Cryptocurrency market may see a trend reversal, capturing investment opportunities from short-term funding

Author: Alfred, Trend Research

1. Macro and crypto markets gradually improve

1. Signs of tariff easing

The short-term direct emotional shock and risk aversion brought about by Trump's tariff policy have eased, and market volatility has declined. Trump made a public speech on Tuesday (April 22) local time, admitting that the current US tariffs on goods imported from China are too high and that the tax rate is expected to be significantly reduced. This marks that Trump's attitude on his iconic tariff policy has eased.

2. Expectations of interest rate easing

The current CME interest rate futures imply a rate cut starting in June, with a total of three rate cuts this year. At that time, new liquidity may be injected into the market.

3. Crypto-friendly policies are gradually being implemented

Since Trump took office, the crypto market has become his key development industry, aiming to create a new "dollar hegemony" system. (1) On March 6, 2025, Trump signed an executive order to formally establish the "Strategic Bitcoin Reserve" and the "U.S. Digital Asset Reserve". The plan is currently being promoted. At the same time, dozens of states in the United States are promoting the Bitcoin State Reserve Bill. If Arizona passes the final three readings, it will be submitted to the governor for signature.

(2) Currently, the United States is promoting two stablecoin bills, the GENIUS Act (Guidance and Establishment of the United States Stablecoin National Innovation Act) and the STABLE Act (Stablecoin Transparency and Accountability for the Economy Act). Both bills have been passed by their respective committees. The industry generally expects that the final bill may be passed and implemented in the second half of 2025, depending on the speed of coordination between the two houses and the attitude of the president.

(3) On April 22, Paul Atkins, nominated by Trump, officially replaced Gary Gensler as Chairman of the SEC. Atkins is regarded as a regulator friendly to the crypto industry and is expected to reduce law enforcement actions against crypto companies and promote industry innovation.

4. BTC turns from short to long

Since mid-March, BTC has performed better than US stocks overall, reflecting some of its safe-haven properties similar to gold. Around April 8, BTC's RSI and MACD both showed a bottom divergence, and the superimposed sentiment indicator reached an extremely panic position, forming a recent bottom. So far, both the MACD fast and slow lines have come above the zero axis, and the market trend has turned from short to long.

2. ETH may lead the trend reversal of the altcoins

1. On-chain data: ETH has experienced a long decline of 5 months since December 2024. The number of profitable addresses has dropped to a lower level than the bear market and has continued to be oversold. Currently, with the recovery of the crypto market, it has entered a key support-resistance swap range.

(1) Profitable address data

The number of profitable addresses has dropped rapidly, from nearly 95% of the profits at the end of December last year to only about 35% of the addresses that are still profitable. This level is even lower than during the 2022 bear market.

（2）MVRV indicator

The MVRV indicator has dropped to 0.8, and the market value is lower than the realized value, which is obviously in an oversold state, which is equivalent to the bear market stage in 2022 and 2019.

（3）Cost Basis Distribution

The redder the color, the more chips are exchanged. The four active trading areas are: $3200-3400, $2600-2800, $1850, and $1650.

In the $3200-3400 area, as time goes by, holders fail to hold on firmly and sell at a loss (the color changes from orange and yellow to green). In the $2600-2800 area, the accumulation time is short, but it is still in the holding state, and there is no large-scale exit. The $1850 area is the long-term holders' positions, and there has been no major change in the positions since November 2024. $1650 is the accumulation area formed by looking for a new bottom after this decline.

From the cost basis distribution, there is a large long-term holders' chip accumulation area near 1850. It is necessary to observe whether the pressure support swap is formed to form a new support level.

2. Contract data analysis: ETH, as the second largest cryptocurrency by market value, has a huge contract market size. The contract size of the exchange is several times or even dozens of times the balance of its wallet. At present, the contract market has a certain degree of synchronous rise with spot funds.

（1）Changes in contract positions

Currently, the total ETH contract position is USD 21.821 billion, with a market value of USD 216.9 billion and an OI/MC ratio of about 10%. Among the major currencies, this indicator is 3.5% for BTC, 7.3% for SOL, and 0.9% for BNB. It can be seen that ETH has greater liquidity and reference significance in the contract.

Currently, the total amount of Binance ETH-USDT contract is 1.789 million ETH, which is the largest ETH contract trading pair.

According to the figure below, since April 11, ETH has tested the resistance level of around 1650 three times, and the contract open interest and price increase are positively correlated. On the evening of April 22, the ETH contract open interest increased significantly, driving the price to break through to $1695. Subsequently, the total contract open interest remained in the range, while the price continued to break through to $1800. This round of increase was driven by both leveraged funds and spot funds.

（2）Exchange balance

There is a large gap between the exchange wallet balance of ETH and the contract volume held by the corresponding exchange. The Bybit exchange wallet balance is 276,300 ETH, while the exchange position is 1.147 million ETH. That is, Bybit opened a position of 1.147 million ETH with 276,300 ETH as the underlying asset, which is 4.15 times the balance. The Gate wallet balance is 154,000, and the exchange holdings are 1.9052 million, which is 12.3 times the balance. The Binance wallet balance is 4.057 million, and the exchange holdings are 2.3926 million, which is 0.6 times the balance. The data is the best among all exchanges. In many exchanges, ETH's contract positions are several times the spot reserve balance. The high-multiplier derivative scale improves capital efficiency and provides huge liquidation profit space for long and short positions.

（3）Monthly liquidation data

Binance short position liquidations are concentrated below USD 1,900, high-multiple short position liquidations are concentrated between the current price and USD 1,847, while long position liquidation contract prices are concentrated at USD 1,682.

The short order liquidation prices on Hyperliquid are concentrated at US$2,478, followed by US$1,896 and US$1,931, while the long order liquidation prices are relatively scattered, at US$1,765, US$1,471, US$1,426 and a lower price of US$1,099.

3. Technical analysis: Multiple technical indicators of ETH have recently shown bottoming signals, suggesting the possibility of a reversal between long and short positions. The current price has also come to the upper edge of the falling channel and the horizontal pressure level to try to break through. A breakthrough or a pullback to confirm may bring potential buying points

In the past four months, ETH has been in a downward channel for a long time, with a price drop of 66% from the highest point of 4100 to the lowest point of 1385. Recently, we can observe that the bulls have launched a strong defense. As of April 23, the price rebounded about 30% from the lowest point to around US$1,800.

（1） K-line pattern

The K-line No. 1 in the figure below presents the spring pattern in Wyckoff theory. The trading volume on that day was the highest in two months. The corresponding K-line closed with a long lower shadow and a narrow body. The so-called result does not match the effort, reflecting the buying power of the main funds at this position. In a downtrend, the appearance of Spring may indicate a reversal of the trend and is one of the signals that the market is turning from short to long.

The 2nd and 3rd candlesticks show a bullish engulfing pattern [The bullish engulfing pattern is composed of two candlesticks, the first one is a negative line and the second one is a positive line, and the body of the positive line completely covers the body of the previous negative line. This pattern usually appears in a downtrend and is regarded as a signal that the market trend may reverse upward.] This shows that the bullish force in the market has begun to regain its dominant position after a period of suppression, suggesting that the market may be about to usher in a wave of rising prices.

（2） Moving Average

ETH price has been trading below the 20-day EMA (red line) for a long time. Yesterday, it broke through EMA20 strongly, indicating the possibility of a trend reversal. We can observe whether the K-line of the past 2-3 days can stand above EMA20 for further confirmation.

（3）MACD&Momemtum

It can be observed that the divergence between the daily MACD and momentum is very obvious, that is, the price hits a new low, but the indicator does not hit a new low, which means that the short-selling force is weakening here, which agrees to indicate that the downward trend may stop. At the same time, the fast line of MACD crossed the slow line on April 13 to form a golden cross, providing a potential buying point.

（4）RSI&MFI

The relative strength index and the Money Flow Index both reached the oversold range on April 8.

III. Opportunities in altcoins

Recently, as the crypto market rebounded, BTC broke through the key pressure level and ETH rose to an important resistance conversion level, leading a group of stocks that followed the rebound and showed signs of reversal. Some stocks achieved amazing gains. In the meme track, NEIROETH rose by more than 210% in 3 days. The AI ​​track had the largest overall increase, with ZEREBRO rising by more than 200% in 3 days. Both stocks had data changes at the contract level and showed a further upward trend. This article takes the growth rate of the stocks in these two different tracks as examples for analysis

1. NEIROETH

(1) Project Introduction

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

NEIRO (First Neiro on Ethereum) has the same concept as NEIROETH. The two were launched one after another, both claiming to have the orthodox spirit and community of Neiro, triggering the famous "NEIRO capitalization dispute". In the end, NEIRO landed on Binance spot and contract, while NEIROETH only landed on Binance contract, but both are meme projects with huge community drive.

(2) Basic information of tokens

NEIROETH's current market value is around 61 million US dollars, with a total supply of 1 billion, and full circulation without team reservation.

24h spot trading volume is 35 million US dollars, and the spot trading volume is mainly concentrated in Bybit (30.65%) and Gate (29.38%). In terms of spot chip distribution, the top three exchanges with the largest holdings are Bybit (26.84%), Gate (12.67%) and Bitget (5.25%). Two unmarked whale addresses hold 6.86% and 5.11% respectively, and market maker Wintermute holds 6.52%, reflecting that the main chips of the token are distributed in the hands of central exchanges and some whales and market makers. Bybit, which holds the largest amount of coins, holds 15.16 million US dollars in chips.

The 24-hour contract trading volume is 843 million US dollars, which is 24 times that of the spot market. The contract trading volume is mainly concentrated in Binance, Okx, and Bybit. The contract trading volume of the three exchanges increased by 38.48%, 27.16%, and 50.45% in 24 hours, respectively, and the position increased by 121%, 99.7%, and 104.2% in 24 hours, respectively. The above data reflects that the main trading market of NEIROETH is the contract market, and there have been abnormal movements in recent days. At the same time, the price of its tokens also saw an astonishing increase, with a three-day increase of more than 200%.

(3) Contract Analysis

Combined with the above data, it is not difficult to see that the current NEIROETH contract trading is very active, with a high total position and an OI/MC ratio of more than 13.8 times. The target currently has sufficient counterparties and potential profit sources in the contract market.

Source: Coinglass

Breaking down the detailed indicators, according to Coinglass data, the current aggregated long-short ratio of NEIROETH is 1.05,

and the long and short counterparties’ positions are equivalent. In Binance, which has the best liquidity, the ratio of long to short accounts is 0.5576, and the ratio of long to short accounts held by large accounts is 1.919, which reflects that the overall short accounts are larger than the long accounts, but large accounts hold more long positions. From the growth of contract CVD, the net long positions have continued to rise in the past four days, showing an overall bullish trend. According to the latest data, the 24-hour long position was liquidated by 384,700 US dollars, while the short position was liquidated by 3,037,500 US dollars, mainly the short position.

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 artworks are minted on Polygon.

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

• Autonomously launched Pump.fun tokens on the Solana blockchain, with a market value of over $400 million.

• Attracted more than 30,000 followers on Telegram, Warpcast, X (formerly Twitter) and Instagram.

• Released a remix album called "Genesis", which has been played more than 20,000 times on Spotify.

• Signed with music DAO Opaium to further expand into the art field.

(2) Basic information of tokens

The total issuance of tokens is 1 billion, issued in December 2024, with a fully circulated token and a circulating market value of $76.85 million.

Among the top ten holding addresses, exchanges are the main holders, with 6 exchanges holding approximately 38% of the tokens. The other 4 addresses hold a total of 12%. The chips are distributed more dispersedly.

（3） Contract Analysis

As of April 23, open interest increased by more than 300% in 24 hours, totaling US$48 million, with an OI/MC ratio of approximately 65%; trading volume increased by 782%, driving prices up by 165%.

Contract CVD continues to rise and is in a strong position. Spot CVD has declined, and the upward momentum is insufficient. The funding rate is positive, higher than the usual level, indicating that a large amount of funds are building long positions. The position has experienced rapid growth and is still at a high level. There has been no obvious reduction in positions. The ratio of long and short positions held by large households is 1.4, and large households are bullish. The ratio of long and short positions is 0.45, and large funds are bullish. From the perspective of active buying and selling (difference), there was intensive buying in the early morning of April 23, and relatively few selling.

Fourth, Summary

At present, under the background of improved macro environment, BTC has achieved a breakthrough in key positions. This article focuses on the various data of ETH, the "king of cottages". From the on-chain data, contract situation, and technical analysis, it can be seen that ETH is currently in a key position of support and resistance swap. If it breaks through, it may usher in a favorable trend reversal. In addition, in this market, we should focus on the cottage coins with abnormal data, and dismantle the logic of the rise of NEIROETH and ZEREBRO based on the chip structure and contract data. Under the trend, more rises in the Crypto market are coming.