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 first week of September!

1. Bitcoin Chart/Ethereum Chart

The price of Bitcoin has seen a significant decline, dropping from $64,000 last week to $57,600 this week. The cryptocurrency has remained weak since the second quarter of this year, with the $52,000 level anticipated to serve as a critical support point. Currently, there are no strong catalysts driving growth in the market, and spot ETFs are also experiencing outflows. To spark an increase in prices, fresh positive news is likely needed, and the upcoming U.S. presidential election in two months could play a role.

BTCUSDT Chart (Binance)

Spot Bitcoin ETF flows (The block)

Similarly, Ethereum’s price fell from $2,750 to $2,440 last week. Trading volumes and net inflows for Ethereum spot ETFs remain minimal compared to their initial launch. Additionally, Ethereum has faced inflationary pressures since April, with supply rising to 120.31 million. At present, there are no standout factors suggesting Ethereum will outperform Bitcoin. Improvements aimed at deflation within the network or significant capital inflows are necessary for a trend reversal.

ETHUSDT Chart (Binance)

Spot Ethereum ETF flows (The block)

Ethereum Supply(y-chart)

Bitcoin dominance has remained relatively stable, moving slightly from 57.51% last week to 57.48% this week. In the short term, the resistance level for Bitcoin dominance is expected to be around 58%. A rise in Bitcoin dominance could potentially trigger a broader market rally.

Bitcoin dominance chart (CoinMarketCap)

2. Major Economic Indicators

• US Bond Yields

Last week, the U.S. 10-year Treasury yield rebounded from 3.790% to 3.907%, driven by diminished expectations for a significant Federal Reserve rate cut of 50 basis points (bp) in September, as recession fears eased.

Experts now view a 25 bp rate cut in September as a near certainty. The CME FedWatch tool reflects a 70% probability of a 25 bp cut and a 30% probability of a 50 bp cut, with no expectation of the Fed holding rates steady.

US10YPrice Government Bond Rate (TradingView)

• US Dollar Index

The U.S. Dollar Index also rebounded, rising from 100.618 last week to 101.675, indicating renewed strength in the dollar.

The July Personal Consumption Expenditures (PCE) price index did not produce any significant surprises, confirming the ongoing slowdown in U.S. inflation and further supporting the disinflation narrative. However, the foreign exchange market’s response deviated from expectations. The Dollar Index extended its gains immediately following the PCE release, which is unusual since slowing inflation typically weakens the dollar. Market participants see this reaction as an effect of month-end market dynamics following the PCE index confirmation.

US Dollar Index (TradingView)

• US100 (Nasdaq 100)

The US100 index declined from 19,700 to 19,500, primarily due to a sharp drop following Nvidia’s earnings report. Volatility is expected to increase next week, influenced by the upcoming U.S. presidential debate and the Federal Reserve’s interest rate decision.

US100 (TradingView)

• Gold Futures

Gold futures slightly adjusted to $2,492 per ounce after surpassing $2,500 last week. The general consensus is that gold prices will continue to rally as a rate cut becomes increasingly likely. To accurately forecast gold prices, the pace and magnitude of U.S. interest rate declines must be monitored.

Gold Futures (TradingView)

3. Bitcoin Market Data

• MVRV Z-score

The MVRV Z-Score experienced a significant decline, dropping from 1.927 last week to 1.509 this week. This indicates that the previous overheating trend has subsided. For the MVRV Z-Score to approach its all-time high of 6, it would need to strongly exceed the 2.0 threshold.

• 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 decreased from 1.010 last week to 0.989 this week, falling below the critical value of 1. Given that the aSOPR has frequently dipped below 1 recently, it suggests that the current bull market may be undergoing a correction rather than continuing unabated.

• 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

Open interest in Bitcoin perpetual futures declined from $16.87 billion last week to $14.47 billion. Additionally, the estimated leverage ratio for perpetual futures decreased slightly from 0.192 to 0.186. While the reduction in open interest lowers the likelihood of a sharper decline, the current levels remain high compared to the beginning of the year, indicating that risks persist, and caution is advised against potential further drops.

Outstanding Open Interests by Exchanges (Glassnode)

Exchanges’ combined estimated leverage ratio (Glassnode)

4. On-chain data

• Exchange inflows and outflows

Bitcoin holdings on exchanges continue to surpass outflows, which could be a positive signal for a potential uptrend, though the outflows are not substantial.

Bitcoin: Exchange Net Position Change(Glassnode)

• Number of Whale Wallets

The number of whale wallets holding more than 10,000 BTC has rebounded slightly after reaching a low for the year, though the increase is not yet significant. This metric should be closely monitored; if the rebound in whale wallets continues, Bitcoin’s price could see a short-term recovery.

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

5. Last Week’s Major News

• Arrest of Telegram Founder Impacts TON Coin Negatively

On the 24th, French authorities unexpectedly arrested Telegram founder and CEO Pavel Durov. The official reason provided was that the arrest warrant was issued as part of a preliminary investigation into Telegram’s alleged failure to adequately monitor criminal activities on the platform. According to a source cited by AFP, the French police’s Office for the Prevention of Crimes against Minors (OFMIN) issued the warrant, suspecting Durov of being complicit in facilitating crimes such as fraud, drug trafficking, cyberbullying, organized crime, and terrorism. However, it is unusual for CEOs to be directly targeted for crimes committed on social media platforms like X, Facebook, or YouTube. This has led to speculation that Durov’s arrest may be politically motivated.

• Nvidia Beats Earnings Expectations, But Stock Plummets After Hours

On the 28th, Nvidia reported third-quarter revenue of approximately $32.5 billion, surpassing the average analyst estimates of $31.9 billion. However, this figure fell short of the $37.9 billion projected by some experts. Nvidia acknowledged facing production challenges and stated that it is implementing changes to improve manufacturing yield — the percentage of functional chips produced. Despite the earnings beat, Nvidia’s stock price plunged more than 3% in after-hours trading following the announcement.

• Solana’s Daily Transaction Fees Plunge

Daily transaction fees on the Solana blockchain have plummeted to their lowest level since early May 2024. According to a report from The Block on the 26th, Solana’s daily transaction fees dropped to $639,000 — a 65% decrease from the $1.83 million peak on the 8th of this month, and an 87% decline from the all-time high of $5.08 million on March 18. The sharp decline in transaction fees suggests a decrease in activity on the Solana network, with memecoin transactions being particularly affected.

6. Major economic events

Major economic events last week

Last week’s key economic indicators suggest that the economy remains robust, with GDP growth and a decline in new unemployment claims. As a result, the likelihood of a 0.5% rate cut appears to be diminishing. However, recession concerns persist, especially as the July Core Personal Consumption Expenditures (PCE) Price Index came in lower than expected, signaling a potential slowdown in consumer spending.

Major Economic Events for the 4th week of August 2024 (Investing.com)

This week’s major economic events

Attention should be focused on major U.S. employment indicators, particularly the non-farm payrolls and unemployment rate. An upward trend in the unemployment rate could increase the likelihood of a U.S. recession, potentially leading to fluctuations in U.S. Treasury yields.

Major Economic Events for the 1st week of September 2024 (Investing.com)

Summary

Positive Indicators: Exchange inflows and outflows

Negative Indicators: U.S. Treasury yields, U.S. Dollar Index, Bitcoin spot ETF fund outflows

Overall Review: The overall downward trend in virtual assets persists. While the risk level is not alarmingly high, it is premature to conclude that Bitcoin has reached its bottom. A conservative approach is advised, as further declines in the virtual asset market remain possible. A recommended strategy would be to maintain a neutral position, with plans to buy during an upward trend or in the event of a sharp decline.