Crypto Market Update: Potential Trend Reversal Ahead, Capitalizing on Short-Term Funding for Investment Opportunities

Original Article Title: "Crypto Market May See Trend Reversal, Capturing Investment Opportunities from Short-Term Fundamentals"

Original Article Author: Alfred, Trend Research

1. Macro Improvement and Gradual Recovery of Crypto Market

1. Signs of Tariff Easing

The short-term direct emotional impact and risk-off trades brought about by Trump's tariff policy have eased, and the current market volatility has decreased. On Tuesday, April 22nd, local time, Trump made a speech in public, acknowledging that the current U.S. tariffs on Chinese imports are too high and are expected to be significantly reduced. This marks a moderation in Trump's signature tariff policy stance.

2. Expectation of Interest Rate Cuts

The current CME interest rate futures imply rate cuts starting in June, with a total of three cuts within the year. This may inject new liquidity into the market.

3. Gradual Implementation of Crypto-Friendly Policies

Since Trump took office, the crypto market has become a key industry for his development, aiming to create a new "dollar hegemony" system. (1) On March 6, 2025, Trump signed an executive order officially establishing the "Strategic Bitcoin Reserve" and "U.S. Digital Asset Reserve." The plan is currently advancing, while dozens of states in the U.S. are advancing Bitcoin state reserve bills. If Arizona passes the final third reading, it will be submitted for the governor's signature.

(2) Currently, the U.S. is advancing two stablecoin bills, namely the "GENIUS Act" (Guiding and Establishing National Innovation in Stablecoin Act) and the "STABLE Act" (Stablecoin Transparency and Accountability For Economies Act). Both proposals have been introduced in their respective committees and have received approval. It is widely expected in the industry that the final bills may be passed and implemented in the second half of 2025, depending on the coordination speed between the two houses and the president's attitude.

(3) On April 22nd, Paul Atkins, nominated by Trump, officially replaced Gary Gensler as the SEC chairman. Atkins is seen as a regulator friendly to the crypto industry and is expected to reduce enforcement actions against crypto companies, promoting industry innovation.

4. BTC Shifts from Bearish to Bullish

Since mid-March, BTC has performed better than the U.S. stock market, demonstrating a hedge-like property similar to gold. Around April 8th, BTC showed a bullish divergence in both RSI and MACD, combined with sentiment indicators reaching extreme fear levels, forming a recent bottom. As of now, both the MACD fast line and slow line have crossed above the zero axis, indicating a shift in market trend from bearish to bullish.

2. Trend Reversal of ETH or Leading Shitcoin

1. On-chain Data: ETH has experienced a prolonged 5-month decline from December 2024 to the present, with the number of profitable addresses dropping to a lower level seen in the bear market, continuously oversold. Currently, along with the overall crypto market recovery, ETH has entered a critical support-resistance swap range.

(1) Profitable Address Data

The number of profitable addresses has plummeted, from nearly 95% profitability at the end of last December to only around 35% of addresses still in profit. This level is even lower than during the 2022 bear market.

(2) MVRV Ratio

The MVRV ratio has dropped to 0.8, with the market value now lower than the realized value, clearly entering an oversold state, comparable to the bear market phases of 2022 and 2019.

(3) Cost Basis Distribution

The redder the color, the more chip exchanges are happening. The four active trading regions are: $3200–$3400, $2600–$2800, $1850, and $1650.

In the $3200–$3400 region, over time, holders have not been able to hold steadfastly but instead have sold off (color changing from orange, yellow to green). In the $2600–$2800 region, accumulation time is short, but currently, holders appear to still be holding without significant sell-offs. The $1850 region represents long-term holders who have held since November 2024 without major changes. The $1650 level is an accumulation zone formed to find a new bottom after this drop.

Looking at the cost basis distribution, there is a significant accumulation zone of chips near $1850 held by long-term holders. It is necessary to observe whether a pressure-support swap will form around $1850, creating a new support level.

2. Contract Data Analysis: As the second-largest cryptocurrency by market capitalization, ETH has a massive contract market size, with the contract market size of trading platforms being several times or even tens of times larger than their wallet balances. Currently, the contract market has experienced a certain degree of synchronous rise driven by spot funds.

（1） Contract Position Change

The current total ETH contract position is $21.821 billion, with a market capitalization of $216.9 billion and an OI/MC around 10%. This indicator is around 3.5% for BTC, 7.3% for SOL, and 0.9% for BNB among major cryptocurrencies, showing that ETH has greater liquidity and significance in the contract space.

The current total Binance ETH-USDT contract position is 1.789 million ETH, making it the largest ETH contract trading pair in terms of position size.

Based on the chart below, since April 11, ETH has tested the resistance level around 1650 three times, with the contract position and price demonstrating a positive correlation. On the night of April 22, a significant rise in the ETH contract position drove the price breakthrough to $1695, followed by the contract position remaining in a range-bound manner while the price continued to surge to $1800. This rally was driven by leveraged and spot funds simultaneously.

（2） Exchange Balance Situation

There is a significant gap between the ETH balance in exchange wallets and the corresponding contract volume held by the exchange. The Bybit exchange wallet balance is 276,300 ETH, while the exchange's contract position is 1.147 million ETH, meaning that Bybit has opened positions worth 1.147 million ETH based on a balance of 276,300 ETH, a leverage ratio of 4.15. The Gate wallet balance is 154,000 ETH, and the exchange's contract position is 1.9052 million ETH, resulting in a leverage ratio of 12.3. The Binance wallet balance is 4.057 million ETH, while the exchange's contract position is 2.3926 million ETH, indicating a leverage ratio of 0.6. These data represent the best practices among various exchanges. In many exchanges currently, the contract position in ETH is several times that of the spot reserve balance, and the high derivative scale has increased fund efficiency while providing significant liquidation profit space for both long and short positions.

（3） Monthly Liquidation Data

Binance's short liquidations are concentrated below $1900, high-leverage short liquidations are concentrated from the current price to $1847, and long liquidation contract prices are concentrated at $1682.

The majority of liquidations on Hyperliquid were concentrated around $2478, followed by $1896 and $1931 for short positions. On the other hand, the liquidation prices for long positions were more scattered, ranging from $1765, $1471, $1426 to as low as $1099.

3. Technical Analysis: Several technical indicators for ETH have recently shown signs of a bottoming pattern, indicating the possibility of a bullish reversal. The current price is testing the upper boundary of a descending channel and horizontal resistance, with a breakout and confirmation on a pullback potentially signaling a buying opportunity.

Over the past four months, ETH has been in a downtrend, experiencing a 66% price drop from a high of $4100 to a low of $1385. Recently, there has been a noticeable bullish defense on the chart, with a rebound of around 30% from the low point to the vicinity of $1800 as of April 23rd.

（1）Candlestick Patterns

In the chart below, the first candlestick (1) shows a spring pattern as per the Wyckoff theory, with the highest volume in two months. This candle has a long lower shadow and a narrow real body, indicating a mismatch between effort and result, reflecting potential buying power from institutional investors at this level. In a downtrend, the appearance of a Spring may signal a trend reversal and is one of the signals of a shift from bearish to bullish sentiment.

Candlesticks 2 and 3 exhibit a Bullish Engulfing pattern, signaling a bullish reversal. This pattern consists of two candlesticks where the first is bearish and the second is bullish, completely engulfing the real body of the previous candlestick. It typically occurs in a downtrend and is seen as a potential signal for a trend reversal to the upside.

（2）Moving Averages

ETH has been trading below the 20-day EMA (red line) for a long period. Yesterday, there was a strong breakout above the EMA20, suggesting a possible trend reversal. Further confirmation can be sought by observing whether the candlesticks in the next 2-3 days can stay above the EMA20.

（3）MACD&Momemtum

A very clear divergence between daily MACD and momentum can be observed, meaning that although the price made a new low, the indicators did not follow suit. This suggests a weakening of the bearish momentum, indicating a possible end to the downtrend. Additionally, on April 13th, the MACD fast line crossed above the slow line, forming a golden cross and providing a potential buying opportunity.

（4）RSI&MFI

Both the Relative Strength Index (RSI) and Money Flow Index (MFI) entered the oversold zone on April 8th.

III. Altcoin Opportunity Exploration

Recently, as the cryptocurrency market cap rallied, BTC broke through a key resistance level, and ETH rose to a crucial support-turned-resistance level, leading to signs of a market turnaround. Some assets saw astonishing price surges, with NEIROETH in the meme sector experiencing a more than 210% increase on the 3rd day. The AI sector saw the largest overall gains, with ZEREBRO surging over 200% in 3 days. Both assets exhibited unusual on-chain activities at the contract level and are showing further upward trends. This article analyzes these two top performers from different sectors.

1. NEIROETH

（1）Project Introduction

NEIROETH (Neiro on Ethereum) is a meme coin based on the Ethereum network, inspired by Neiro, a Shiba Inu dog adopted by the owner of the original Dogecoin prototype dog, Kabosu, on July 28, 2024. NEIROETH has sought to attract community attention through its cultural association with Dogecoin.

NEIRO (First Neiro on Ethereum) shares a similar concept with NEIROETH and was launched subsequently. Both projects claim to embody the spirit and community of the Shiba Inu Neiro, sparking the well-known "NEIRO uppercase-lowercase debate." NEIRO eventually landed on Binance for spot and futures trading, while NEIROETH only listed on Binance futures. Both are meme projects with large community followings.

（2）Token Basic Information

NEIROETH is currently valued around $61 million, with a total supply of 1 billion and no team reserves in circulation.

The 24-hour spot trading volume is $35 million, with spot trading mainly concentrated on Bybit (30.65%) and Gate (29.38%). In terms of spot chip distribution, the top three holders are Bybit (26.84%), Gate (12.67%), and Bitget (5.25%). Two unmarked whale addresses hold 6.86% and 5.11% respectively, market maker Wintermute holds 6.52%, indicating that the main chip distribution of the token is in mid-tier exchanges, some whales, and in the hands of market makers. The top holder Bybit holds $15.16 million in chips control.

The 24-hour contract trading volume is $843 million, which is 24 times that of spot trading, with contract trading mainly concentrated on Binance, Okex, and Bybit. The 24-hour trading volume increases of the three platforms are 38.48%, 27.16%, and 50.45% respectively, and the 24-hour open interest increases are 121%, 99.7%, and 104.2% respectively. The above data reflects that the main trading market for NEIROETH is the contract market, which has experienced recent volatility. At the same time, its token price has seen an astonishing increase, with a 3-day increase of over 200%.

（3）Contract Analysis

Combining the above data, it is not difficult to see that the current NEIROETH contract trading is very active, with a high total open interest, exceeding 13.8 times the OI/MC ratio. The asset currently has sufficient counterparties and potential sources of profit in the futures market.

Source: Coinglass

Breaking down specific indicators, according to Coinglass data, NEIROETH currently has a network-wide aggregated long/short ratio of 1.05,

with the long/short counterpart's open interest roughly equal. In the most liquid Binance, the long/short ratio of the account number is 0.5576, and the long/short ratio of large accounts is 1.919, reflecting that overall short accounts exceed long accounts, but large holders have more long positions. Looking at the growth of contract CVD, there has been a continuous increase in net long positions in the past 4 days, showing an overall bullish trend. Based on the latest data, there were $384,700 in long liquidations in the past 24 hours, while short liquidations amounted to $3.0375 million, with a significant liquidation of short positions.

2. ZEREBRO

（1）Project Introduction:

ZEREBRO is an artificial intelligence system that can create, distribute, and analyze content on decentralized and social platforms. Its native token is deployed on Solana, and digital artwork is minted on Polygon.

ZEREBRO has demonstrated its progress as an AI agent through autonomous actions in multiple domains, including social, art, and financial autonomy, with specific achievements such as:

• Autonomously launching the Pump.fun token on the Solana blockchain, with a peak market cap exceeding 4 billion USD.

• Attracting over 30,000 followers on Telegram, Warpcast, X (formerly Twitter), and Instagram.

• Releasing a mixtape album titled "Genesis" with over 20,000 streams on Spotify.

• Signing with the music DAO Opaium to further expand into the art domain.

（2）Token Basic Information

Total token supply is 1 billion, issued in December 2024, fully circulating tokens, with a circulating market cap of 76.85 million USD.

Among the top ten holding addresses, exchanges are the major holders, with 6 exchange wallets holding approximately 38% of the tokens. Additionally, 4 other addresses collectively hold 12%. The chip distribution is relatively dispersed.

（3）Contract Analysis

As of April 23rd, the 24-hour holding volume has increased by over 300%, totaling 48 million USD, with an OI/MC of approximately 65%; the trading volume has surged by 782%, driving a 165% price increase.

The contract's CVD continues to rise, indicating a position of strength. Spot CVD has seen a slight decline, suggesting a lack of upward momentum. The funding rate is positive, above normal levels, indicating a significant amount of funds are in a long position. The open interest has experienced rapid growth and remains at a high level, with no apparent signs of deleveraging. The whale holding ratio is 1.4, with whales being bullish. The long/short position ratio is 0.45, indicating large funds are bullish. Looking at the net buying and selling amount (difference), the early morning of April 23rd saw a concentrated buying volume with relatively fewer sells.

4. Summary

Against the backdrop of an improved macro environment, BTC has achieved a key breakthrough. This article focuses on the various data of the "King of Altcoins," ETH. From on-chain data, contract situation, and technical analysis, it is observed that ETH is currently at a key support-resistance swap position. If it breaks through, it may see a favorable trend reversal. Furthermore, in this market situation, it is essential to pay attention to the data anomalies of altcoins. Based on the chip structure and contract data, the logic behind the rise of NEIROETH and ZEREBRO is analyzed. With the trend, more upside potential is imminent in the Crypto market.

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