Table of Contents:

1. BTC Technical Analysis;

2. Overview of the Crypto Market, Quick Read on Weekly Popular Coins' Price Fluctuations/Fund Flows;

3. Spot ETF Fund Inflows and Outflows, ETH Inflow Scale Sets Weekly Record;

4. On-Exchange BTC Balances Hit Historical Low;

5. Interpretation of BTC Contracts and Altcoin Funding Rates;

1. BTC Technical Analysis:

In the past week, BTC experienced significant volatility, rising from around $93,578 to approximately $104,088, setting a new historical high, and then undergoing a substantial pullback, dropping below our previously anticipated support level of $91,000, before quickly rebounding to near our predicted resistance of $101,500. This week, it has started to pull back again to around $94,150, with the overall rhythm relatively consistent with the U.S. stock market.

The trend indicator on the 4-hour level has been showing bearish signals since last week's sharp decline, and it is currently testing near the ascending trend line, with the closing price temporarily above it. This is crucial for the future direction; if it holds, we may continue the recent overall oscillating upward trend; however, if it breaks down, it will continue to test our previously analyzed short-term support around $91,000, with mid-term support at around $87,000 and $85,000. The short-term resistance above is referenced at the recent high of around $100,420 and the historical high.

2. Overview of the Crypto Market, Quick Read on Weekly Popular Coins' Price Fluctuations/Fund Flows

In the past week, the crypto market, categorized by concept sectors, saw fund inflows concentrated in major areas such as the Avalanche ecosystem, Arbitrum ecosystem, Optimism ecosystem, and Solana ecosystem. Additionally, several tokens experienced significant rotational increases, such as BABYDOGE, CRV, MNT, ERGEN, and PEPE.

Moreover, it is important to note that the substantial net inflows in some concept sectors are partly due to large issuances of stablecoins. Data shows that in the past month, Tether has issued an additional 20 billion USDT on the Ethereum and Tron networks.

3. Spot ETF Fund Inflows and Outflows.

Data indicates that since Trump was elected President of the United States, investment directly targeting Bitcoin through U.S. exchange-traded funds (ETFs) has attracted significant fund inflows. Twelve related funds launched by issuers such as BlackRock and Fidelity have seen a cumulative net inflow of approximately $9.9 billion, with total assets growing to about $113 billion. This reflects a belief that Trump's positive attitude towards the cryptocurrency industry will drive the market towards prosperity. The event of Trump's election has had a significant impact on the cryptocurrency market, with substantial funds flowing into Bitcoin-related ETFs, indicating investors' optimistic expectations for the development of the cryptocurrency industry under Trump's administration, believing that his policies may favor market prosperity.

In the past week of trading, Ethereum spot ETFs performed notably, with a net inflow of $837 million, setting a historical weekly net inflow record. This indicates a surge in market enthusiasm for investing in Ethereum. However, Grayscale's ETHE saw net outflows, which may reflect a shift in some investors' attitudes or adjustments in investment strategies. The large net inflows into BlackRock's ETHA and Fidelity's FETH indicate that these two institutions' Ethereum ETF products have strong market appeal and investor recognition. Overall, the flow of funds reflects market participants' preferences for different cryptocurrency products and their judgments on market trends. However, it is important to note that the cryptocurrency market is highly volatile and uncertain, and investors should carefully assess risks when participating.

4. On-Exchange BTC Balances Hit Historical Low.

Data shows that Bitcoin balances on centralized exchanges (CEX) have hit a historical low, decreasing by more than 15,000 coins in the past seven days. The drop in Bitcoin balances on centralized exchanges to a historical low may signal several important shifts in the market. It indicates that investors are more inclined to hold Bitcoin for the long term rather than engage in short-term trading, which is often associated with increased confidence in the long-term value of the asset. Long-term holders are seen as a stabilizing force in the market, and their behavior reduces the inflow of Bitcoin into exchanges, thereby decreasing liquidity in the market. This trend may exacerbate the supply tightening of Bitcoin, as more Bitcoin is held rather than traded, which could exert upward pressure on prices if demand remains strong.

This phenomenon may be related to the increasing acceptance of Bitcoin as a store of value, especially in the context of rising global macroeconomic uncertainty. With increased fund inflows into Bitcoin ETFs and more companies like MicroStrategy incorporating Bitcoin into their balance sheets, Bitcoin's status as a mainstream financial asset is being strengthened.

5. Interpretation of BTC Contracts and Altcoin Funding Rates.

According to contract data, BTC contract funding rates have recently remained in a positive state, with long positions paying shorts, reaching a peak on December 5, close to the 12,000 level, at which time BTC also set a historical high.

In terms of altcoins, several altcoins such as HBAR, XLM, XRP, ALGO, and ADA saw significant price increases in the same week, with gains exceeding 250% within 30 days. The funding rates for perpetual futures contracts have risen to between 4% and 6% per month, reflecting an increase in leverage usage. High funding rates may indicate optimistic sentiment towards altcoins and further growth potential, but they also increase the risk for traders. For example, ALGO's price rose over 15% on Friday, reaching a two-year high, with open interest (OI) and total value locked (TVL) hitting historical highs, showing strong market interest and fund inflows for ALGO. However, if the weekly closing price falls below a certain key level, it may lead to a price correction.

Compared to major cryptocurrencies like BTC and ETH, the leverage usage in altcoins is more aggressive, contrasting sharply with their relatively mild leverage. For instance, Bitcoin's leverage reached an annual high, indicating greater volatility for BTC prices. The high leverage usage in altcoins may signal higher market risks and potential price corrections.

The significant rise in altcoins over the past month is the result of various factors, including market sentiment, fund flows, and increased leverage usage. While high funding rates and price increases may indicate optimistic sentiment towards these assets, they also suggest potential market risks.

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