21st Week On-chain Data: In-depth Analysis of BTC's Current "Strong Hands Weak Hands" Pattern

Original Article Title: "From 'Alternative' to 'Necessary'?⸺In the Triad of Regulation, Institutions, and Macro ⻛storms, How is Crypto's 'Asset Narrative' Being Crafted?｜WTR 6.2"

Original Source: WTR Research Institute

Weekly Recap

For the week of May 26 to June 2, the highest price of Crystal Orange was near $110,718, with the lowest close to $103,068, and the price fluctuation reached about 6.19%. Observing the chip distribution chart, there was a significant amount of trading around 103,876 chips, providing some support or resistance.

• Analysis:

1. 60000-68000 approximately 1.21 million coins;

2. 76000-89000 approximately 1.28 million coins;

3. 90000-100000 approximately 1.41 million coins;

• It is highly probable that the short-term decline will not break below 95,000 to 100,000 with an 80% probability;

Important News Aspects

Economic News Aspect

1. At the start of the week, the US stock market opened with the Nasdaq up 0.11%, the SP 500 down 0.1%, the Dow Jones down 0.35%, and Gold up 2.6% to $3,376 per ounce.
3. South Korea will hold a general election vote on Tuesday. Regardless of the election result, the crypto industry will benefit. Both leading candidates, Lee Jae-myung and Yoon Suk-yeol, have promised to ease regulations and expand digital asset access channels. According to a South Korean bank, as of the end of last year, South Koreans held approximately $74.5 billion worth of crypto assets.

4. Federal Reserve Governor Waller stated that the impact of tariffs on inflation may reach its peak in the second half of 2025. Tariff measures will raise the US unemployment rate, and there are downside risks to the economy and job market, while inflation faces upward risks. The prospect of a rate cut depends on a slowdown in inflation and whether tariff measures are at the lower end of the range. The "good news" is that a rate cut is still possible later this year.
5. Derivatives market traders predict that the Federal Reserve will hold steady until September, followed by a "rapid and substantial rate cut."
6. Vincent Reinhart, Chief Economist at Mellon Investments, stated that by June next year, the market expects the benchmark interest rate to plummet by 100 basis points to the 3.25%-3.5% range. This view believes that the Federal Reserve will urgently shift towards growth support regardless of inflation concerns.
7. US banks warned that US tariffs have a more significant negative impact on the US economy and the dollar. Bank of America expects economic data to be relatively weak. JPMorgan Chase CEO Dimon warned that the US bond market will eventually crack.
8. The 1-year US credit default swap (CDS) rose to 52 basis points, nearing its highest level since 2023, as the debt ceiling crisis has never been truly resolved, raising the risk of a US government default.
9. The US dollar and US bonds depreciated, gold gained support to hit a new high, and crypto has also recently experienced multiple all-time highs.

Crypto Ecosystem News

1. The U.S. Securities and Exchange Commission (SEC) Corporate Finance Division issued a statement on May 29, 2025, clarifying that three types of staking activities in Proof of Stake (PoS) networks do not constitute a securities issuance and sale under the Securities Act of 1933 and the Securities Exchange Act of 1934. The three types of staking activities covered include node operators' own asset staking, self-custody staking, and custody institution customer staking.

2. New York City Comptroller Brad Lander rejected Mayor Eric Adams' proposal to issue municipal bonds with BTC support. Brad Lander, responsible for bond issuance along with the Mayor's Office of Management and Budget, stated that the city will not issue BTC-supported bonds during his tenure, citing cryptocurrency's volatility as insufficient to fund the city's infrastructure, affordable housing, or schools.

3. At the ETHGlobal Prague conference, Ethereum founder Vitalik announced that ETH will undergo a 10x L1 scaling within a year, followed by a period of consolidation before the next leap.

4. Simon Gerovich, CEO of the Japanese listed company Metaplanet, announced the purchase of 1088 BTC for approximately $117.3 million, bringing their total BTC holdings to 8888 BTC.

5. El Salvador increased its BTC holdings by 8 BTC in the past week, with current holdings totaling 6194.18 BTC.

6. SharpLink Gaming submitted Form S-3 ASR to the U.S. Securities and Exchange Commission, entered into an ATM sales agreement with A.G.P., allowing for the issuance and sale of up to $1 billion in common stock through A.G.P., with the majority of funds earmarked for acquiring ETH.

7. Analyst Rachael Lucas stated that the price of BTC is at a crucial psychological and technical juncture that may determine the success or failure of the bull market. Indicators such as RSI and MACD suggest a temporary weakening of bullish momentum, but the long-term outlook remains optimistic, potentially indicating the early stages of a new supercycle. The connection between BTC and the traditional financial markets is growing stronger, with increased sensitivity to economic data, central bank comments from the U.S. and Europe, and geopolitical risks.

8. Bloomberg reported that South Korea will hold a general election on Monday, and regardless of the election outcome, the crypto industry is expected to benefit. Both leading candidates, Lee Jae-myung and Yoon Suk-yeol, have promised to relax regulations and expand digital asset access channels. According to data released by Korean banks, the total value of crypto assets held by Koreans was approximately $74.5 billion by the end of last year.

9. Cointelegraph reported that investors are striving to adapt to the constantly changing macroeconomic environment. Cryptocurrency investors are closely monitoring the U.S. tariff negotiations and looking for any signs of a potential lasting trade agreement. Analysts predict that if such an agreement is reached, it could provide an opportunity for altcoins and BTC to rise.

9. Coinshares Weekly Report Data: Last week, the net inflows into digital asset investment products were $2.86 billion, bringing the seven-week total to $10.9 billion. ETH saw a significant increase in inflows last week, reaching $321 million.

10. As of May 31st, U.S. BTC Spot ETFs collectively held 1.2056 million BTC. The VanEck Bitcoin Trust led with holdings of 660.8K BTC, while Fidelity's FBTC and Grayscale's GBTC held 198K and 186.6K BTC, respectively.

10. Strategy increased its BTC holdings by 705 BTC last week. Strategy's founder, Michael Saylor, stated that their BTC acquisition strategy has no limit. As the price continues to rise, the difficulty of acquiring more BTC will increase exponentially, but Strategy will acquire BTC more efficiently.

11. GameStop CEO Ryan Cohen views BTC as a hedge against the devaluation of the U.S. dollar. He expressed that if BTC ultimately becomes a hedge against USD devaluation, it still has more room for growth.

11. In the past 12 June cycles of BTC, there have been 6 price increases and 6 price decreases. The largest price surge occurred in June 2016, with a monthly increase of 27.14%. The largest price decline occurred in June 2022, with a monthly decrease of 37.28%.

12. Cointelegraph reports that investors are striving to adapt to the evolving macroeconomic environment. Cryptocurrency investors are closely monitoring U.S. tariff negotiations, searching for any signs of a potential lasting trade agreement. Analysts predict that if such an agreement is reached, it could provide an opportunity for altcoins and BTC to rise.

Long-term Insight: Used to observe our long-term situation; Bull Market / Bear Market / Structural Change / Neutral State
Medium-term Exploration: Used to analyze the current stage we are in, how long this stage will continue, and what circumstances we will face
Short-term Observation: Used to analyze the short-term market conditions; as well as the possibilities of a direction and event occurrence under certain premises

Long-term Insight

• Illiquid Long-term Whales

• Long-term Participant Holding Structure Across Different Timeframes

• On-chain Spot Total Selling Pressure

• Exchange Platform Large Inflow-Outflow Net Headroom

• Crypto U.S. ETFs

• Long/Short-term Holder Cost Line

1. Supply-side Structural Analysis: Continuously Tightening Certainty

On-chain data shows that Bitcoin's supply side continues to exhibit a structurally tightening trend, which is the most significant and stable fundamental feature of the current market.

Strong Growth of Illiquid Supply:

(Below image of Illiquid Long-Term Whale)

The illiquid BTC supply controlled by long-term holders or whales continues to show strong growth momentum, and its growth rate has not exhibited significant decay recently. This indicates that BTC continues to shift from high-liquidity trading markets to low-liquidity long-term holding addresses, effectively reducing immediate sell pressure in the market.

1.2 Steady Increase in Long-Term Holder Share:

(Below image of Long-Term Participant Holding Structure at Different Timeframes)

The "realized cap" share of holders with holdings of over six months has slightly increased to 0.450. This means that close to half of the Bitcoin supply is held by conviction-driven, low-frequency trading long-term investors, forming the market's "ballast."

1.3 Confirmation of Large Net Outflows from Exchanges:

(Below image of On-Chain Spot Exchange Total Selling Pressure)

A recent small amount of BTC movement to exchanges indicates a potential increase in short-term trading activity or a partial liquidity need.

(Below image of Exchange High-Value Flow Net Inflows/Outflows)

Exchanges have once again experienced significant net outflows of large amounts of assets. This suggests that despite short-term bi-directional movements, the ultimate flow of large funds is still away from exchanges, further reinforcing the tightening of the supply side.

2. Demand-Side Dynamic Analysis: A Game of Overall Resilience and Marginal Sensitivity

Compared to the supply-side's tightening certainty, the demand side exhibits more complex and dynamic characteristics, with the structural demand for long-term allocation persisting but being easily disrupted by price, macro signals, and market sentiment in the short term.

2.1 Observation of ETF Fund Flow "Transition Period":

(Below image of Bitcoin's U.S. ETF)

Displaying a Bitcoin spot ETF, after experiencing an initial explosive growth, the recent fund inflow rate has significantly slowed down, almost approaching the zero axis at one point. Although the latest one-day data showed a slight positive turn, the magnitude was small and not sufficient to determine a trend reversal. Of course, on the news front, data such as IBIT's monthly inflow and total scale indicate that the top ETF products still demonstrate strong attractiveness, hinting that institutions have a certain resilience in long-term BTC allocation demand. The current ETF flow may be in a 'gear-shifting period' transitioning from 'FOMO-driven influx' to 'normalization, value-driven allocation.'

2.2 Support Effect of Short-Term Holder Cost Line

(Below Graph Long/Short-Term Holder Cost Line)

The average holding cost of short-term holders has steadily risen to $96,581. The current BTC price is still running above this cost line, meaning most short-term participants are in a profitable state, which to some extent reduces the risk of large-scale sell-offs triggered by panic or unwinding. This cost line constitutes an important dynamic psychological and technical support level in the current market.

2.3 Potential Catalyst of Macroeconomic Outlook and Hedging Demand: On the news analysis side, the improvement in PCE data has strengthened the Fed's rate cut expectations, providing potential liquidity support for risk assets like BTC. At the same time, concerns about the global economy (especially U.S. bond market risks, expectations of USD depreciation) may also enhance BTC's attractiveness as a store of value and risk hedging tool (as per the GameStop CEO's view). The realization and pace of these macroeconomic demand-driving factors will have a significant impact on BTC's demand side.

3. Market Equilibrium State Assessment: Rebalancing of demand under strong supply constraints and expectation game Comprehensive analysis of supply side and demand side, the current mid-term equilibrium state of the Bitcoin market can be defined as the 'rebalancing of demand under strong supply constraints and expectation game period.'

3.1 Dynamic Evolution of Supply-Demand Imbalance: The continued structural tightening on the supply side, along with short-term fluctuations in demand-side momentum, collectively constitute the main dilemma of the current market. In the backdrop of increasingly scarce supply, any positive demand-side signal (such as continued recovery of ETF flows, landing of macro bullish news) could be amplified to drive prices upwards. Conversely, if demand remains weak, prices may undergo sideways oscillation or moderate retracement to seek the supply-demand equilibrium point anew.

3.2 Interpretation of Internal Activities on Trading Platforms: A slight increase in on-platform transfer amounts, alongside large net outflows, may reflect the improvement in internal turnover rates and an increase in short-term trading activity. This provides both long-term buyers with absorption opportunities and may increase price volatility in the short term.

3.3 Identification of Key Inflection Points:

· Upside Inflection Point Signal: Continuous and significant net inflows of ETF funds; further clarity or early anticipation of rate cuts at the macro level (such as positive resolution of tariff issues); regulatory environment experiencing unexpectedly positive developments.

· Downside Inflection Point Signal: Continuous net outflows of ETF funds, or inflows well below expectations; price effectively dropping below the short-term hodler cost line ($96,581) and triggering a chain reaction; severe negative macro impact (such as unexpected inflation surge or sharp deterioration of tariff issues).

4. Conclusion and Outlook: Seeking Alpha in Certainty and Uncertainty

Based on the latest on-chain data and news analysis, the mid- to short-term outlook of the Bitcoin market exhibits the following characteristics:

· Strong Fundamental Support: Structural tightening of the supply side is the most crucial cornerstone of a long-term bull market, providing a solid bottom support for the price.

· Demand Side in Observation Period: The long-term trend of institutional demand remains positive, but in the short term, the volatility of ETF flows and sensitivity to macro signals are increasing, and the market is actively seeking new and sustainable demand drivers.

Short Term: The market is expected to maintain high volatility, with its fluctuations being strongly supported by the short-term hodler cost line ($96,581). Of course, given the marginal sensitivity of ETF flows and the high dependence on macro signals (especially tariff progress and the actual rate cut path of the Fed), price fluctuations around this level may intensify.

• Upside Catalysts:

Continuous and significant net inflow recovery of ETF funds (daily averaging in the billions of dollars); macro-level rate cut expectations receive unexpectedly strong confirmation (such as the Fed explicitly turning dovish nine months ago); substantial regulatory developments in favor (such as key progress on the "Digital Asset Market Clarity Act").

• Downside Risk Points:

Continued weak ETF flow or a shift to significant net outflows; macro-level "black swan" events (such as a sharp escalation of tariff issues leading to a global risk-off sentiment, but funds not choosing BTC as a safe haven); price effectively dropping below the short-term hodler cost line and triggering a wider range of stop-losses.

• Risk Focus Points:

Macro uncertainty (especially tariff issues) and the persistence of ETF flows are the biggest risk points in the short term. For market participants, the current strategy should be to fully recognize the long-term supply-side bullish factors while closely monitoring the marginal changes on the demand side and the evolution of the macro environment. In the "Demand Rebalancing Period and Game of Expectations under Strong Supply Constraints," precise data tracking, rational expectation management, and keen capture of key inflection point signals are crucial for excess returns.

Mid-term Analysis

• Various Price Structure Analysis Models

• Liquidity Supply Level

• Incremental Model

• USDC Buying Power Composite Score

(Next Figure Various Price Structure Analysis Model)

The current stockpile is around 108,000, and the market is overall in a profitable state. From a static structural perspective, the current range may be a good area to take profits, even temporarily ignoring the results and processes of market dynamics game theory, in order to streamline the decision-making process.

(Next Figure Liquidity Supply Level)

The liquidity supply level is currently in a gradual decline phase, indicating a market with potentially weaker liquidity. This may be followed by an overall slowdown in sentiment. If the market continues to slide in its current state, it may enter a brief consolidation and adjustment phase.

(Next Figure Incremental Model)

The increment is currently in a phase of decline and contraction. When the market faces overall profit-taking pressure, a lack of incremental supply could reduce the upward momentum and the sustainability of price increases.

(Next Figure USDC Buying Power Composite Score)

Compared to before, the USDC buying power score has dropped by one grade, currently sitting at only a "high" level. There may be a slight shift in the trend of the US session buying power loss, weakening the momentum status.

Short-term Observations

• Derivative Risk Factor

• Option Intent Transaction Ratio

• Derivative Transaction Volume

• Option Implied Volatility

• Profit and Loss Transfer Amount

• New Addresses and Active Addresses

• Candied Orange Exchange Net Long Position

• Auntie Exchange Net Long Position

• High-Weight Sell Pressure

• Global Buying Power Status

• Stablecoin Exchange Net Inflow

Derivatives Rating: The risk factor is in the neutral zone, with moderate derivatives risk.

(Derivatives Risk Factor Chart below)

A slight market pullback has occurred, bringing the derivatives risk factor from red to the neutral zone. There are no special expectations for derivatives this week.

(Options Intent-to-Trade Ratio Chart below)

The put options ratio is at a medium to high level, with trading volume at a median level.

(Derivatives Trading Volume Chart below)

Derivatives trading volume is at a median level.

(Options Implied Volatility Chart below)

The options implied volatility has only experienced slight fluctuations in the short term. Sentiment Status Rating: Neutral

(Profit-Loss Transfer Amount Chart below)

The market's small pullback has only triggered a small amount of panic selling. The current market's positive and panic sentiments are at low levels.

(New and Active Addresses Chart below)

New active addresses are at a medium to low level.

Spot and Selling Pressure Structure Rating: BTC and ETH are in a continuous large outflow state.

( Tether Exchange Net Inflow Chart below)

Currently, BTC is experiencing a continuous large outflow.

(Next Figure: Exchange Inflow for ETH)

ETH has experienced a large outflow.

(Next Figure: High Weight Sell Pressure)

Currently, there is no high weight sell pressure.
Buy Power Rating: Global buy power and stablecoin buy power remain steady compared to last week.

(Next Figure: Global Buy Power Status)

Global buy power remains steady compared to last week.

(Next Figure: USDT Exchange Inflow)

Stablecoin buy power remains steady compared to last week.

Weekly Summary:

News Summary:

The latest market news paints a picture of the cryptocurrency industry facing a tough decision amid the "double-edged sword" of crypto assets in the macroeconomy (interest rate cut expectations vs. tariff risks) and a "dawn moment" in the internal regulatory environment. The SEC's favorable clarification on PoS has injected critical certainty into the industry's development, with institutional deep involvement and corporate strategic adoption reshaping the market's supply-demand fundamentals. Of course, the Federal Reserve's ultimate policy path is still subject to a complex macro game, and short-term market sentiment is inevitably affected by external noise.

• Short Term: The market may continue its oscillation pattern, highly sensitive to macro signals (especially progress in tariff negotiations and the Federal Reserve's interest rate meeting statements). If tariff risks are effectively controlled and interest rate cut expectations further solidify, it is expected to bring a new round of upward momentum to BTC and ETH. Otherwise, caution should be exercised against technical retracement risks.

• Medium Term: As the positive effects of the SEC's PoS clarification gradually emerge and institutional allocation deepens, the ETH ecosystem is expected to seize development opportunities (as changes will not be too drastic due to past year's suppression). BTC, with its properties as a store of value and macro hedging tool, will continue to receive attention amid global economic uncertainty. Further clarification of regulatory frameworks (such as the new policy of the South Korean government) will be a significant catalyst.

• Long-Term Outlook: Whether the cryptocurrency market's "new supercycle" can truly take shape depends on its ability to transition from speculation-driven to value-driven on a track of improving regulation, successfully address competition and integration from the traditional financial system, as well as challenges from other emerging technologies (watch the space). Vitalik's grand plan for ETH L1 scalability, if successfully implemented, will greatly enhance its utility and network effect, potentially laying a solid foundation for long-term growth. For market participants, the core strategy at this stage should be based on a deep understanding of the coexistence of "structural optimism" and "cyclical caution." Maintain conviction, flexibly respond to short-term fluctuations, and consistently pay attention to long-term signals that can fundamentally change the industry (such as key regulatory breakthroughs, disruptive ecosystem innovations, and strategic adoptions by different countries).

On-Chain Long-Term Insights:

1. Structural tightening on the supply side, the most critical cornerstone of the long-term bull market remains, providing a solid bottom support for the price;
2. Long-term trend of institutional demand still looks positive, but short-term volatility in ETF flows and sensitivity to macro signals have increased;
3. The market is actively seeking new, sustainable demand drivers.
4. Short-term high-level volatility is expected to persist, with the price fluctuating between the short-term holder cost line ($96,581) and the previous high point.

5. Clearer catalysts are needed for directional breakthroughs.

6. Risk focal points, macro uncertainty (especially tariff issues), and the sustainability of ETF flows are the biggest short-term risk factors.

• Market Tone:

The current strategy should be to fully recognize the long-term bullishness on the supply side while closely monitoring the marginal changes in demand and the evolution of the macro environment.
Currently, it is generally in a state of "demand rebalancing and expectation game under strong supply constraints."

On-Chain Medium-Term Exploration:

1. Market overall profits, around 108,000 represent the stock top, simplifying decision-making pathways.

2. Liquidity supply is decreasing, market liquidity is weak, sentiment is slowing down, or entering a consolidation phase.

3. Incremental contraction phase, supply shortage weakening upward momentum and price sustainability.

4. USDC buying power score drops to "high," slight outflow of funds, momentum state weakening.

• Market Tone:

Cautious, Watchful

The market is profitable but experiencing decreasing liquidity, incremental contraction, weakening USDC buying power, and diminishing momentum. Currently, it may be in a consolidation and adjustment phase.

On-chain Short-term Observations:

1. The risk index is in the neutral zone, with moderate derivatives risk.
2. New active addresses are relatively low.
3. Market sentiment rating: Neutral.
4. Exchanges have been experiencing continuous significant outflows of BTC and ETH.

5. Global buying power and stablecoin buying power remain steady compared to last week.

6. The probability of the price not breaking below 95000~100000 in the short term is 80%;

• Market Outlook: Currently, there are fewer chips choosing to take profits at the current price in the short term, and the buying power is sufficient to support the market. It is expected that this week, the market will be influenced by derivatives, showing signs of oscillation, with a low probability of a significant direct retracement.

Risk Warning: The above is all market discussion and exploration and does not provide directional investment advice; please view with caution and beware of market black swan risks.

This article is a contribution and does not represent the views of BlockBeats.