🌳 Biden Deepens Maritime Ties With Japan And Phillippines Against China; SBF Appeals For Fraud Conviction

12 Apr 2024, Friday

2:32 AM

🌳 Biden Deepens Maritime Ties With Japan And Phillippines Against China; SBF Appeals For Fraud Conviction

BTC

ETH

S&P Futures 500

$70,266.14

$3,521.17

$5,245.50

(-0.33%)

 (-0.32%)

(+0.90%)

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

  • President Biden deepens ties with Japan and Philippines against China; Economists call China’s tariff threats “more bark than bite” (More in Macro & TradFi)
  • SBF appeals for fraud conviction; Blackrock’s BUIDL fund enables USDC transfer features for trading its shares (More in DeFi & CeFi)
  • UTXO trends suggest the market is yet to peak; Memecoins gain traction following BTC’s rally (More in On-Chain)
  • 30-day 25-delta skew (C-P) for both BTC and ETH declined into negative territory; BTC ATM IVs on a steady decline (More in Crypto Derivatives)
  • BTC shows bullish pattern potential; ETH stability challenged by recurrent resistance at $3.65K (More in Crypto Technical Analysis)

Macro & TradFi

President Joe Biden emphasized the commitment to strengthening maritime and security ties with Japan and the Philippines during the first trilateral summit among the nations at the White House. Biden assured the allies of the United States' unwavering defense commitments, stating that any attack on Philippines aircraft, vessels, or armed forces in the South China Sea would invoke the mutual defense treaty. The summit focused on addressing tensions in the South China Sea, particularly around the Second Thomas Shoal, where the Philippines maintains a grounded World War II-era ship. The leaders agreed to enhance military exercises and maritime security cooperation, including joint patrols and training exercises. They also condemned the coercive tactics and maritime militia vessels used by China in the South China Sea. Additionally, discussions covered cooperation on technology, clean energy, semiconductor supply chains, and telecommunications, aiming to counter China's influence in the region and offer alternatives to Chinese investments in developing countries. The summit marked the beginning of a new trilateral chapter between the three nations.

Meanwhile, the Biden administration has signaled a tougher economic stance against China, as President Biden met with Japanese Prime Minister Fumio Kishida to announce strengthened military collaboration and economic ties. Treasury Secretary Janet Yellen also delivered stern messages during her visit to China, expressing concerns about overcapacity in clean energy products and hinting at potential tariff hikes on Chinese imports if the issue persists. China has denied these accusations, labeling them as groundless and accusing the U.S. of adopting protectionist trade policies. While these moves may serve as talking points for Biden's 2024 campaign, economists view them more as political gestures than effective economic strategies. Tariffs, in particular, are seen as temporary measures that may have unintended consequences, such as burdening American importers and consumers while Chinese exporters find loopholes to mitigate the impact. Overall, while these actions may provide short-term political gains, their long-term effectiveness in addressing structural issues in the U.S.-China economic relationship remains uncertain.

Lastly, Tech giants led a market rally on Thursday as investors evaluated mixed inflation data. The Nasdaq Composite surged 1.7%, while the S&P 500 gained 0.7% and the Dow Jones Industrial Average remained flat. Encouraging wholesale inflation data, with the Producer Price Index (PPI) increasing 0.2% in March, offered some relief after the previous day's disappointing Consumer Price Index (CPI) report. Core inflation held steady, contrasting with the uptick in headline inflation, suggesting uncertainty about the Federal Reserve's interest rate policy. Apple led the Dow, climbing 4.3% on plans to revamp its Macs with new AI chips, while Nike rose 3.4% after an upgrade. Tech giants like Nvidia and Alphabet lifted the S&P 500, while insurance companies and financials faced challenges. In the Nasdaq 100, Broadcom and Micron advanced amid a broad tech rally, while Fastenal and Regeneron Pharmaceuticals faced declines due to poor earnings and legal issues, respectively. Q1 earnings season will kick off with JPMorgan and Citigroup today.

CeFi & DeFi

  • SBF appeals fraud conviction
  • Circle enables USDC transfers for BlackRock’s first tokenized fund
  • Ubisoft teases new blockchain game at Paris Blockchain Week
  • El Salvador’s newest Hilton hotel to tap into tokenized debt on Bitcoin
  • Montenegro’s Justice Minister to decide on Do Kwon’s extradition after court ruling
  • Chainlink aims to bolster cross-chain security via Transporter

On Thursday, legal counsel representing Sam Bankman-Fried, founder of FTX, filed an appeal of his recent conviction on federal charges of fraud and conspiracy. The appeal also contests the imposed 25-year prison sentence. As anticipated, the appeal will proceed before a three-judge panel of the Second Circuit Court of Appeals, located in Manhattan. If SBF's appeal is unsuccessful before the Second Circuit, he could then petition the Supreme Court of the United States to consider his case. However, the likelihood of the Supreme Court granting such a petition is demonstrably lower. 

Meanwhile, in a significant move in the digital assets space, BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), the pioneering tokenized fund established by BlackRock, has expanded its functionality to enable transfers to Circle utilizing the USDC stablecoin. Circle officially announced on April 11 a new smart contract functionality that would allow BUIDL holders to transfer their shares to Circle for USDC, enabling the frictionless transfer of BUIDL shares in exchange for USDC to Circle on the secondary market. This represents the growing adoption of digital assets and tokenization of real-world assets by major institutions, reducing friction and enabling investors to move their assets at a faster pace and lower cost.

On-Chain

A CryptoQuant analysis showed that BTC's UTXO age bands suggest an upward pattern signaling continued new investor inflow. In 2017, the peak occurred nine months following such an influx, while in 2021, it took seven months. Now, in 2024, we're observing this trend three months in. Considering past cycles, it seems the market has yet to reach its apex. The anticipated continued capital from US spot BTC ETFs could provide additional upward momentum for BTC's price this year. For market participants, this analysis indicates that there may still be potential for more growth in the market.

Elsewhere, Santiment’s analysis on the Memecoin sector shows a resurgence as BTC surpasses the $70K mark. Notable performers like DOGE and emerging coins such as TRUMP and AIDOGE registered substantial growth in market cap. This performance divergence is steering capital and interest towards meme coins, marking a shift within the crypto market's profit allocation over the last week.

Crypto Derivatives

  • Funding rates remain positive for both BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH declined to 68.30% and 71.41%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH decreased to -0.46% and -3.13% respectively.
  • The futures market witnessed $134.97M in liquidations, with shorts representing 59.8%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

26.75%

SOL

Bybit

dYdX

23.81%

SOL

OKX

dYdX

20.25%

ETH

Bybit

dYdX

Notes:

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.


The 7-day and 30-day implied volatility (IV) for BTC is experiencing a declining trend, currently situated at 59.10% and 66.20% respectively. This reflects traders’ diminishing expectations for volatility in the market, coinciding with the recent over-shot CPI data release, which may have diminished expectations for a Fed rate cut in June, resulting in traders expecting less volatility in the short to mid-term.

The term structure for BTC exhibits a contango-shaped curve with implied volatility over short to mid-term tenures, followed by a gradual leveling off into longer-term maturities. This suggests that market participants anticipate higher volatility in the near term, which gradually stabilizes over time.

The BTC 25-delta skew chart 7-day and 30-day implied volatility (IV) underwent a significant taper as both entered negative territory, at -1.57 and -0.38 respectively. This signifies that traders hold a bearish sentiment over the short to mid-term in the options market, possibly linked to the recent CPI data release mentioned previously.

Lastly, @Paradigm has spotlighted option flows, with the market favoring put skew over call skew until May expirations. For BTC, the major transactions included the purchase of 150x 19-Apr-24 71K Call sold and 100x 12-Apr-24 71.5K Call bought. Additionally, ETH transactions involved the acquisition of custom structures: 3000x 26-Apr-24 3.2K Put bought, 3000x -1.00-Call-26 Apr 24 3.6K -1.00-Put-28 Jun 24 2.6K +1.00-Put-28 Jun 24 3.1K Custom bought and 2250x 26-Apr-24 3.6K Call sold.

Crypto Technical Analysis

Moving on to technical analysis, BTC is exhibiting resilience as it maintains its position within an ascending triangle pattern on the 4-hour chart, a bullish formation suggesting a continuation of the uptrend upon a decisive breakout. Currently, BTC’s price oscillates around the $70K level, confronting resistance at $72K, which it has yet to surpass. Should buyers gather momentum and the price successfully breaks above this level, the next significant resistance lies at $74K, marking a potential increase of approximately 2.8% from the present value. On the downside, if the ascending triangle's support falters, we may see a retest of the $65K support zone, implying a decline of about 6.2%. The market seems to be in a neutral stance, awaiting a catalyst that might tip the balance and direct the next significant move.

With ETH, the price is currently at a crucial juncture, failing to surpass the resistance level of $3.65K. This level has proven to be a formidable barrier for the bulls, with six unsuccessful attempts in the last 30 days. The persistence of this resistance suggests a significant psychological barrier in the market, potentially solidifying it as a key level for future price action. The nearest key support level to watch is $3.4K, representing a potential decrease of 6.5% from the current price.

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