🌳 Biden Signs A $95B Foreign Aid Bill; Renzo’s ezETH Experienced A Flash Depegs to $688 Following The End Of The Airdrop Farming Campaign

25 Apr 2024, Thursday

2:43 AM

🌳 Biden Signs A $95B Foreign Aid Bill; Renzo’s ezETH Experienced A Flash Depegs to $688 Following The End Of The Airdrop Farming Campaign

BTC

ETH

S&P Futures 500

$64,552.49

$3,158.03

$5,081.25

(-3.29%)

 (+2.20%)

(+0.75%)

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 signed a bill to provide support to several foreign nations; Meta stock declines by 16% in post-market trading (More in Macro & TradFi)
  • Renzo’s ezETH depegs to $688; Chainlink launches CCIP (More in DeFi & CeFi)
  • Multiple whales took advantage of the ezETH depeg event, earning millions in profit in a matter of hours (More in On-Chain)
  • Over $150M longs liquidate; ATM IVs continue to decline (More in Crypto Derivatives)
  • BTC consolidates post-downtrend; ETH encounters resistance, testing key price levels (More in Crypto Technical Analysis)

Macro & TradFi

President Joe Biden signed into law a $95 billion foreign aid bill, providing assistance to Ukraine, Israel, Taiwan, and other nations while also mandating Chinese parent company ByteDance to sell TikTok within nine months or face a nationwide ban in the U.S. Biden praised the bipartisan effort that led to the bill's passage after months of political battles, acknowledging the difficult path it took to reach his desk. The law allocates $60 billion to Ukraine, $26 billion to Israel, and $8 billion for security in Taiwan and the Indo-Pacific region. TikTok has vowed to challenge the measure in court, calling it unconstitutional, while Biden's reelection campaign plans to continue using the platform for at least the next year. The bill faced heated political attacks and threats but ultimately passed in response to bipartisan pressure following Iran's attempted strike on Israel. House Speaker Mike Johnson, who initially stalled the bill, defended the decision to move it forward, stating it was the right thing to do.

Meanwhile, Meta's shares plummeted 16% in after-hours trading following a disappointing outlook despite surpassing first-quarter earnings expectations. The social media giant reported earnings per share of $4.71 and revenue of $36.46 billion, showing a significant increase in both metrics compared to the same period last year. However, its second-quarter sales forecast of $36.5 billion to $39 billion fell short of analysts' estimates, leading to the stock sell-off. CEO Mark Zuckerberg highlighted investments in artificial intelligence and mixed reality, aiming for future monetization. The company's "family daily active people" metric reached 3.24 billion in March 2024, reflecting a 7% increase year-over-year. Meta's improved financial performance in recent quarters has heightened investor expectations, driving the stock up 40% this year. Despite efforts to streamline operations and boost efficiency, including job cuts and reduced hiring, Meta faces challenges in its Reality Labs unit, which reported significant losses.

Lastly, on Wednesday, U.S. stocks experienced minimal movement, with the Nasdaq Composite edging up 0.1%, the S&P 500 finishing flat, and the Dow Jones Industrial Average slipping 0.1%. Treasury yields and the dollar rose, while oil and gold futures dipped slightly. In terms of individual stocks, Coca-Cola (KO) and Walmart (WMT) led gains in the Dow, while Boeing (BA) faced a 2.9% decline despite reporting a smaller-than-expected loss in the first quarter. In the S&P 500, Tesla (TSLA) soared 12.1% after Musk's announcement on new model releases, while Hasbro (HAS) and Boston Scientific (BSX) also posted significant gains after beating earnings estimates. Enphase Energy (ENPH) slid 5.6% after its earnings and guidance fell short. The top performers in the Nasdaq 100 were CoStar Group (CSGP), which surged 8.9% after reporting strong earnings, and Texas Instruments (TXN), which rose 5.6% on an optimistic sales forecast. Elsewhere, the Tokyo CPI and the BoJ interest rate decision are due on Friday.

CeFi & DeFi

  • Renzo’s ezETH de-pegs over 75% to $688
  • Chainlink launches long-awaited CCIP
  • Hong Kong spot BTC and ETH ETFs structures revealed
  • Do Kwon appeals court decisions

Renzo Protocol’s ezETH, a restaked ETH token, experienced a significant price depeg, dropping to $688, following the end of its Season 1 airdrop farming window. This incident, which caused temporary instability, resulted in one trader profiting nearly $400,000 from the price fluctuation. The sell-off that led to the depegging was attributed to users selling their ezETH to reclaim ETH for use in other protocols, showcasing the risks and volatility associated with liquid restaking tokens (LRTs). Despite this, Renzo remains the second-largest liquid restaking protocol by Total Value Locked, with its popularity further boosted by the inclusion of its upcoming REZ token in the Binance launch pool.

In other news, Chainlink has officially launched its Cross-Chain Interoperability Protocol (CCIP), enhancing the ability of developers to perform cross-chain token transfers and interact with smart contracts across different blockchain networks. This initiative aims to simplify and secure cross-chain activities, promoting greater connectivity across nine major blockchains, with plans for further expansion. This move addresses significant interoperability challenges within the industry and positions Chainlink as a leader in facilitating secure, efficient cross-chain transactions, potentially unlocking substantial value in tokenized assets for financial institutions.

On-Chain

Many traders seized the opportunity presented by the ezETH depeg yesterday, engaging in arbitrage to restore the price to normality. Notably, @spotonchain identified a savvy whale who capitalized on the ezETH depeg, raking in 193 ETH, valued at approximately $600K, in just four hours. The whale sprang into action as the ezETH depegged by 15%, initiating purchases during the dip caused by selling pressure and insufficient liquidity on Uniswap. Subsequently, the wallet executed multiple transactions, consistently swapping ETH for ezETH as the peg was gradually restored. Thus far, the whale has exchanged 4,499 ETH for 4,692 ezETH and continues to accumulate more ezETH while the price remains below the 1:1 peg, suggesting further profit potential ahead.

Crypto Derivatives

  • Funding rates are positive for BTC and ETH.
  • The futures market witnessed $194.08M in liquidations, with longs representing 79.8%.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remain relatively flat at 62.21% and 69.17%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to -1.48%, while ETH also dropped to -5.48%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

22.04%

BNB

Binance

ByBit

21.05%

AVAX

OKX

dYdX

20.16%

AVAX

OKX

ByBit

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.


Today's BTC implied volatility chart shows the 7-day IV has dipped to 56.69%, a 4% decrease from yesterday's 59.03% while the 30-day IV is also down to 59.68%, falling by 3.2% from 61.69%. These drops in short and medium-term IV are signs of a calming market, moving away from the earlier volatility spikes. It indicates that the market is settling into a steadier rhythm after the halving, with traders appearing less anxious about sudden price changes.

Today's BTC term structure continues to show a contango shape, indicating expectations of higher future volatility relative to the present. The forward curve exhibits a slight flattening, which could be interpreted as increasing market confidence in the stability of BTC's price over the long term, suggesting a gradual adjustment to a post-halving environment with less anticipated volatility.

Today’s BTC 25-delta skew chart reveals a consistent market temperament. The 7-day skew remains near zero, indicating zero directional bias in the immediate term, while the 30-day skew persists in its slight negative territory, suggesting a subtle cautious stance is still prevalent among traders as they navigate through longer-term market uncertainties. These readings maintain the trend noted yesterday, suggesting that the market has reached a continued balance post-halving.

@Paradigm reported that notable BTC option trades included an 800x contract custom strategy with calls for 31 May and 28 June at $110K and $160K, a 300x contract Bull Risk Reversal for 27 December at $55K/$100K. Additionally, 250x Puts for 3 May at $58K were acquired, and a 240x contract Call Calendar for 10 May $69K / 31 May $71K was bought. There was also a sale of a 150x contract Straddle for 26 April at $66K. In ETH options, trades involved buying 3,000x Calls for 3 May at $3.4K, and selling a Put Fly for 26 April. Moreover, 1,500x Puts for 31 May at $2.7K were sold, 1,250x Calls for 31 May at $3.6K were bought, and a Put Spread for 26 April at $3.2K/$3.1K was sold.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC’s price action is currently exhibiting a consolidation pattern, with price oscillating around the $64.5K mark. This consolidation comes after a previous downtrend, evident from the series of lower highs connected by the descending trendline. Should the current level be decisively breached, the next significant support lies near the $58K zone, which would represent a decline of approximately 10% from the current price levels. Conversely, resistance is found near the $65K region. The RSI's horizontal trend indicates a balance between buying and selling pressures.

On the other hand, ETH is currently trading near $3.162K after facing rejection at the $3.3K resistance level, indicating a possible struggle to gain upward momentum. The rejections at this level suggest that $3.3K is acting as a substantial barrier for bulls, requiring significant buying pressure to breach. Should sellers take control and push ETH below its current trading range, the next support level is likely found at around the $3K mark, representing a potential decrease of approximately 3.88% from the current levels. On the upside, if buying pressure prevails and ETH overcomes the resistance, we could see an attempt to test higher levels toward the $3.6K resistance.

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