Binance Controls 2nd Most Uniswap Votes; 90-Day BTC IV Plunged To 52-Week Low; US Treasury Yields Refreshed Multi Year High

20 Oct 2022, Thursday

3:00 AM

Binance Controls 2nd Most Uniswap Votes; 90-Day BTC IV Plunged To 52-Week Low; US Treasury Yields Refreshed Multi Year High

BTC

ETH

S&P 500 Futures

$18,945.00

$1,275.00

$3,688.75

(-1.45%)

 (-1.87%)

(-2.00%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)

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What We Are Covering Today

  • US Treasury yield shot higher after a day of relief; risk assets fell globally (more in Macro & TradFi)
  • Binance becomes 2nd largest Uniswap DAO vote holder after fresh UNI delegation (more in DeFi & CeFi)
  • BTC miners to exchange flow reaches 1-month high (more in On-Chain)
  • 90-day BTC IV at 52-week low; traders continue to pile onto long volatility structures (more in Crypto Derivatives)
  • BTC and ETH continued its downwards trajectory, trailing its 20 EMA line both on the daily and 4-hourly time frame (more in Crypto Technical Analysis)

Macro & TradFi

GM! US Treasury yields spiked across the curve on Wednesday as fears of a recession and hard Fed monetary policy continued to weigh on investor sentiment. US 10-year Treasury yields stopped just short of 4.15%, its fresh wide since 2008. Concerns of an economic slowdown exacerbated by the Fed's increasingly hawkish stance have been reflected by Fed Fund Futures pricing in a 77% probability of rates being around 4.50%- 4.75% by the end of the year. Elsewhere, US housing starts fell by 8.1%, as single-family homes fell to their lowest level since 2020. US homebuilding numbers have continued their freefall as the housing market tumbles.

US equities ended their winning streak, dropping together with bonds despite earnings outperformance from several companies. The S&P 500 slipped by 0.67%, the NASDAQ plunged by 0.85% and the DJIA fell by 0.33%. The US 10Y yield spiked by 12 bps to 4.13%. Meanwhile, WTI Crude rose by 3.5% to $85.69 a barrel.

DeFi & CeFi

  • DeFi TVL down 1.32% over past 24hours
  • Binance becomes Uniswap DAO's second largest vote holder
  • Aevo, an options exchange developed by Ribbon Finance, is set to welcome its first beta users next week
  • Moola Market hacker returns more than $9m for $500k bounty
  • The Banff Upgrade on Avalanche Mainnet is now live

Binance has delegated 13.2million UNI tokens, becoming Uniswap's second largest vote holder. The amount delegated represents 5.9% of voting power, and will allow Binance to propose governance decisions. It is unclear if Binance would allow its users to engage with Uniswap governance proposals, as Twitter user hayden.eth noted that the delegated tokens "technically belong to its users".

The Banff Upgrade is now live on Avalanche, which gives Subnets the ability to engage in elastic validation. Elastic validation allows anyone to become a subnet validator by just staking tokens on the P-Chain. This gives Subnets more customizability, as builders can now set their own staking parameters and provide a token to reward validators.

On-Chain

For on-chain, the number of exchange withdrawals for USDT (7d MA) just reached a 1-month high of 577.03.

Whereas BTC miners to exchange flow (7d MA) just reached a 1-month high of 6.06 BTC. This indicates that miners may want to convert their BTC into more stable assets instead due to BTC's current downward trend.

Crypto Derivatives

  • Funding rate remains negative for both BTC and ETH perps
  • 30-day IV rose slightly for both BTC and ETH to 54.2% and 68.3%, respectively
  • 30-day 25d put skew tightened for both BTC and ETH to -6.71% and -7.58%, respectively

Total liquidations for futures totaled $52M on Monday, of which $41M were long liquidations.

On the options front, the 90-day IV has reached its 52-week low. Term structure for both BTC and ETH remains in contango. Put skew tightened; in particular, the 25d 7-day skew for BTC went from -0.36% to -5.33%.

On the flow side, traders kept piling onto long volatility strategies to take advantage of the current depressed vol levels. In addition, flow is bidding short risk reversals to bet on skew dipping more negative. Further downside hedging was also seen as bear put spreads were being bought on BTC.

Lastly, looking at gamma exposure (GEX) by strike, both BTC and ETH are exhibiting strong support around its current price level, which happen to coincides with the strikes that has the most positive gamma - which acts as a countervailing force from market makers, keeping prices pinned to its respective strikes.

Crypto Technical Analysis

BTC continues its descent, falling by 1.05% to $19,125 overnight as it trails its 20-day EMA. On the H4, price traded sideways between its 20 EMA line and the $19.2K support level before dipping further to the $19K in today’s Asia session. If price is unable to hold at this level, the next support area to look at will be the $18.5K-$18.8K.

ETH experienced a greater loss, dipping by 1.97% to $1,285 overnight. Similar to BTC, price tested and failed to break above the 20 EMA line on the H4 before approaching bottom of its support zone at $1.27K. If the bearish momentum continues to mount, we could see price testing the next support level at $1.25K.

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Yours sincerely,
Treehouse Research 🌳

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