EMC Bitcoin Weekly Observation (June 10-June 16): The waiting period for interest rate cuts may be extended, and there is a risk of adjustment in the

Written by: Shang2046

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Market supply and demand are fragile, and BTC is facing miner liquidation

Market summary:

The Fed’s interest rate meeting on June 12 and the US CPI data for May have indeed become the dominant factors in BTC’s trend last week. Stimulated by the downward trend of CPI data, BTC once again hit the $70,000 mark, but then fell rapidly due to the Fed’s hawkish remarks. BTC fell 4.32% for the whole week, with an amplitude of 7.44%.

The interest rate cut dot plot shows that most market expectations are that the interest rate cut will be postponed to the end of the year, with only one interest rate cut in 2024.

As a result, the US dollar index rebounded strongly to above 105. Affected by the performance and buyback of technology stocks, the Nasdaq became a safe haven for long funds, while other markets were repriced based on a rate cut.

If the rate cut is really extended to December as predicted, the volatility of the BTC market may continue. At this moment, $66,000 is the key point of the BTC price.

$66,000 is the managed shutdown price of the median mining machine (S 19 XP) in the United States, the worlds largest BTC mining market, which can be regarded as the beginning of the global miners clearing out.

In the past few rounds of bull markets, each halving was accompanied by the phenomenon of killing miners, that is, the halving of production capacity benefits caused miners to not only sell all the BTC produced every day to pay electricity bills and other rigid costs, but also sell part of their inventory of BTC. This often leads to the market falling into a series of declines in a short period of time, that is, clearing.

In this cycle, affected by the US BTC spot ETF, it broke through the high point of the previous cycle before the halving, setting a record high of $73,700. The market is generally optimistic that even if the income is halved, there will be no miner killing in this cycle.

But the market seems to better reflect the fairness of history. After 13 weeks of fluctuations between 60,000 and 70,000, miners have begun to clear out: last week, miners sold about 32 million US dollars a day, which is higher than the output value of 450 BTC per day. On-chain data shows that the amount of coins held by miners last week did not increase but decreased by about 1,000 coins.

If miners’ selling triggers more selling, a short-term decline may occur. However, as mentioned in the last weekly report, the average holding cost of short-term investors in the past five months will be strongly supported at $63,700.

Of course, support levels may also become pressure levels in a weak market, and selling caused by lack of confidence among short-term investors may trigger an effect similar to miners clearing out.

market structure:

Last week, stablecoins saw a total inflow of $313 million, while the US ETF channel saw a net outflow of $580 million. The entire market can be understood as a net outflow of funds.

The profit margin for short-term investors is only 4%. We have repeatedly emphasized that in a relatively bull market cycle, every time the market approaches the break-even line of short-term investors, the market tends to rebound.

The good news is that, in addition to a small amount of selling by miners, both long-term and short-term investors have slightly increased their holdings. Correspondingly, 8,400 coins have flowed out of centralized exchanges, showing a continuous accumulation of chips.

It is worth noting that Coinbase, the main BTC trading platform in the United States, has an outflow of 17,000 coins, showing the optimistic buying sentiment of American investors, especially institutional investors. On the contrary, the US spot ETF, which is mainly composed of retail investors, had a net outflow of US$580 million last week after just creating the second largest single-week inflow of US$1.8 billion, showing the characteristics of chasing up and selling down.

In terms of the inflow of US dollar stablecoins, the relatively stable state of the past month continued, with a net inflow of US$313 million, a slight increase from the previous month. However, it is still in a period of slowing growth in the past month.

In terms of buying volume on centralized exchanges, there was an accumulation of approximately US$5.8 billion, a slight increase from the previous month and basically unchanged.

EMC BTC Cycle indicator:

The EMC BTC Cycle on-chain data engine shows that the bull market accelerator signal has temporarily entered a dormant period, with an indicator strength of 0.25.

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