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Our Daily View
What We Are Covering Today
- Biden administration drafts a careful response to the attack in Jordan; Elon Musk starts the human clinical trial for Neuralink (More in Macro & TradFi)
- Hong Kong embraces Bitcoin ETFs; U.S. charges HyperFund scheme for fraud (More in DeFi & CeFi)
- SOPR dips below 1; $MKR whale dumps over $5M with close to $4M left (More in On-Chain)
- 30-day 25-delta skews remains positive; Bullish sentiment persistent (More in Crypto Derivatives)
- BTC shows bullish channel breakout; ETH tests ascending wedge, both above key SMAs (More in Crypto Technical Analysis)
Macro & TradFi
The Biden administration is navigating a response to a deadly drone attack on US forces in Jordan, aiming to deter Iran and its proxies without escalating to direct warfare. The attack, resulting in the death of three US soldiers and injuries to several others, has prompted calls for a forceful response, with Republican Senator Lindsey Graham urging to "hit Iran hard." While the US has not directly blamed Tehran, it implicates Iran-backed militant groups operating in Syria and Iraq. The likely scenario involves targeting Iranian-aligned assets outside Iran, possibly focusing on the Islamic Revolutionary Guards Corps in locations such as Syria, Iraq, or Yemen. The challenge for President Biden is projecting toughness toward Iran without triggering a broader conflict or raising oil prices significantly.
Elsewhere, Elon Musk's neurotech startup, Neuralink, has successfully implanted its brain-computer interface (BCI) device in a human for the first time as part of its in-human clinical trial. The patient is reportedly "recovering well." Neuralink's initial product, called Telepathy, is aimed at assisting patients with severe paralysis in controlling external technologies using neural signals. The company's long-term goal is to enable individuals with degenerative diseases like ALS to communicate or access social media using their minds. The clinical trial is a crucial step in Neuralink's path toward potential commercialization, but the company has not disclosed the number of participants in the initial trial.
On Monday, stocks rose as investors geared up for a significant week of tech earnings and the Federal Reserve's first interest rate decision of the year. The Nasdaq Composite surged 1.1%, the S&P 500 added 0.8%, and the Dow Jones Industrial Average rose 0.6%. Notable earnings reports from major tech companies, including Microsoft, Alphabet, Apple, Amazon, and Meta, are anticipated this week. Salesforce led the Dow with a 2.9% rise, while Archer Daniels Midland gained 5.5% after an earnings report delay. Cruise operators, including Carnival Corp, Royal Caribbean, and Norwegian Cruise Line Holdings, outperformed as the world's largest cruise ship set sail. Amazon rose 1.2% after calling off its acquisition of iRobot. Investors will be awaiting US labor data, with JOLTs Job Openings due tonight at 23:00 SGT.
CeFi & DeFi
- Hong Kong SFC receives first spot Bitcoin ETF application
- DOJ and SEC unveil charges in $1.9 billion HyperFund cryptocurrency fraud
- Invesco Cuts Bitcoin ETF Fee In a Bid to Lure Investors
- Taproot Wizards Debut Sale of Bitcoin NFTs 'Quantum Cats' Marred by Tech Issues
- EU begins sorting MiFID-regulated securities out of crypto assets
- Jihan Wu will take over as Bitdeer CEO in March
The Hong Kong Securities and Futures Commission (SFC) recently received its inaugural application for a spot Bitcoin exchange-traded fund (ETF), signaling a significant shift in the region's cryptocurrency market. This move comes shortly after the U.S. Securities and Exchange Commission approved a similar ETF product. Harvest Hong Kong, a leading Chinese fund manager, initiated this application. The SFC is reportedly accelerating the approval process, aiming to launch Hong Kong's first spot Bitcoin ETF shortly after the Chinese New Year. This development is part of a broader trend, with at least 10 financial institutions in Hong Kong planning to introduce their spot BTC ETFs, including Venture Smart Financial Holdings targeting a 2024 launch. This initiative reflects Hong Kong's increasingly crypto-friendly regulatory environment, established in 2023, which has positioned the city as a key crypto hub in Asia. The SFC's proactive stance towards digital asset spot ETFs and existing crypto futures ETFs highlights Hong Kong's commitment to integrating cryptocurrencies into its financial landscape.
In other news, the U.S. Department of Justice and the Securities and Exchange Commission have unveiled charges against key figures in the HyperFund cryptocurrency scheme, a $1.9 billion fraud. Australian citizen Sam Lee, based in Dubai, along with promoters Rodney Burton and Brenda Chunga, face criminal charges for orchestrating this global Ponzi scheme, falsely promising high returns from nonexistent crypto mining operations. Chunga has pled guilty and agreed to SEC civil charges, including disgorgements. The scheme, also known as HyperTech, HyperCapital, HyperVerse, and HyperNation, lured investors from June 2020 to November 2022 with promises of daily returns, only to block withdrawals from July 2021, highlighting the fraudulent nature of their operations.
According to an analysis by CryptoQuant, the current SOPR metric shows values below 1, indicating that short-term investors are selling Bitcoin at a loss. The Short-term Holder Spent Output Profit Ratio (SOPR) is a metric measuring realized profit/loss for coins held for more than 1 hour and less than 155 days. When the SOPR value is above 1, it suggests a high percentage of short-term investors have realized a profit, while a value below 1 indicates a high percentage have realized a loss. This could be seen as a buying opportunity for whale investors, and the market may rebound soon. While not a foolproof indicator, it presents an opportunity for a good entry to capitalize on potentially favorable unit prices during market dips.
Recent on-chain analysis by @lookonchain indicates significant activity from a notable whale in the Maker (MKR) market. Over the past four days, this wallet has sold a total of 2,658 MKR tokens in exchange for 5.37 million DAI, at an average price of approximately $2,022 per MKR. This sale coincided with a notable 7.6% drop in the price of MKR, signaling a potential impact on the market by this whale's actions. The whale's remaining holdings amount to 2,007 MKR, valued at around $3.9 million at the current market rate. This suggests that the whale still has a substantial position in MKR, and market participants might be vigilant about the potential for further sales, which could exert additional downward pressure on MKR's price. Given this activity and the existing market conditions, traders and investors in the MKR market may need to exercise caution. The whale's actions could be indicative of a broader sentiment or strategic shift among large holders, which might affect the short-term price dynamics of MKR. As the market responds to these large transactions, watching the whale's next moves could provide insights into the future price trajectory of MKR.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 45.25% and 45.81%, respectively.
- The 30-day 25-delta skew (C-P) for BTC and ETH increased to 1.54% and 1.20% respectively.
- The futures market witnessed $98.4M liquidations, with shorts representing 69.4%.
Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram Bot
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.
BTC’s ATM IV has remained flat, with the 7-day IV hovering at 41.63, holding its parallels to the 30-day IV at 42.80. Such a convergence suggests a market consensus about near-term price certainty. This aligns with the broader market conditions where Bitcoin ETF flows might be stabilizing after previous fluctuations. The parallel movement between the short-term and long-term IV curves could indicate that traders' expectations for Bitcoin’s price volatility are becoming more uniform across different time horizons.
The term structure of BTC continues to maintain its contango shape, with the IV for short-term expiries seeing a dip from the previous day. This trend indicates a potential lack of interest among options traders in purchasing near-dated options in anticipation of forthcoming US labor data and major technology company earnings. This shift in trading behavior may reflect market expectations for stability in the short term.
The 25-delta call-put skews for Bitcoin continues its positive trend from yesterday. Both the 7-day and 30-day skews suggest a relatively bullish sentiment in the market. The current 7-day skew for Bitcoin options at 2.15%, is higher than the 30-day skew at 1.54%, which suggests that traders are anticipating more immediate volatility or a stronger upward price movement in the short term compared to the following month.
Lastly, @Paradigm emphasizes upside interest with notable call purchases. Key BTC trades involved the acquisition of 1055x 29-Mar-24 50k Calls and a significant 200x 16-Feb-24 45k Calls, both reflecting a bullish sentiment among traders, and there were no significant flows in ETH today.
Crypto Technical Analysis
On the 4-hour chart, BTC is exhibiting a clear ascending channel pattern, with the price currently breaking above the three simple moving averages of 50, 100, and 200 periods, an indication of bullish momentum. The price is currently hovering around $43.5K, displaying a persistent uptrend within the channel boundaries. If this bullish trend continues and the price breaks above the channel resistance, the next significant resistance level could be anticipated at around $46K, which would represent an approximate 5.7% increase from the current price level. On the flip side, should a reversal occur, the lower boundary of the ascending channel could provide support near $42K, a decrease of about 3.4%. The Relative Strength Index (RSI) is nearing overbought territory with a reading of 72.3, indicating an upward trend in buying pressure. This could suggest a growing bullish sentiment among market participants but also warrants caution as it approaches levels where pullbacks have historically occurred on the 2nd and 9th of Jan earlier this year.
Moving on to ETH, its price is approaching the upper boundary of an ascending wedge formation, with the current price around $2.316K. This pattern is typically associated with a continuation of the existing trend, which, in this case, is upward. Notably, Ethereum's price has recently ascended above the 50-period SMA, which may act as a dynamic support level in the short term. If the price successfully breaks through the wedge's upper boundary, the next level of resistance could be found near $2.44K, reflecting an increase of approximately 5.3%. Conversely, if the price were to retract, the lower boundary of the wedge might offer support near $2.25K, down about 2.9%. The RSI is trending upward, now at 62.1, signaling increased buying momentum; however, traders should monitor for any signs of divergence or overextension that could precede a potential price correction.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳