Andre Cronje Hints at Return to Crypto; JPMorgan Executes Its First Live Trade on Polygon Blockchain; Bank of England Signals For Smaller Increments of Rate Hikes

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Strong job data continues to hurt markets; BoE raises rates by 75bps (more in Macro & TradFi)
• Andre Cronje hints at return to crypto; JPMorgan executes first live trade on the Polygon Blockchain (more in DeFi & CeFi)
• BTC's percentage supply last active 1+ years ago reached an ATH of 66.47% (more in On-Chain)
• Option flows remain mixed as no clear directional bias is observed (more in Crypto Derivatives)
• BTC and ETH holding onto short-term bull structure by a thread (more in Crypto Technical Analysis)

Macro & TradFi

Yesterday, the BoE moved in step with the Fed to raise interest rates by 75bps. In its speech, the central bank expressed more modest future interest rate targets than what markets expected causing the pound to weaken. Elsewhere, the G7 economies are in discussions on setting a fixed price as they finalize price caps on Russian oil this month. US job data continued to show signs of a stubbornly tight labour market as initial jobless claims came in at 217K vs 220K forecasts, and 1000 claims less than the previous week.

US equity markets sunk yesterday as the DJIA fell 0.46%, the S&P 500 down 1% and the Nasdaq down 1.73%. The stubbornly strong labour market spooked markets as it gave investors more reason to believe the Fed would continue its aggressive tightening. Interest rate sensitive tech stock saw more discounting as Apple, Google and Amazon slid more than 3%. 10Y treasury yields are trading close to their year highs, rising by 10bps since the start of the week.

DeFi & CeFi

• WalletConnect closes $12.5M funding round with Coinbase Ventures
• Andre Cronje hints at comeback to DeFi
• PancakeSwap goes live on Aptos
• NFT startup Courtyard closes $7M seed round with OpenSea ventures
• Deribit announces resumption for withdrawals for $ETH, $BTC and $USDC; Users are to generate new deposit address
• Stablecoin protocol Bluejay Finance looks to raise $5M from the sale of its governance token $BLU
• JPMorgan used Polygon Blockchain to trade tokenized cash deposits as part of the Monetary Authority of Singapore (MAS) Project Guardian.

Andre Cronje, well-known for co-founding Yearn Finance and being a key contributor to the Fantom ecosystem, has hinted at his return after departing from crypto earlier this year in March. The veteran recently updated his socials such as adding “.ftm” to his Twitter handle and his position on LinkedIn to “Vice President of Memes” at the Fantom Foundation. The $FTM token added more than 15% upon the speculation that Andre Cronje will be involved in the Fantom ecosystem.

The Monetary Authority of Singapore (MAS) announced on November 2 that the first industry pilot under MAS’ Project Guardian that explores potential DeFi applications in wholesale funding markets has completed its first live trades. One of which was JPMorgan’s Onyx successful tokenization of the Singaporean Dollar deposits. This marks a momentous milestone for banks utilizing public blockchains.

On-Chain

ETH Number of Addresses Sending to Exchanges (7d MA) just reached a 5-year low of 346.851. This suggests an increase in reliance of on-chain DeFi wallets since its inception.

On the other hand, BTC's percentage supply that was last active 1+ years ago just reached an ATH of 66.47% which adds confluence that there is accumulation of it as a store of value during Bitcoin's price resilience over the last few months.

Crypto Derivatives

• Funding rate remains positive on BTC and ETH
• 30-day IV fell for BTC to 47.18%, while diving to 67.94% for ETH
• 30-day 25d put skew increased for BTC and ETH to -4.02 % and 0.13% respectively.

For futures, total liquidations yesterday amounted to $89.2M, with 53.25% of that being short liquidations.

On the options front, IV fell across the board for BTC and ETH as price action remained relatively muted. The 24-hour put-call ratio for BTC and ETH increased to 0.296 and 0.559 respectively. The term structure for BTC and ETH are currently still in backwardation on the front end of the curve while in contango from 18 Nov onwards.

On the flow side, the dominant strategies in the past 24 hours for BTC have been the long straddle and the bear call spread. Flows were mixed for ETH, with the dominant strategies being the long strangle and the short strangle. These flows indicate that traders are not too confident on placing any directional bets just yet.

Crypto Technical Analysis

Looking at TA, BTC lost ground at key level of $20,283 yesterday but found support at 20K. Should price move lower, we could see BTC move to 19.5K. For the weekly candles, a close below $20,285 would signal a close below key levels suggesting a slowdown in bullish momentum.

Looking at ETH, price has retested the key level of $1.5K. Should price break below this, price may retreat to $1,364 given the large gap. On the weekly, a close below $1,561 and above $1.5K would suggest lower volatility over following week, but a close below $1.5K would suggest a break in the current bull structure and a possible reversal back into the September to October range.

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Daily Readings

TradFi

• Australia central bank cuts growth outlook, rates need to rise to cool red-hot inflation

• Factbox: Highlights from Canada government’s fall economic statement

• VIEW Canada cuts 2023 GDP forecast but says economy to avoid recession

• Dorsey’s Block posts a jump in revenue, boosting shares

• U.S. factory orders rise moderately in September

• U.S. service sector slows in October; price pressures build up - ISM survey

• U.S. productivity rebounds moderately in third quarter

• VIEW Bank of England lifts UK rates to 3% in historic hike

• U.S. trade deficit widens in September

• U.S. weekly jobless claims fall; layoffs pick up in October

• Asia markets slip ahead of U.S. jobs report.

Crypto

• Market Wrap: Ether, Other Cryptos Rise Despite Unsettling Inflationary Concerns.

• Twitter Halts Work on Crypto Wallet: Report; Dogecoin Drops 4%.

• $1B Crypto Hack Fears Spur 20% GALA Plunge, But Firm Implies It Attacked Itself as a Safeguard.

• Circle Begins Putting Reserves Into New BlackRock Fund.

• Canada Announces Crypto, Stablecoin Consultation in New Budget Statement.

• NFT Platform ImmutableX’s $66M Unlocking Looms, Putting Sell Pressure on IMX Token.

• Japan Digital Ministry to Create DAO for Web3 Exploration.

• Crypto Wallet Blocto Launches $3M Fund for Aptos-Based Projects.

• SuperRare NFT Marketplace Launches RarePass for Exclusive Curated Art Drops.

• Venture Capital Firm Paradigm to Host Crypto Tech Event for US Policymakers.

• Standard Chartered Invests in JPM and DBS-Backed Blockchain Payment Network Partior.

• Web3 Browser Opera Offering New NFT Analytics Tool.

• Digital asset platform Bakkt set to acquire Apex Crypto for $200M.

• Koinos to launch its free-to-use blockchain mainnet.

Deal Flow

• WalletConnect Raises $12.5 Million Ecosystem Round to Build Out a Web3 Communications Network

Yours sincerely,
Treehouse Research 🌳

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