S&P 500 Futures
Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)
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Our Daily View
What We Are Covering Today
- Japan seems en route to monetary policy normalization; DM bonds sold off (more in Macro & TradFi)
- MetaMask adds Optimism and Arbitrum to its swap function; 58.95% vote in favor of redirecting fees generated to Sushi treasury (more in DeFi & CeFi)
- Overall BTC supply becoming more decentralized as percentage owned by retail continues increasing (more in On-Chain)
- ETH traders look to profit from short-term price movement to the upside with calendar call spread (more in Crypto Derivatives)
- BTC and ETH rebound but fail to reclaim key levels (more in Crypto Technical Analysis)
Macro & TradFi
BOJ shocked the market with a policy tweak, changing the yield-curve-control (YCC) target of 10-year JGB target from 0.25% to 0.5%, sending shockwaves across developed market (DM) rates, especially US Treasury. The decision essentially meant that the Japanese central bank is willing to tolerate more yield upside and reduce bond purchasing, which many investors see as the sign for the world's last low-interest rate stronghold to start normalization. JPY strengthened on the news as USDJPY dipped below 130 for the first time since Aug, and 2-year JGB yield rose above zero for the first time since 2015. The global market watches the next steps from BOJ closely, as the lesson from UK’s policy misstep under ex-PM Truss crushing DM rates earlier this year remains fresh.
US stocks managed to avert another down day despite bond yields jumping higher. NASDAQ found support at $10,600-$11,000 demand area, closing 0.1% higher; S&P closed 0.3% higher and DOW 0.55% up. US Treasury bond curve so steepening as duration sold off on BOJ surprise; 10-year yield jumped more than 10bps, seemingly to have formed a double bottom at 3.5% technical level from daily chart, spelling bad omen for traders looking for further upside.
DeFi & CeFi
- Y2K Finance launches its token $Y2K
- Waves founder to launch new stablecoin and provide $USDN resolution plan.
- MetaMask adds Optimism and Arbitrum to its swap function
- Binance joins the Chamber of Digital Commerce Executive Committee
- Helio, a stablecoin protocol, resumed protocol services except for liquidation after completing its internal security checks
- Drift Protocol V2, a Solana-based decentralized perpetual futures market, is live on Mainnet
- Sushi DAO voted to divert exchange trading fees to the project's treasury
Drift V2 supports leveraged perpetual trading, spot trading, and cross-collateral deposits. Users may borrow, lend, and earn yield on deposits and staked deposits. Drift can do this with one capital pool. The Drift V2 Liquidity Trifecta, which combines Just-in-Time Auction Liquidity, AMM Liquidity, and Orderbook Liquidity, is a major breakthrough.
Sushi DAO directed exchange trading fees from token holders to the project's treasury for about a year. SushiSwap needs additional short-term financing while improving its long-term sustainability. The Snapshot voting page shows 58.95% support, with GoldenChain, the digital investment arm of Golden Tree, and Cumberland's wallet providing 10 million SushiPowah tokens (Sushi DAO governance token) to pass the vote. Combined, their votes accounted for 91% of the 11 million tokens in favor of the proposal.
Looking on-chain, the percentage of BTC supply held by retail has risen to 17% this year, which indicates that in spite of a lackluster year of performance, retail interest is still present and BTC purchases still continue to increase.
Elsewhere, the number of new unique addresses per day on Arbitrum and Optimism has continued to increase, with both Layer 2s adding around 11,000 new addresses per day (@Dynamo_Patrick). Layer 2s are continually experiencing strong growth and adoption as the year comes to a close.
- BTC and ETH funding rate remains positive
- BTC 7-day and 30-day ATM IV fell from 46 to 40 and 54 to 51 respectively
- ETH 7-day and 30-day ATM IV fell from 61 to 55 and 66 to 63 respectively
- ETH 25-delta skew increased from 14% on 15 Dec to 20% currently
An increase in ETH’s skew indicates that there is currently more demand than supply for put options. This might be a bearish indicator as it shows that option writers are less willing to provide downside protection.
The most traded strategy in the past 24 hours for ETH is the bull call spread. However, different from the usual bull call spread, it seemed that both the short and long legs were above the current spot price of ETH.
Crypto Technical Analysis
Onto TA, BTC rebounded and attempted to reclaim $17K last night but fell just short of it - closing below $17K. Price spiked before quickly losing momentum as it looked to be making a U-turn. RSI on the H4 does not show promise as it rose to 50 but fell short there.
Looking at ETH, a large spike was seen as well, attempting to reclaim $1.2K before stalling at that level. RSI found itself at the 60s level as price wicked at $1.22K. Should price find support at $1.19K, it may have a good chance of reattempting a move up. Breaking below this level, however, will likely result in weaker price action and could move to a low of $1.15K.
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