BTC | ETH | S&P Futures 500 |
$16,173.25 | $1,166.50 | $3,973.50 |
(-1.71%) | (-2.45%) | (-0.98%) |
Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8) | ||
GM Treehouser 🌳
Welcome to our Treehouse Daily newsletter (previously known as The Canopy Collective), where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.
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Our Daily View
What We Are Covering Today
- Risk assets tumbled across the board; Fed hawkish comments and street demonstrations in China hurt sentiment (more in Macro & TradFi)
- BlockFi files for bankruptcy, assets and liabilities are estimated to be $1-$10 billion with more than 100,000 creditors (more in DeFi & CeFi)
- BTC Hash Ribbon initiates bearish crossover as miners move BTC to exchanges (more in On-Chain)
- Options market unfazed by the BlockFi news; VIX jumps to 22.21 (more in Crypto Derivatives)
- BTC and ETH consolidate within previous tight liquidity zones after correcting in the Asian hours yesterday (more in Crypto Technical Analysis)
Macro & TradFi
Global stocks and bonds tumbled on hawkish Fed comments, China's anti-COVID protests and the recession fears that accompanied them. More reiteration on rate hikes from Fed officials ahead of this Friday’s NFP had pushed risk sentiments lower, while persistent demonstration efforts despite police stronghand in China didn’t help the world's economic outlook either. USDCNH remained under pressure despite recovering some of the early morning selloff yesterday.
US indices started the week in red across the board; DOW sold off 1.46%, S&P 1.48% and NASDAQ 1.37%. Apple stock sold off more than 2.5% as production delays could intensify as key suppliers in China grapple with strikes. US Treasury bonds reversed the initial rally intraday, which saw the 10-year benchmark yield diving ~7bps before closing around flat for the day and now trading ~2bps higher at 3.7% at the time of writing. Oil prices crashed intraday but managed to close back around flat; WTI trades around $76.
DeFi & CeFi
- BlockFi officially files for Chapter 11 Bankruptcy, estimated assets and liabilities ranging from $1-$10 billion
- Cross-chain bridge Across launches its native token, airdrop available to claim here
- About 120,000 BTC transferred from Binance as part of proof-of-reserve audit
- Abracadabra published an “Emergency Proposal” to Sushi’s governance forum as faulty oracle places $10M at risk
- Aave decommissions low liquidity asset pools to protect against attacks
- Euler Finance releases new proposal to move WBTC to WBTC Chainlink oracle
Centralized crypto lender BlockFi, along with eight of its affiliates, commence voluntary cases under Chapter 11 of the US Bankruptcy code. The firm will focus on recovering all obligations owed to BlockFi by its counterparties, including FTX. It is estimated that they have more than 100,000 creditors. Currently, BlockFi has $257 million in cash, with estimated assets and liabilities ranging from $1 billion to $10 billion.
Lending and borrowing protocol Abracadabra calls for Sushiswap's assistance with an “Emergency Proposal” published on Sushi’s governance forum. In the proposal, Abracadabra asked the Sushi team to increase interest rates for two Bento vault “cauldrons” holding $10M worth of cvxRenCrv and yvcrvstETH tokens. A faulty oracle poses a threat to open positions on yvcrvstETH cauldrons while the deprecation of Ren Bridge v1 has rendered cvxRenCrv obsolete.
On-Chain
For on-chain, the BTC hash ribbon has initiated a bearish crossover. The 30D MA (green) has just crossed below the 60D MA (blue), which is historically a leading indicator of miners capitulation as falling hash rate could indicate rising mining costs relative to profits.
BTC miner-to-exchange flows have also been increasing significantly in the past few weeks, which might be indicative of miners positioning themselves to sell their BTC.
The miner net position change has been reflecting this, as it is heavily negative from BTC miner selling as the effects of a liquidity crunch coupled with a steeply declining hashrate puts pressure on miners.
Crypto Derivatives
- Funding rate remains positive on both BTC and ETH perps
- 30-day IV fell for both BTC and ETH to 60.90% and 80.78%, respectively
- 30-day 25d put skew eased for both BTC and ETH to -12.08% and -14.52%, respectively
For futures, total liquidations came in at $91M, with the majority coming from longs at $62M.
On the options front, near-dated IV jumped following BlockFi's bankruptcy announcement, but only by a few percentage points, while longer-dated IV remained unfazed, trading sideways. The term structure is still in contango, largely unchanged. Put skew appears to have tightened slightly. The options market's apathetic reaction to the BlockFi news appears to indicate that markets had already expected it.
On the flow side, BTC saw more bearish structures such as short risk reversals and bear call spreads. Meanwhile, ETH maintained its topside flow momentum, with long risk reversals and bull call spreads leading the way. Furthermore, there was significant volume on long-dated calls with strikes struck at 3K/3.5K expiring in March 2023, which was most likely the call spread that was purchased.
Lastly, the VIX rose to 22.21 from 20.50 as markets fell on the first day after the Thanksgiving holiday.
Crypto Technical Analysis
BTC closed 1.3% lower at $16,210, wicking down to $16K intraday. On the H4, price is currently consolidating within the $16,140 to $16,220 liquidity zone. As seen previously on 23 November, a breakout of this zone should lead us up to the $16,550 zone which BTC rejected off yesterday. However, a break below the current levels would likely lead to a retest of the $15,750 support.
For ETH, it has closed 2.14% lower at $1167.60. On the H4, we can see that ETH is currently consolidating within the $1165-$1172 zone. The $1151 support held strongly yesterday after ETH rejected it but ultimately failed to break above the $1184 resistance. A break above the $1184 level would likely mean a retest of $1220, as seen over the weekend.
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Daily Readings
TradFi
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Singapore state investor Temasek to open Paris office in 2023
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Investors hope Beijing will lift COVID curbs faster as protests rattle markets
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Credit Suisse bonds, stock fall as bank turnaround worries investors
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Credit default ratio in Brazil hits highest in almost 4 years
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Wall Street ends down sharply, hit by Apple and China worries
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Global oil market signals short-term weakness ahead of EU ban on Russian oil
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Stock futures are flat after major averages slide on Covid unrest in China.
Crypto
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Crypto Bank Silvergate Says Its BlockFi Digital Asset Deposit Exposure Totals Less Than $20M.
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Aave Supporters Say Lending Freeze Will Help Transition the Network.
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Israel’s Ministry of Finance Proposes New Guidelines for Regulating Digital Assets.
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DeFi Giant MakerDAO Voting on Hiking DAI Stablecoin Rewards.
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Singapore Banks' Exposure to Bitcoin 'Insignificant' but Subject to Highest Risk Weight.
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TIME President Keith Grossman Joins Crypto Payments Startup MoonPay.
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JPMorgan: Push to Regulate Crypto to Accelerate After FTX’s Collapse.
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Social-Media Giant LINE Closes Its Crypto Exchange Bitfront.
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Compound Finance to impose lending caps in light of failed Aave exploit.
Deal Flow
Yours sincerely,
Treehouse Research 🌳
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