoke at a Bitcoin-related conference on July 28, positions increased again.

This reflects that funds were bullish on the market after July 5, while some investors chose to reduce their positions as July 23 approached resistance levels and important meetings. After key figures spoke, Bitcoin experienced a brief decline but quickly rebounded, indicating limited selling pressure, with some funds becoming bullish on the market again and entering.

The CME Bitcoin leveraged fund's short position increased by 103 contracts (515 Bitcoins) last week. Typically, when this indicator rises, arbitrage funds are also increasing their positions on the spot side; when the indicator drops to a turning point, it often signals that a price increase may occur after short positions are closed.

Exchange Margin Data

The Bitcoin long margin positions on a certain trading platform reached a low on March 16 (corresponding to the market high) and then started to accumulate long positions. Currently, the positions are still at a high level, but the growth has begun to flatten.

Stablecoin Supply Metrics

The stablecoin supply oscillator ( SSRO ) bottomed out on July 9, falling below the lows of August-September last year, indicating a sharp decline in market participation enthusiasm. However, this also formed a turning point, leading to a subsequent rebound. This relatively low position may provide better rebound conditions for altcoins.

Bitcoin Holder Behavior Analysis

The proportion of Bitcoin held by long-term holders has continued to decline during the main upward wave from December 2023 to April 2024, indicating that long-term holders are continuously selling. Since April, Bitcoin has entered a wide oscillation range, and long-term holders have stopped selling and are inclined to continue holding.

The unrealized net profit and loss metric for Bitcoin long-term holders is currently still operating in the green zone and has not yet entered the blue zone (above 0.75). Referring to past cycles, this metric may need to enter the blue zone and operate for a period of time before forming the peak of this round of market.

When the unrealized net profit and loss of short-term Bitcoin holders approaches 0 or is below 0 during a bull market, it often forms a relative phase bottom. In 2024, there have been two instances below 0, the most recent being from late June to early July. On July 15, this indicator recovered to above 0, and referencing the trend from last September, a subsequent upward trend may form.