EMC Bitcoin Weekly Observations 610616 Interest Rate Cut Waiting Period May be Extended Shortterm Adjustment Risks Remain

Authored by: Shang2046
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Market Demand Weak, BTC Faces Miner Liquidation
Market Summary:
The June 12th Federal Reserve interest rate meeting and the May US CPI data proved to be the dominant factors influencing BTC’s trend last week. Stimulated by the downward CPI data, BTC once again surged towards the $70,000 mark but quickly dropped due to the hawkish comments from the Federal Reserve. BTC fell by 4.32% throughout the week, with a fluctuation of 7.44%.
The interest rate reduction matrix shows that the majority of the market expects a rate cut to be postponed until the end of the year, with only one rate cut expected in 2024.
As a result, the US dollar index rebounded strongly to above 105. Due to the performance of tech stocks and buybacks, the Nasdaq became a safe haven for long funds, while other markets were repriced based on a single rate cut.
If the rate cut does indeed get postponed to December as predicted, the volatility in the BTC market may continue. At this moment, $66,000 is a key point for the BTC price.
$66,000 is the shutdown price of the median mining machine (S 19 XP) in the largest BTC mining market in the world, the United States, and it can be seen as the beginning of a global miner liquidation.
In the past few bull markets, every halving cycle has been accompanied by the phenomenon of “killing miners,” where the halving of production capacity leads miners to not only sell all the BTC they produce daily to pay for electricity and other fixed costs but also sell a portion of their inventory. This often results in the market entering a rapid downward spiral, also known as liquidation.
In this current cycle, influenced by the US BTC spot ETF, the price broke the previous cycle’s high before the halving, reaching a historic high of $73,700. The market generally believes that even with reduced income, there will be no “killing miners” in this cycle.
However, the market seems to reflect historical fairness more accurately. After 13 weeks of fluctuation around 60-70,000, miner liquidation has begun: last week, miners were selling approximately $32 million daily, which is higher than the daily value of 450 BTC produced. On-chain data shows that miners’ holdings decreased by around 1,000 coins last week.
If miner selling triggers more sell-offs, a short-term downturn may occur. The price of $63,700, as mentioned in the previous weekly report, is the average holding cost for short-term investors in the last five months and would provide strong support.
Of course, support levels in a bear market can also turn into resistance levels, as sell-offs triggered by the lack of confidence among short-term investors can have a similar effect to miner liquidation.
Market Structure:
Stablecoins saw a net inflow of $313 million throughout the week, while the US ETF channel experienced a net outflow of $580 million, indicating an overall outflow of funds from the market.
The profit margin for short-term investors is only 4%. We emphasize that during relatively bullish periods, every approach to the breakeven line for short-term investors often results in a rebound in the market.
The good news is that aside from a small amount of miner selling, both long-term and short-term investors have slightly increased their holdings. Correspondingly, centralized exchanges saw an accumulation of 8,400 coins, indicating ongoing chip accumulation.
It is worth noting that the US-based BTC major trading platform, Coinbase, saw an outflow of 17,000 coins, showing optimistic buying sentiment among US investors, especially institutional investors. Conversely, the US spot ETF, dominated by retail investors, had a net outflow of $580 million last week after a record $1.8 billion inflow, showing characteristics of “buying high and selling low.”
In terms of USD stablecoin inflows, the trend has continued relatively stable for the past month, with a net inflow of $313 million, showing slight growth compared to the previous month. However, it remains in a plateau phase of slowed growth over the past month.
In terms of buying volume on centralized exchanges, there was an accumulation of around $5.8 billion, showing slight growth compared to the previous period, and remaining relatively stable.
EMC BTC Cycle Indicator:
The EMC BTC Cycle on-chain data engine shows that the bullish cycle accelerator signal has temporarily entered a dormant phase, with an indicator strength of 0.25.
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