Trend analysis from data: The rebound logic and potential risks of the crypto market

null 1. Weekly Market Review (12/20-12/26)

Last week, the market showed a downward trend, and our previously emphasized technical support level of $85,000 proved effective. After BTC touched a low of $84,500 last Friday, this week began a rebound. From daily and weekly charts, after a sustained decline, the $85,000 support was validated. Over the weekend, the market maintained a rebound rhythm, overall showing a oscillating recovery pattern.

2. Short- to Medium-term Data Changes Affecting the Market This Week

2.1 Stablecoin Capital Flows

This week (12/20-12/26), the weekly issuance of stablecoins was -$326 million, continuing the outflow trend, but the scale of outflows significantly narrowed. Compared to last week’s negative issuance of -$824 million, the daily average negative issuance decreased from -$117.7 million to -$46.5 million, with overall capital flow increasing by 60% week-over-week. The main market remained volatile without a sustained decline, which aligns with the weakening stablecoin outflows.

2.2 ETF Capital Flows

Bitcoin ETF net outflows further increased this week, with a weekly net outflow of $664.37 million, up $374.72 million from last week. Combining daily fund flow data, current ETF daily net outflows show no signs of weakening. Although BTC prices rebounded, this can only be considered a short-term technical rebound. For a trend reversal, a return to net inflows in Bitcoin ETFs is a core prerequisite.

2.3 OTC Premiums and Discounts

This week, the OTC premium rates for USDT and USDC slightly declined, with USDT at a 97.86% premium and USDC at 98.36%, both at their lowest levels this year. This phenomenon reflects continued market sentiment weakness, insufficient willingness for OTC bottom-fishing, and some signs of capital outflows.

2.4 Ethereum ETF

This week, Ethereum ETF net outflows amounted to -$139.53 million, significantly less than last week’s net outflow of $587.5 million. ETH prices showed oscillation this week without a sustained decline, which echoes the narrowing ETF outflows. Maintaining this trend could provide strong support for ETH rebounds.

2.5 Total Cryptocurrency Market Capitalization

The total crypto market cap fell back to around $3 trillion, precisely testing the weekly EMA100 moving average. The indicator has shown signs of weekly oversold conditions. Historically, since 2021, weekly oversold signals have often preceded rebounds. From a technical perspective, the market has rebound potential.

3. Mid-term Data Changes Affecting the Market This Week

Bitcoin Holder Distribution and URPD

Regarding Bitcoin holder distribution, the proportion of addresses holding 100-1K BTC increased from 25.813% to 25.951%, showing slight accumulation; addresses holding 10K-100K BTC decreased from 11.341% to 11.146%, indicating some reduction; addresses holding 1K-10K BTC increased slightly from 20.972% to 21.022%, showing minor oscillation.

In terms of BTC chip structure, the accumulation in the $83,300-$87,100 range increased from 9.03% to 9.93% of total supply, an increase of 0.9 percentage points. Notably, at around $87,100, accumulation reached 3.15% of total supply, with significant turnover compared to last week. The intense battle between bulls and bears at this level suggests it may become a strong support zone.

4. Altcoin Market Analysis

This analysis covers market overview, secondary market trends, and primary market data, providing a comprehensive view of the current altcoin market dynamics.

4.1 Market Overview

Altcoin Market Cap

This Friday, TOTAL3 (market cap excluding BTC and ETH) reached $822.3 billion, up 1.95% week-over-week. BTC traded within a narrow range around $88,000, with low volatility. Despite continued rebounds in US stocks and A-shares, BTC did not follow the trend, while commodities performed strongly. From capital flow perspective, BTC remains in the lower ranks within traditional financial allocations, likely maintaining a range-bound pattern due to lack of significant new capital.

On-Chain TVL Overview

Total on-chain TVL reached $117.5 billion, up 1.29% week-over-week, showing a oscillating trend. ETH staking remains stable, trending upward with oscillations, reflecting relatively solid confidence among long-term holders.

Stablecoin Market Cap and Exchange Reserves

Stablecoin total market cap is $286 billion, down 0.28% week-over-week, with fiat-backed stablecoins experiencing an outflow of $800 million. The current crypto market shows disconnection from traditional financial markets, with relative weakness and a cautious atmosphere. Exchange stablecoin balances slightly declined this week, with no stablecoin inflows during BTC rebounds, indicating the market has not fully stabilized.

Altcoin Index and Market Sentiment

This Friday, the altcoin index was 16, with major altcoins remaining low and oscillating. Market sentiment index improved to 27 from last week, with some altcoins showing activity, but overall enthusiasm remains low.

Altcoin Market Summary

The overall altcoin market showed oscillation, with some tokens rising against the trend. Benefiting from marginally improved stock market sentiment, short-term crypto sentiment and downside space are somewhat supported. Leading performers are mainly small-cap MEME coins and high-recognition hot tokens, but the trend lacks sustainability and cannot form sector-wide momentum.

Top-out Indicators and Altcoin Hotness

This week, no top-out alarms were triggered, but the proportion of BTC holders increased significantly, approaching warning thresholds, warranting caution for short-term corrections. Regarding funding rates, most altcoins still have negative rates, but the overall trend is marginally improving, indicating a slight recovery in market speculation.

4.2 Secondary Market Trends

4.2.1 Altcoin Strength Analysis

BTC market share this week was 65.76%, up 0.1% week-over-week, maintaining high-level oscillation. Mainstream pairs like SOL/BTC, ETH/BTC, BNB/BTC declined slightly, remaining in oscillating or downward channels. The relative weakness of altcoins against BTC has not changed significantly.

4.2.2 Market Liquidity

In terms of sector performance, there was divergence this week. RWA and PerpDEX sectors led gains, becoming market focal points. These sectors align with long-term market development trends and continue to attract capital. Institutional funds, such as BTC and ETH ETFs, continued to outflow this week, with no signs of stabilization; data firm Bitmine did not make related purchases, indicating low institutional participation.

4.3 Primary Market Data Analysis

4.3.1 Status of Major Public Chains

This week, the TVL of the four major public chains increased slightly, but the growth lagged behind price increases. ETH TVL rose from $67.2 billion to $68.1 billion, up 1.48%; SOL and BSC TVL remained stable at $8.3 billion and $6.4 billion respectively; BASE TVL increased from $4.2 billion to $4.4 billion, up 4.76%, showing relatively strong performance.

4.3.2 On-Chain Data Analysis

On-Chain Asset Flows

This week, USDT issuance was high, USDC saw significant outflows, and CEX funds continued large-scale withdrawals, indicating short-term market liquidity remains tight. Regarding DeFi bridge assets, ETH chain experienced the largest net inflow, while ARB chain saw the most outflows. Overall, fund flows were modest, and market volatility quickly narrowed.

On-Chain User Activity and Speculation

User activity on-chain was generally moderate but showed marginal improvement. DEX protocol revenue, active users, and trading volume increased slightly week-over-week, but overall activity remains low, with limited gains, and market speculation is still in a recovery phase.

On-Chain Prosperity Index

Based on the changes in TVL across the four major chains and on-chain data, a weighted on-chain prosperity index (out of 100) is calculated, with the following ranges:

Extreme Prosperity: 80 points and above

Uptrend: 60-79 points

Recession: 50-59 points

Bear Market: 30-49 points

This report’s data is compiled and edited by WolfDAO. For questions, please contact us for updates.

Written by: WolfDAO( X: @10xWolfdao)