BTC	ETH	S&P Futures 500
$63,474.76	$3,069.21	$5,206.25
(-1.23%)	(-2.54%)	(+0.91%)
Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)

GM Treehouser 🌳

Welcome to our Treehouse Daily newsletter, where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

Also, in case you have missed it, check out our latest research piece 👇

April 2024 Market Recap

You can also access our research articles on the Bloomberg Terminal with the command “NH TRH < GO >"!

Our Daily View

What We Are Covering Today

The Israeli war cabinet unanimously rejected Hamas' cease-fire acceptance; Xi Jinping urges French President Macron to prevent a “new Cold War” (More in Macro & TradFi)
SEC delays decision on Galaxy Invesco’s application for spot ETH ETF; US SEC issued Wells notice to Robinhood’s crypto business (More in DeFi & CeFi)
Ethereum records largest single-day increase in non-empty wallets in almost 2 years; Bitcoin miners are in their longest accumulation phase since $16K BTC (More in On-Chain)
7-day ATM IVs see a sharp decline with skews continuing to exhibit a call premium (More in Crypto Derivatives)
BTC moved sideways while ETH declined slightly after the news of SEC’s delay on another ETH spot ETF (More in Crypto Technical Analysis)

Macro & TradFi

Hamas accepted a cease-fire proposal brokered by Qatar and Egypt to halt fighting with Israel in Gaza, but Israel's war cabinet unanimously rejected it, citing inadequacy. Israel vowed to continue military operations in Rafah while also sending a delegation to negotiate further. Tensions rose after Hamas killed four Israeli soldiers, and talks stalled over Hamas's demand for a permanent truce and Israel's insistence on eliminating Hamas first. Despite international concerns and warnings, Israel prepared for a potential invasion of Rafah. The impasse dashed hopes for an immediate pause in the conflict, with prospects for a lasting truce and humanitarian aid delivery to Gaza's war-ravaged population uncertain.

Meanwhile, during a state visit to France, Chinese President Xi Jinping urged French President Emmanuel Macron to help prevent a "new Cold War" as the EU aligns more closely with US concerns over security and trade. The leaders discussed issues such as trade tensions and the conflict in Ukraine, with Xi advocating for mutual benefits and opposing supply chain disruption. Despite efforts to bridge differences, tensions persist, particularly in trade relations. Macron emphasized the importance of security in Europe and cautioned against using the Ukraine crisis to fuel geopolitical rivalries. The EU's stance on trade with China is toughening, echoing US concerns, while China denies overcapacity accusations and accuses the EU of protectionism. Macron stressed the EU's sovereignty in shaping its trade and technology policies. Despite trade challenges, both leaders expressed openness to progress and exchanged symbolic gifts during Xi's visit.

Lastly, U.S. stocks closed higher on Monday, with the Dow Jones Industrial Average rising 0.4%, marking its fourth consecutive session of gains. The S&P 500 gained 1.0%, and the Nasdaq Composite added 1.2%, extending their winning streak to three days. Investor sentiment was buoyed by a weaker-than-expected jobs report on Friday, raising hopes that inflation may subside, potentially leading the Federal Reserve to cut interest rates. Disney (DIS) shares led Dow gainers, rising 2.5% ahead of the company's earnings report. Micron (MU) was the biggest winner on the Nasdaq, climbing 4.7% after an upgrade by Baird, citing potential upside opportunities. However, Apple (AAPL) shares fell 0.9% following news that Berkshire Hathaway had reduced its stake in the company. The yield on the 10-year Treasury fell to below 4.49%, while gold rose 1.1% to $2,334.

CeFi & DeFi

SEC delays decision on Invesco Galaxy’s application for a spot Ethereum ETF
US SEC issued Wells notice to Robinhood’s crypto business
First Bitcoin-backed synthetic dollar to launch with 25% yield
Hong Kong spot Bitcoin and Ether ETFs struggle to gain traction
MetaMask Rolls Out 'Smart Transactions' to Combat Ethereum Front-Running
Tiger Brokers rolls out online crypto trading to Hong Kong

The SEC has postponed its ruling on the application submitted by Galaxy and Invesco for a spot Ethereum ETF, delaying the decision for another 60 days with the next deadline set on the 5th of July. The SEC’s rationale for the delay stems from the need to allocate a longer timeframe for the consideration of the proposed rule change so that sufficient thought is given to the proposed rule change and the issues raised. The SEC has similarly delayed their decision on applications from eight prospective Ether ETF issuers including BlackRock, Fidelity, Franklin Templeton, Hashdex, and Ark 21Shares, which aligns with analyst expectations. Moving forward, the next anticipated deadline to look out for is on 23rd May for VanEck’s Ethereum ETF application

In other news, the US SEC issued a Wells notice to Robinhood’s US-based crypto business, resulting in a depreciation of Robinhood’s share price by 2.5%. The issuance of this Wells notice is a result of the SEC's investigation into Robinhood’s cryptocurrency listings and crypto custodian operations, despite Robinhood's attempts to register with the US securities watchdog. This shows that the lack of clear rules and regulations on what the regulatory authorities deem as securities in the digital asset space results in an uneven playing field for market participants to navigate, potentially hindering digital asset adoption.

On-Chain

Santiment reports that Ethereum experienced a notable surge in network activity on May 4, 2024, as evidenced by the creation of 196.71K new non-empty wallets, marking the highest single-day growth in 19 months. This spike in new addresses coincides with a rebound in Ethereum's price above $3,200, suggesting a renewed interest and potentially bullish momentum within the network. This is the largest growth since October 8, 2022.

Elsewhere, CryptoQuant’s recent analysis of Bitcoin's Miner Position Index (MPI) and the Puell Multiple suggests a significant consolidation and accumulation phase among miners, the longest since the period when Bitcoin prices hovered around $16,000. This trend, highlighted by a sustained 14-day reduction in miner sell pressure and the lowest revenue metrics in over a year, indicates that miners might be reducing their market sales in anticipation of future price increases. This behavior is occurring alongside rising ETF flows and increasing expectations of a Q4 rate cut, suggesting that miners are strategically accumulating holdings to potentially capitalize on anticipated higher market prices.

Crypto Derivatives

Funding rates remained positive for BTC and ETH.
Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 55.40% and 66.54%, respectively.
The 30-day 25-delta skew (C-P) for BTC and ETH decreased to 1.77% and -3.95%, respectively.
The futures market witnessed $191.1M in liquidations, with longs representing 65.61% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR	Perp (USDT pair)	Long on	Short On
25.18%	BTC	OKX	dYdX
23.07%	BTC	Binance	dYdX
18.24%	BTC	Bybit	dYdX
Notes: 1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps. 2) CEXs observed include Binance, Bybit, OKX & dYdX. 3) Lookback period is 24 hours.

Today’s BTC ATM IVs show a visible decline in the 7-day IV, suggesting a significant reduction in short-term volatility expectations. This decrease aligns with a steadying trend in longer maturities, indicating that the market's initial reactions or concerns might have subsided, leading to a more settled sentiment.

Meanwhile, the BTC Shadow Term Structure continues to exhibit a contango shape, suggesting that market participants anticipate increasing volatility in the future compared to the present. Overall, the mark IVs have declined across the entire curve, aligning with the aforementioned analysis on the settling sentiment on BTC.

The BTC 7-day C-P skew and the 30-day skew remained relatively stable, hinting at consistent short-term and longer-term market sentiment. This pattern indicates that while there are minor fluctuations in the near term, the overall market outlook for BTC up to 30 days continues to lean towards a bullish sentiment, as reflected in the convergence of the skews.

Lastly, @Paradigm reported notable BTC transactions including buying a 200x call spread for May 17, 2024, at $68K/$72K, and a 100x call for July 26, 2024, at $110K. A put calendar for June 28 to December 27, 2024, at $75K was sold. In ETH, transactions were centered around call calendars, with a 2000x buy for June 28 to July 26, 2024, at $4K/$5.5K, and a 1000x sell for the same dates and strikes. Additionally, a 1000x call spread for May 31, 2024, at $3.3K/$3.5K was sold.

Crypto Technical Analysis

In Technical Analysis, BTC has primarily traded sideways in the last 24 hours. Consequently, our previous analysis remains valid, indicating that the current BTC price maintains an upward trajectory. The RSI remains below the overbought threshold, suggesting potential for further growth, with the next observable resistance at $67K. Conversely, investors should monitor closely for the $60K level as it remains a critical support zone in case of a bearish reversal.

On the other hand, ETH has experienced a slight decline following news of the SEC's delay on another Spot ETH ETF. However, ETH continues to oscillate within the previously identified horizontal parallel channel, with its price currently positioned near the midpoint between the two boundaries. Consequently, it is challenging to discern a clear directional signal in the near future. As such, our previous analysis continues to hold true, indicating that the next resistance may be observed near the upper boundary at around $3.27K, while the key support zone remains near the lower boundary at approximately $2.97K.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

Crypto

Deal Flow

Jack Dorsey’s Block to raise $1.5B in senior notes offering

Yours sincerely,
Treehouse Research 🌳

EIP-4844: A Gateway to the Cancun Upgrade and Beyond

Authors: Eddy Song, Jun Yong Heng and Jerry X'Lingson

Enjoyed Our Research Insights?