S&P Futures 500
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
- Blinken's Beijing visit signals a potential thaw in US-China relations; Allegations of Western energy protectionism by India's Power Minister (more in Macro & TradFi)
- Binance.US reaches agreement with SEC to continue its operations; Tether faults CoinDesk and calls the timing of its de-peg suspicious (more in DeFi & CeFi)
- The potential turnaround in stablecoin market cap indicates a shift in crypto market sentiment (more in On-Chain)
- Derivatives data indicate bullish sentiment and higher price volatility for Bitcoin (more in Crypto Derivatives)
- Weekly MACD bearish crossover flashes on both BTC and ETH (more in Crypto Technical Analysis)
Macro & TradFi
US Secretary of State Antony Blinken paid a recent visit to Beijing, the first such visit by a US Secretary of State since 2018. This could signify a pivotal moment in US-China relations, which have been tense since the incident involving a suspected Chinese spy balloon over North America. Blinken's meetings with Chinese Foreign Minister Qin Gang, which extended an invitation to Washington, underscore the significance of diplomacy and open channels of communication to mitigate the risks of misperception and miscalculation. Despite enduring disagreements over issues such as Taiwan, the Russia-Ukraine conflict, and technology export controls, there is evidence of a potential easing in relations. However, unanswered questions, including the possibility of President Xi snubbing Blinken and the pending FBI investigation into the balloon incident, continue to loom over the bilateral relationship.
Separately, India's Power Minister Raj Kumar Singh has accused Western countries, specifically the US and Europe, of hypocritical protectionist policies regarding their renewable energy industries. Singh argues these policies, including heavy domestic subsidies like those in the USA's Inflation Reduction Act and Europe's green hydrogen auctions, disadvantage emerging economies like India and inhibit the development of their clean energy sectors. Despite India's ambitious renewable target of 500 gigawatts by 2030, it continues to face a challenging international landscape, intensified by the overshadowing impact of foreign subsidies. In response, Singh declared India's intention to resist any efforts by companies to offshore manufacturing to take advantage of these subsidies and to continue its reliance on coal to meet its growing energy needs. His comments underscore the ongoing tensions between developed and developing nations over the fair and equitable transition to renewable energy and climate finance commitments.
The U.S. stock market displayed some volatility on Friday, with the S&P 500 declining by 0.37%. Both the Nasdaq Composite and the Dow Jones Industrial Average also experienced downturns, decreasing by 0.68% and 0.32% respectively. The DXY exhibited signs of recovery from recent losses and was observed trading within the range of 102.30-40. Early data from the University of Michigan's Consumer Sentiment Index for June indicated certain improvements; however, the easing of U.S. inflation expectations has tempered bullish sentiments towards the dollar.
DeFi & CeFi
- Binance.US reaches agreement with SEC but says that there has not been any evidence on the misuse of customer funds
- StarryNift launches “Citizenship” protocol to mark its 2-year anniversary
- Intuition, a decentralized infrastructure provider, closed a $4M seed round
- Celsius proposes to sell all customers’ altcoins to BTC and ETH
- Tether releases its reserve materials and calls the depeg timing suspicious
- Mark Cuban defends crypto but thinks majority of tokens wil go to zero
Binance.US has reached a Court-ordered agreement with the SEC over the weekend, which moves of all US customer funds back onshore and restricting access to customer funds only to Binance.US employees. The SEC's request for a temporary restraining order and asset freeze was not granted, allowing Binance.US to continue its operations. The SEC claimed that Binance and its CEO, Changpeng Zhao, had control over customer assets and the ability to misuse or divert them, but Binance.US argued that no evidence was presented to support these allegations. The judge's ruling is seen as a significant defeat for the SEC and a cause for celebration for Binance.
In other news, Tether has fulfilled its reporting obligations to the New York Attorney General's Office as part of its settlement, providing quarterly reports on its reserves. Soon after, Tether released the reports to CoinDesk as per their request. The documents include statements from banks confirming the existence of Tether's reserves, although Tether notes that these reports are outdated and that it has since reduced its commercial paper reserves and secured loans portfolio. Tether expressed suspicion on Friday regarding the timing of its stablecoin briefly losing its peg to the US dollar coinciding with the release of the documents. The company expressed concerns about potential manipulation in the market and criticized CoinDesk for past misrepresentations and requested that customer names not be disclosed for their safety.
After a 15-month gradual decline, the combined market capitalization of the top 6 stablecoins has shown signs of a potential turnaround, with the market cap of TUSD rising by $1B over the weekend (@santiment). Expansions in stablecoin supplies typically indicate a growing demand and capital inflows into the crypto space. The increased liquidity fuels demand and contributes to a positive market environment. On the other hand, contractions in stablecoin supplies are generally associated with risk-off environments and net capital outflows from digital assets.
Looking at glassnode data, the crypto space has witnessed significant capital outflows since the start of 2022, aligning with the initiation of rate hikes to combat persistent inflationary pressures. However, the rate of contraction in stablecoin supplies is now slowing down, as evidenced by the Aggregate Supply Net Position Change of stablecoins.
- Funding rates for BTC and ETH have returned to positive territory.
- The 30-day ATM IV for BTC increased to 40.84%, while for ETH it reached 40.68%.
- The Deribit Volatility Index for BTC rose to 45.35%, while for ETH it rose to 45.77%.
- The 30-day 25-delta skew (P-C) for BTC is negatively skewed and decreased to -4.93%, favoring call options, whereas for ETH it increased to 13.77%.
Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram
1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps
2) CEX observed include Binance, Bybit, OKX & DYDX
@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo
Over the weekend, the futures market experienced a total of $152.28M worth of liquidations, with approximately 60.59% attributed to shorts.
The IV for BTC and ETH has increased over the weekend, particularly for longer-dated tenors. According to @paradigm, the IV for Sep 25-delta calls increased to approximately 45% for both BTC and ETH, indicating an increase in risk premiums. Moreover, the IV of BTC surpassed that of ETH in the 7-day timeframe. These shifts in IV may be attributed to the news surrounding the potential U.S. Bitcoin ETF filing by BlackRock, which sparked a bullish sentiment among traders over the weekend.
After the Bitcoin ETF filing news, the skew of BTC options (P-C), has flipped negative. The negative skew for BTC implies that traders are now willing to pay more for calls than puts, indicating that traders have adopted a bullish stance on Bitcoin and anticipate further positive price movement in the upcoming week. Conversely, the positive sentiment did not extend to ETH, as the skew for ETH options remained positive.
The ATM IV for BTC has now surpassed its realized volatility. This suggests that market participants anticipate a higher price volatility for BTC in the coming week. Furthermore, there has been notable interest in Call options. Specifically, @paradigm reported a significant purchase of 1,125x 30 Jun 23 $27K outright Calls, reflecting the bullish sentiment in BTC in the near term. In the case of ETH, trade flows indicate an expectation of increased volatility in the near future. This was exemplified by the purchase of 7,000x 28 Jul 23 $1.7K Straddle.
Lastly, the VIX fell to 13.54%.
Crypto Technical Analysis
Analyzing BTC on the weekly timeframe, the MACD indicator has recently displayed a bearish signal with a downward crossover. This particular event raises concerns as similar crossovers have often been followed by prolonged periods of price decline in BTC, as evidenced by the April 2021 crash, the market peak in Nov 2021, and the Terra LUNA crash in May of last year.
Transitioning to the daily chart, BTC has rebounded from the significant $25K horizontal support level. This support level gains further credibility as it aligns with the 200-day Exponential Moving Average (EMA), which has proven to be a robust dynamic support in the past.
ETH has also experienced a downward MACD crossover on the weekly chart. Turning to the daily chart, ETH has made multiple attempts to break above a descending trendline, but these attempts have been unsuccessful so far. Furthermore, the price has recently broken below the $1.72K level, which has now transformed into a resistance level. It is worth noting that this level exhibited strong breakout potential back in March of this year. If ETH manages to overcome this resistance, it could potentially rally towards its quarterly open at $1.82K. However, should the price fail to breach this level, it indicates a likelihood of further downward movement, potentially revisiting the mid-range of its longer-term range, situated around $1.5K.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
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