🌳Asia-Pacific markets await Australia’s rate decision; BlackRock’s ETF Application Refiled With Coinbase As The New Partner

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Our Daily View

What We Are Covering Today

• Janet Yellen's upcoming trip to Beijing Yellen's meeting in Beijing aims to foster US-China engagement; Asia-Pacific markets await Australia’s rate decision (more in Macro & TradFi)
• AzukiDAO votes to claw back 20,000 ETH from Zagabond; BlackRock’s ETF application refiled with Coinbase named as ‘Surveillance-Sharing’ partner (more in DeFi & CeFi)
• BTC MVRV ratio reaches the highest point since May 2021; Lido’s stETH remains dominance in the Liquid Staking space post Shanghai upgrade (more in On-Chain)
• BTC's ATM implied volatility maintains steadiness; contango in term structure (more in Crypto Derivatives)
• BTC continues to trade in last week’s range; ETH’s relative underperformance to BTC persists (more in Crypto Technical Analysis)

Macro & TradFi

Treasury Secretary Janet Yellen's upcoming meeting with Chinese officials in Beijing is seen as a significant move by the U.S. to foster engagement with China amidst longstanding economic rivalry. The U.S. is reportedly considering restrictions on AI chip exports from China, adding to the ongoing economic conflict between the world's two largest economies. Yellen aims to emphasize the importance of responsible management of the U.S.-China relationship and address global challenges in her discussions with Chinese officials.

Global stocks extended their rally on Monday, with pan-Asian stocks (excluding Japan) surging 1.5% for their best performance in a month. Wall Street also saw gains, driven in part by Tesla's near-7% rally due to the new sales record that beat Wall Street consensus. The focus in Asia now shifts to Australia and the Reserve Bank of Australia's (RBA) interest rate decision. Inflation slowed to 5.6% in May, though still above the RBA's target range of 2-3%, leaving the possibility of further tightening measures. Other key developments for Tuesday include South Korea's inflation data for June and Germany's trade balance for May.

On Monday, U.S. stocks ended marginally edged higher, with the S&P 500 gaining 0.1%, the Dow Jones Industrial Average up less than 0.1%, and the NASDAQ rising 0.2%. The benchmark 10-year U.S. Treasury yield also saw a slight increase, reaching 3.856% from 3.818% on Friday.

DeFi & CeFi

• AzukiDAO approves proposal to hire lawyer to reclaim 20,000 $ETH from Zagabond
• BlackRock refiles Bitcoin ETF application with Coinbase as ‘Surveillance-Sharing' partner
• Singapore's MAS orders crypto firms to keep customer assets in a trust by year-end
• South Korea passes crypto bill for user protection
• BAYC NFT floor price sinks to 20-month low
• Binance introduces Pendle ($PENDLE) on Launchpool

Following the botched release of “Elementals”, AzukiDAO, the unofficial community-built decentralized autonomous organization, has initiated a proposal to hire a lawyer and file a lawsuit against Zagabond, seeking the return of 20,000 ETH and alleging fraudulent activities. If successful, the retrieved funds will be allocated to the AzukDAO to support its growth and provide incentives to artists, content creators, and builders. A group of Azuki NFT holders is currently voting on the proposal, expressing their disappointment and raising allegations of scamming by the team. With the AzukiDAO currently composed of 72 members, the proposal has received 36 votes, with a significant portion of "yes" votes coming from a single holder.

Elsewhere, NASDAQ has resubmitted its application to list BlackRock's proposed Bitcoin Spot ETF and has included Coinbase as the designated market for surveillance-sharing. This move follows feedback from U.S. securities regulators, who deemed previous filings "inadequate" without the inclusion of the partner in surveillance-sharing agreements. Coinbase shares jumped 13% on the news, as exchange operator Cboe announced its collaboration with the crypto company in launching a spot Bitcoin ETF. Additionally, Cboe has filed an application with the SEC to launch a Bitcoin ETF with asset manager Fidelity, naming Coinbase as the platform responsible for monitoring ETF manipulation.

On-Chain

@Santiment, as BTC attempts to surpass the resistance level at $31.3K, the normalized MVRV ratio that indicates traders' profitability and asset valuation, has reached its highest level since May 2022. This suggests that, on average, traders are currently in a profitable position, indicating a potential market cooldown as they take profits. Additionally, the chart reveals that BTC has outperformed other major altcoin assets significantly, with UNI and SHIB traders having notably negative MVRV ratios, placing them at the bottom of the list.

On the other hand, @glassnode has recently published an analysis on market preferences within the liquid staking sector following the Shanghai upgrade on ETH mainnet. In the past three months, Lido's stETH has maintained its dominance as a leading asset in the liquid staking space, despite facing strong competition from Rocketpool's rETH and Frax's SFRXETH. Since enabling withdrawals by the three protocols, stETH has exhibited the highest growth in daily new addresses holding the token, with an average range of 230 to 590 new addresses per day. This growth significantly outpaces that of Rocketpool and Frax.

Crypto Derivatives

• BTC and ETH funding rates remain positive
• Deribit Implied Volatility Index (DVOL) is 48.92% and 48.03% for BTC and ETH respectively
• 30-day 25-delta skew (C-P) for BTC and ETH is at 5.56% and 4.72% respectively
• Over the last 24 hours, the futures market witnessed liquidations totaling $65M, with short positions comprising 63% of the overall liquidated positions.

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

The Implied Volatility (IV) of BTC has remained elevated following the news of BlackRock's spot Bitcoin ETF filing. Yesterday, IV experienced a significant increase, largely driven by volatile price movements after Nasdaq refiled BlackRock's Bitcoin ETF application with the SEC.

The BTC term structure remains in contango, with a day-on-day rise in IV across all tenors. IV for medium-tenors were up notably; at 4.29% for 87-DTE and 2.79% for 269-DTE.

BTC Constant Maturity Skew (P-C) at 25 Delta continues to reflect a negative skew. Both the 7-day and 30-day skew has become more negative over the past trading day, in favor of calls. Options skew has become increasingly negative over the past month.

According to data from @Paradigm, the top traded structures during the American session were: 500x 25 Aug 2023 $30K / 29 Sep 2023 $30K call calendars sold, 380x 25 Aug 2023 $40K / 29 Sep 2023 $40K call calendars bought, and 250x 6 Jul 2023 $31.5K calls bought outright. Alongside these, two significant positions were taken in the put and call spreads, with 250x 29 Sep 2023 $28K puts bought and 248x 28 Jul 2023 $32K/$38K call spreads bought. This suggests that traders are hedging their bets but still leaning towards potential upward movements for BTC.

Crypto Technical Analysis

BTC gained 2% yesterday but has not breached the previous week's resistance at $31.45K, continuing to trade within that range. A substantial catalyst and increased volume are needed for a potential breakout. Currently, trading indicators present mixed signals regarding the strength of the trend. The Average Directional Index (ADX) at 40, with the +DMI above the -DMI, suggests a robust upward trend. However, the MACD indicates a weakening trend as the moving averages converge.

ETH gained almost 1% yesterday, approaching the critical resistance at $2K. ETH shows bullish momentum according to the MACD as it broke out of last week's trading range between $1.83K-$1.9K. However, the ADX at 14 indicates a weak trend at present. In the downside scenario, potential support levels can be identified at $1.9K and $1.83K.

ETHBTC traded lower yesterday as it nears the 0.0625 horizontal support level. If the downward trend persists, ETH would continue to underperform, with ETH/BTC declining to the bottom trendline, near the 0.06 level.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Read Past Issues

Daily Readings

TradFi

• Spread between 2- and 10-year Treasuries at deepest inversion since '81

• Saudi Arabia, Russia deepen oil cuts, sending prices higher

• Asia-Pacific markets largely fall ahead of Australia's rate decision.

• Russia's Medvedev cites risks of nuclear war; Moscow calls loss of Wagner forces 'no threat'.

• EU antitrust regulators set Aug. 7 deadline for Adobe, Figma deal

• Remittances to Mexico hit record, but strong peso softens impact

• Brazil economists foresee deeper monetary easing, lower inflation

• GIFT Nifty begins India journey as new hedging option for investors

• Bahrain signs deals to invest $1.3 bln in UK economy

• Global factory output slumps as weak demand weighs

• South Korea consumer inflation hits 21-month low

Crypto

• BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner.

• Credit Suisse and Swiss Football Association To Release Women's Football NFT Collection.

• Hong Kong Sets Up Task Force for Web3 Development.

• Singapore's MAS Orders Crypto Firms to Keep Customer Assets in a Trust by Year-End.

• AzukiDAO Votes on 'Reclaim' of 20K Ether After Botched Elementals NFT Mint.

• UK Law Commission recommends ‘distinct’ legal category for crypto.

• SEC has pushed investors into ‘toxic’ crypto products and FTX: Winklevoss.

• Poly Network urges users to withdraw after exploit affects 57 crypto assets.

• Kyle Davies evokes karma, says he'll donate some OPNX earnings to 3AC creditors

• Infrastructure overtakes NFT and gaming as the most popular destination for crypto VC

• Optimism, Aptos, and ApeCoin Set for Significant Unlock in July

• Binance Introduces Pendle ($PENDLE) on Launchpool

Deal Flow

• Privacy startup Ola raises $3 million in seed funding

Yours sincerely,
Treehouse Research 🌳