Arbitrum to Launch $ARB Token Airdrop; Ethereum Developers Set Date for Shanghai Upgrade

17 Mar 2023, Friday

3:24 AM

Arbitrum to Launch $ARB Token Airdrop; Ethereum Developers Set Date for Shanghai Upgrade

BTC

ETH

S&P Futures 500

$24,981.00

$1,669.00

$3,955.50

(+2.67%)

 (+1.19%)

(+1.13%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • More Credit Suisse customers leave the bank despite its recent lifeline facility from the Swiss National Bank (more in Macro & TradFi)
  • Arbitrum $ARB airdrop is coming; Shanghai upgrade to activate on April 12 (more in DeFi & CeFi)
  • $1B Bitcoin transaction sets record; address rebounds to 40,141 BTC, Ethereum's shifting holdings: 10-10K adds 3.61M, 10K-10M dumps 9.43M (more in On-Chain)
  • BTC skew continues to be dominated by calls; near-term IV spikes as term structure becomes more backwardated (more in Crypto Derivatives)
  • BTC breaks the key resistance level with ETH closely following suit (more in Crypto Technical Analysis)

Macro & TradFi

Credit Suisse's $54 billion bailout facility allowed the bank to reconstruct its business, but some of its clients are not willing to wait and see the end result. In Asia, several ultra-wealthy clients are reducing their exposure, while in the Middle East, some customers are requesting to convert their cash deposits into treasury bills and bonds. Additionally, a wealth manager in Germany has reported that Credit Suisse clients have inquired about transferring their deposits to his firm. While analysts have suggested that UBS is the most likely candidate to acquire Credit Suisse, sources indicate that both banks are against the idea.

Meanwhile, major US banks have stepped in with a $30bn cash injection to rescue First Republic Bank. JPMorgan Chase, Citigroup, Bank of America and Wells Fargo each made a $5bn uninsured deposit into First Republic, while Morgan Stanley and Goldman Sachs are contributing $2.5bn apiece. Five other banks are each contributing $1bn. The deal is being seen as an extraordinary effort to protect the entire US banking system from a widespread panic by turning First Republic into a firewall.

Lastly, major indices have seen decent gains yesterday with NASDAQ, DJIA and SPX ending the trading session with +2.47%, +1.16% and +1.75% respectively. Treasury yield, on the other hand, has gained slightly with 2-year and 10-year treasury note sitting at 4.205% and 3.581% respectively.

DeFi & CeFi

  • Ethereum dev set April 12 for Shanghai Upgrade on mainnet
  • Arbitrum to airdrop long awaited $ARB token on March 23
  • New York judge approves Binance.US’ $1B acquisition of Voyager, denies US Attorney’s appeal
  • Archblock, issuer of TUSD, has moved $1B of reserves to Bahamas-based bank
  • SEC Chair Gary Gensler reiterate PoS tokens are securities after CFTC Chair comments that ether is a commodity
  • 21Shares closes 6 crypto exchange-traded products due to low demand
  • AllianceBlock partners with ABO Digital to offer tokenized structured products
  • International authorities seized over $46M from ChipMixer

Arbitrum, a leading player in Ethereum's layer 2 scaling space, is launching its own token called ARB. This marks Arbitrum's transition into a decentralized autonomous organization (DAO) where ARB holders will be able to vote on key decisions. The airdrop of ARB tokens will be granted to community members on March 23rd, and users can check their eligibility and claim tokens by visiting gov.arbitrum.foundation. The total circulation of ARB will be 10 billion, and 56% will be controlled by the Arbitrum community - 11.5% of total supply is reserved for airdrops and an additional 1.1% is earmarked for DAOs. The remaining 44% will go to investors and employees of Offchain Labs, the development firm that built Arbitrum. Additionally, Arbitrum has released a development kit for building a layer-3 solution on top of the Arbitrum code base, called Arbitrum Orbit.

Ethereum developers have announced that the Shanghai hard fork, also known as "Shapella," will take place on or around April 12, marking the completion of Ethereum's transition to a proof-of-stake network. The upgrade will also enable staked ETH withdrawals. The date is expected to be confirmed via GitHub, slot 6209536, after it is voted on by developers, and it will be slightly delayed from the initial target for this month.

On-Chain

A record-breaking $1 billion Bitcoin transaction has been processed to the address 3M219KR5vEneNb47ewrPfWyb5jQ2DjxRP6, marking the largest on-chain BTC transfer this year. The address, which held a peak of 143,310 BTC in October, was emptied in November but now contains 40,141 BTC again (@santimentfeed).

Significant changes have occurred in Ethereum's large address holdings. Addresses with 10 to 10,000 ETH have collectively increased their holdings by 3.61 million coins over the past year. Conversely, addresses holding between 10,000 and 10 million ETH collectively sold off 9.43 million coins during the same period (@santimentfeed).

Crypto Derivatives

  • BTC and ETH funding rates remain positive; ETH funding rate falls back to 0.0067% on Binance
  • 30-day ATM IVs decreased to 57.44% and 56.77% for BTC and ETH respectively
  • 30-day 25 delta put skew rose to 3.77% and -0.76% for BTC and ETH respectively as BTC returns to put premium

Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:

Net Annualized APR

Perp (USDT pair)

Long on

Short On

26.45%

SOL

OKX

BYBIT

23.70%

BNB

OKX

BINANCE

17.80%

ETH

OKX

BYBIT

Source: @CexyArbBot Telegram

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps 

2) CEX observed include Binance, Bybit, OKX & DYDX

@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo

For futures, total liquidations over the past 24 hours amount to $90.62M with the majority coming from shorts at $51.74M.

On the options front, the term structures in backwardation for both BTC and ETH. BTC near-term IV spiked going into the end of the week. Call premium on BTC skew continues to climb and might be an indication of bullish sentiments. With RV continuing to rise, the variance risk premium becomes increasingly negative as it reaches -23% for Bitcoin and -21% for Ethereum.

The flow of BTC options suggests that traders are primarily focused on long-dated options expiring on June 30th at a strike price of $45K. The most popular strategy for BTC is the bull call spread, with a notional value of $135.08M in the past 24 hours, indicating traders are looking to capture the next leg up. Today, there are a significant number of puts and calls expiring, with 21.6K call contracts and 23.8K put contracts having a combined notional value of $1.13B. The put options expiring on March 17th are primarily concentrated between the 18K and 24K strike price, which may lead to BTC cascading downwards if it falls below the $24.9K price level.

Lastly, the VIX fell to 22.99 as the market stabilized.

Crypto Technical Analysis

Onto TA, BTC has broken the critical resistance of $25K and is currently trading at $25.7K and rising at the time of this writing. However, the possibility of a fakeout cannot be eliminated as one more resistance can be observed at the upper trendline where investors could see a slight retracement to the 25K level. However, if BTC breaks the trendline at approximately 26.5K, a bull run can be expected until the next resistance at roughly 31K, indicating a 17% potential upside.

As for ETH, price has followed suit of the BTC movement at a slight time lag. The previously observed $1.68K resistance was broken with price trading towards the next resistance level at $1.77K at the daily level with serves as another strong resistance with the horizontal shoulder line from Sep last year and the upper trendline from local higher highs. RSI has risen slightly to 61.0 and 63.9 respectively for 1D and 4H which are still within the normal range and could indicate potential further upsides to the market.

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