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Our Daily View
What We Are Covering Today
- Biden-Xi diplomatic tensions amidst APEC progress; U.S. Senate navigates shutdown, delays Ukraine-Israel aid (More in Macro & TradFi)
- BlackRock files S-1 form with SEC for iShares Ethereum Trust; Singapore to pilot use of wholesale CBDCs in early 2024 (More in DeFi & CeFi)
- Dogecoin's market surges with 5% increase and record 665M on-chain transactions; Solana whale unstakes 505,034 SOL, potentially shifting market liquidity dynamics (More in On-Chain)
- BTC's term structure signals contango; Trader sentiment shifts towards cautious optimism (More in Crypto Derivatives)
- Both BTC and ETH witness rapid declines, with ETH presenting a more bearish picture according to technical indicators. (More in Crypto Technical Analysis)
Macro & TradFi
President Joe Biden's recent labeling of Chinese President Xi Jinping as a dictator has complicated international relations. This comment, repeated at a press conference and originating from a previous statement in June, faced strong disapproval from China's Foreign Ministry, who labeled it a major political error. Nonetheless, the U.S.-China discussions at the Asia-Pacific Economic Cooperation (APEC) summit in California were considered fruitful, especially in managing the spread of fentanyl and improving military communications. The friendly nature of the meeting, marked by shared memories and a warm atmosphere, stood in contrast to the political language used. Biden's hopeful yet careful stance towards Xi, summarized by the principle "Trust but verify," illustrates the complex and varied nature of diplomatic interactions between the U.S. and China in today's global politics.
The US Senate, with a decisive 87-11 vote, passed a temporary funding bill to avert a government shutdown. This measure, already cleared by the House, awaits President Biden's signature. It defers a significant debate on government spending and, notably, does not include immediate aid for Ukraine and Israel, which Senate Majority Leader Chuck Schumer plans to address after Thanksgiving. Amidst this, House Speaker Mike Johnson faces opposition from some Republicans due to the absence of substantial spending cuts and immigration reforms. This political unrest has led Moody’s Investors Service to downgrade the US's credit outlook to negative. The bill extends funding for certain government sectors until January 19 and others until February 2, with Johnson stating his reluctance to support such short-term measures in the future. Concurrently, the White House's request for over $61 billion in additional aid for Ukraine, part of a wider $106 billion package including Israel and border issues, is complicated by Republican demands for strict border security reforms, indicating potentially tough bipartisan negotiations ahead.
In the latest trading session, the DJIA dipped by 0.13%, while the S&P 500 and NASDAQ Composite edged up by 0.12% and 0.07%, respectively. Walmart's shares fell 8.1%, and Alibaba saw a 9.14% drop after canceling a key spinoff, underscoring US-China tensions' impact on the tech sector. Oil prices declined sharply, with Brent crude down 3.18% to $78.60, and WTI falling 3.43% to $74.03, influenced by a significant rise in U.S. crude stockpiles and demand concerns.
DeFi & CeFi
- BlackRock files S-1 form with SEC for iShares Ethereum Trust
- Singapore to pilot use of wholesale CBDCs in 2024
- Gulf Binance plans to open to the public in Thailand in early 2024
- Tether plans major expansion into Bitcoin mining with $500M investment
- Strike rolls out Bitcoin purchases to users globally
- FBI arrests trio accused of bilking banks out of $10M
- CoinShares secures option to buy Valkyrie’s ETF unit
- Bitcoin is coming to Sushi, as it expands to ZetaChain
- Stablecoin issuers Paxos plans new USD-backed token for Singapore operations
- South Korea’s pension funds buys 280K Coinbase shares
BlackRock has submitted an S-1 form to the SEC for its iShares Ethereum Trust, signaling the development of a spot Ether (ETH) exchange-traded fund (ETF). The price of ETH briefly surged by almost 2% to $2,080 upon the news but later stabilized. The crypto market has shown significant reactions to ETF-related news, especially following recent court rulings against the SEC's rejections of spot crypto ETF applications, fueling optimism for potential approvals. BlackRock, among other asset managers, is also waiting for the SEC's decision on a spot Bitcoin ETF. CEO Larry Fink has notably shifted his stance on crypto, expressing newfound support for the industry.
In other news, Singapore plans to initiate live trials in 2024 of wholesale central bank digital currencies (CBDCs) for interbank payments, according to Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS). These wholesale CBDCs are distinct from retail CBDCs as they are intended for high-value interbank and institutional transactions rather than everyday transactions. MAS has been actively experimenting with CBDCs since 2016, including initiatives like Project Ubin, aimed at exploring the use of blockchain technology for payment and securities settlements. The upcoming pilot project involves collaboration with local banks to test wholesale CBDCs in domestic payments, utilizing tokenized bank liabilities to facilitate transactions between retail customers and merchants. This move departs from the current system’s separation of clearing and settlement processes, aiming instead to streamline them within a unified infrastructure.
Recent market insights from @santiment indicate a notable uptick in Dogecoin's performance, registering a modest 5% surge amidst a largely stagnant crypto market. This increase in Dogecoin's value coincides with a significant spike in on-chain transaction volume, reaching its highest level in three months at 665M. The combination of high transaction volume and increasing longs, along with rising funding rates, are key indicators for investors to understand the current state and potential bullish movements of Dogecoin in the market.
On the other hand, @Lookonchain has identified a significant move by a Solana (SOL) whale, who unstaked 505,034 SOL, equivalent to 31.7M, and transferred the same amount to centralized exchanges like Binance and Kraken. Despite this large transaction, the whale still retains a substantial stake in Solana, with 2.9M SOL (184M) remaining staked. SOL holders should be cautious as transfers of such magnitude to exchanges could suggest a strategic reallocation of assets and significant selling pressures ahead.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH fell to 55.21% and 57.81%, respectively.
- The 30-day 25-delta skew (C-P) for BTC and ETH fell to 5.23% and 4.11%, respectively.
- The futures market witnessed $220.14M liquidations in the last 24 hours, with longs representing 76.15% of the total.
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 7-day implied volatility fell from 59.30% to 51.09%, while the 30-day implied volatility has also decreased from 57.77% to 51.86%, suggesting that market participants are anticipating a period of relative stability or decreased uncertainty in the BTC market.
Meanwhile, BTC's term structure has reverted mostly back to contango, characterized by a decline in IV across all maturities. This trend is particularly pronounced in the near-term expiries ranging from 2 to 24 days. The significant reduction in IV aligns temporally with the SEC's decision to postpone the review of existing spot Bitcoin ETF applications, including the recent deferral of Hashdex's ETF conversion request on November 15. This regulatory hesitation appears to be injecting a measure of certainty into the market, tempering short-term volatility expectations as investors recalibrate their positions in response to the delayed ETF approval landscape.
The 25-delta 7-day skew has decreased to 4.51%, which indicates a lessening in the demand for protective put options relative to calls, suggesting traders are becoming more concerned about downside risk in the short term. At the same time, the slight decrease in the 30-day skew to 5.23% could be interpreted as a tempered but persistent concern for medium-term market fluctuations, reflecting a cautious optimism among market participants. This data implies a market that is cautiously adjusting to a more balanced view on near-term risks while maintaining a watchful stance on the horizon.
During @Paradigm’s Asia / Europe Session Hours, in the BTC market, the most significant transactions were a call option bought with a size of 400K on 29-Dec-23 at a 40K strike, and a call calendar bought with a size of 250K, running from 24-Nov-23 at a 37K strike to 8-Dec-23 at a 37K strike. For ETH, notable trades included a call option bought with a size of 3.5M on 24-Nov-23 at a 2.1K strike, and a bull risk reversal bought with a size of 1.625M, structured from 29-Dec-23 at a 1.6K strike to 29-Dec-23 at a 3K strike.
Crypto Technical Analysis
Turning to technical analysis, BTC has sustained heightened volatility in the last 24 hours, experiencing a rapid decline slightly above the previous low within the channel range. Currently, the price seems to have found support at the 100-period SMA on the 4-hour chart, forming a new rising channel with a steeper upward slope. As the price bounces back from yesterday’s drop, BTC is likely to gradually approach the upper boundary of the new channel, encountering a new resistance zone at approximately $38.2K, representing a 5% potential upside. However, there remains a possibility that the bearish momentum from yesterday could persist. In such a case, the price will likely test the lower boundary at $35.7K before moving towards the next support zone at $31.5K.
On the other hand, ETH has undergone similar movements in the last 24 hours, experiencing a notable drop followed by a slight rebound; however, technical indicators present a different perspective. Prior to the price decline, ETH did not reach the local peak at $2.12K but instead declined from a lower high. This renders the price movements in the last week as exhibiting a nearly horizontal triangle pattern. With the price decline yesterday, ETH effectively broke below the triangle’s lower boundary, which also forms a part of the previously identified trendline with local higher lows. Currently, ETH has found support at the previously identified level of $1.93K with a slight pullback. If the bearish momentum continues, the price will likely re-test the $1.93K level before moving towards the next support found at $1.77K. However, if the bulls regain control of the market, ETH is likely to re-test the lower boundary of the triangle at roughly $2.02K before moving further upwards.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳