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Our Daily View
What We Are Covering Today
- China cuts bank reserves requirements; Google parent company approaches record high (More in Macro & TradFi)
- SEC delays the approval of Blackrock’s ETH ETF; Bitwise publicly shares its BTC holdings address for the ETF (More in DeFi & CeFi)
- Grayscale BTC sell-off; $BLUR top holders unlock and sit on $55M unrealized profit (More in On-Chain)
- BTC's IV stabilizes; option traders exhibit a cautious bearish outlook in the near term (More in Crypto Derivatives)
- BTC continues to rise higher while ETH sees an SMA death cross on the 4-hour chart (More in Crypto Technical Analysis)
Macro & TradFi
China's People's Bank (PBOC) has announced a 0.5% cut in the reserve requirement ratio (RRR) for banks effective February 5, aiming to stimulate the economy and mitigate the stock market downturn. This measure, which is expected to release 1 trillion yuan ($139 billion) into the market, reflects a strategic move to stabilize the economy and counter a significant $6 trillion stock-market decline. Uniquely communicated ahead of schedule by PBOC Governor Pan Gongsheng, the decision signals the government's urgent response to economic challenges and stock market losses. This policy shift aligns with global economic trends, notably the Federal Reserve's move away from rate hikes, and it includes additional measures such as reduced interest rates on re-lending and adjusted borrowing policies for commercial property, emphasizing support for agriculture, small businesses, and property developers. These actions highlight China's focus on managing financial risks, stabilizing the yuan, and balancing credit, pointing to a broader strategy for revitalizing economic growth through a proactive fiscal policy centered on consumption.
Alphabet Inc, the parent company of Google, has witnessed its shares approaching record highs amidst growing enthusiasm for its advancements in artificial intelligence (AI). The company's stock saw a notable intraday peak that surpassed its previous closing high from November 2021, signaling investor confidence in its AI trajectory. This surge has solidified Alphabet's position as the third most valuable company in the United States, with a valuation nearing $1.9 trillion. The escalating interest in AI technologies has propelled the stock rally for major tech giants, and Alphabet has been at the forefront, especially with the recent rollout of its AI model Gemini. This model powers its chatbot Bard and is reported to outperform OpenAI's GPT-4 in specific measures. With analysts from BMO Capital Markets backing Alphabet with an outperform rating and spotlighting it as a top pick for 2024, the tech behemoth's heavy investment in AI seems to be paying off as it quickly integrates AI into its suite of products and services.
The S&P 500 edged up to a new record, marking its fourth consecutive peak, ending the day at 4,868.55, a 0.08% increase. The Dow Jones Industrial Average slipped by 0.26% to close at 37,806.39, while the Nasdaq Composite climbed 0.36% to reach 15,481.92, its highest since January 2022. This rise was buoyed by a surge in Netflix shares, which soared 10.7% after reporting strong subscriber growth, and robust performance from chipmakers, sparked by ASML's positive report suggesting a rebound in global chip demand. Notably, Microsoft's shares hit a record high, propelling its market value beyond the $3 trillion mark, reflecting sustained investor optimism in the tech sector. Investors are now awaiting the European Central Bank’s (ECB) interest rate decision today at 21:15 SGT.
CeFi & DeFi
- SEC delays the proposed Blackrock ETH ETF to March
- Bitwise publicly shares its on-chain wallet address for ETF holdings
- Polygon to launch 'AggLayer' for blockchain interoperability in February
- Synthetix deploys the first perpetual protocol on the Base blockchain
- Bitcoin mining company Hut 8 denies claims in the Jcapital report
The U.S. Securities and Exchange Commission (SEC) has extended the decision timeline for BlackRock's proposed spot Ethereum exchange-traded fund (ETF) to March 10. The SEC stated that it needs more time to consider the proposed rule change and the issues raised. BlackRock filed for its spot Ethereum ETF, known as the iShares Ethereum Trust, in November. The delay follows a similar extension for Fidelity's application for the Fidelity Ethereum Fund. Bloomberg Intelligence ETF analyst James Seyffart expects sporadic delays for spot Ethereum ETF proposals to continue over the next few months, with the next significant date being May 23.
Meanwhile, Bitwise has become the first among the ten spot bitcoin exchange-traded fund (ETF) issuers to publicly share its digital wallet address on the Bitcoin network. The company tweeted a screenshot displaying the Bitwise Bitcoin ETF's (BITB) bitcoin address and holdings (11,858 bitcoin) as of January 23. This move enhances transparency, allowing anyone to verify the fund's holdings and flows directly on the blockchain. Bitwise expressed its commitment to on-chain transparency while industry experts have applauded this move as an important step toward on-chain accounting and a bridge between traditional finance and decentralized finance.
On-chain analysis by @lookonchain shows a significant decrease in BTC holdings by Grayscale, with a reduction of 15,986 BTC amounting to approximately $641 million. This sizable divestment contrasts with the aggregated actions of eight ETFs, which added a total of 10,690 BTC valued at roughly $428.6 million on the same day. Notably, iShares, managed by Blackrock, accounted for the largest share of this addition, amassing an extra 4,079 BTC equivalent to about $163.6 million. This divergence in behavior between Grayscale and the eight ETFs, especially iShares, could indicate different strategic approaches to Bitcoin investment at the start of 2024. While Grayscale's reduction might reflect a rebalancing strategy or a response to investor redemptions, the collective accumulation by the ETFs suggests growing confidence or a strategic expansion of their Bitcoin exposure. If we look at the bigger picture, such contrasting movements can signal varied sentiments in institutional strategies towards Bitcoin. The substantial increase in Bitcoin holdings by iShares might also influence market perception, potentially instilling a bullish outlook among investors, while Grayscale's sizable decrease could be interpreted with caution, potentially impacting market sentiment.
On the other hand, @spotonchain’s analysis for $BLUR showcases a concentrated group of seven top holders who have collectively amassed an unrealized profit of $55 million. Holding 175.7 million $BLUR tokens, these top holders command nearly 5.86% of the total supply, a hefty share that could significantly sway market prices. Despite a broader market downturn, $BLUR has notably increased by 13% over 24 hours, raising questions about the holders' next move—whether they will maintain their positions or liquidate a portion of their holdings, potentially impacting $BLUR's market stability and future pricing. Their actions post-unlocks, in which they seem to have consistently withdrawn tokens, may have helped support or even elevate the token's price. $BLUR holders should pay attention to these wallets for any short-term market implications.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH remained flat at 47.08% and 46.28%, respectively.
- The 30-day 25-delta skew (C-P) for BTC recovered to -1.49% while ETH remained unchanged at -3.76%.
- The futures market witnessed $93.27M liquidations, with longs representing 50.87%.
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.
The IV of BTC has remained stable. Presently, the 7-day IV stands at 43.58%, closely aligned with the 30-day IV, which remains consistent at 46.46%. This period of reduced volatility coincides with Bitwise's recent disclosure of its Bitcoin address, a move that has contributed to increased market certainty.
The term structure of BTC has reverted to a contango shape. This change is notably accompanied by a significant reduction in IV at the front end of the curve, showing a normalization of the market from the recent heightened volatilities.
The 25-delta call-put skews for BTC options indicate a more bearish outlook with the 7-day skew falling to -2.87%. Conversely, the 30-day skew has inclined to -3.16%, signaling a less pronounced bearish sentiment for the medium term. This data suggests that BTC option traders are still exercising caution, reflecting a conservative stance toward future price movements within the next 30 days.
Lastly, @Paradigm highlighted that option flows during Asia/Europe Hours emphasized downside coverage with strategic put purchases and structured positions. Key BTC trades included the acquisition of 250x 26-Jan-24 39500 / 2-Feb-24 43000 Call Calendars and the purchase of 225x 26-Jan-24 41K Calls. Concurrently, ETH options saw significant activity with a notable 2250x 23-Feb-24 2.5K Calls and a large buy of 1500x 26-Jan-24 2300 Calls.
Crypto Technical Analysis
Moving to technical analysis, BTC experienced a gradual increase throughout the day, now stabilizing around $40.1K, with RSI showing a further rise within the normal ranges. This recent upward movement aligns with the formation of another declining channel over the last few days. Currently approaching the upper boundary of this channel, which serves as the immediate resistance at approximately $40.5K, BTC could face the next resistance level at $42K if it successfully breaks above, which represents the previous support-turned-resistance observed earlier this month. However, in the event of bearish market sentiment prevailing, the next crucial support is positioned at $38K, marking the intersection between the channel's lower boundary and the resistance-turned-support since mid-November potentially indicating a near 5% further downside from the current price.
Shifting the focus to ETH, the price appears to have found support around the $2.2K level on the 4-hour chart. RSI has also shown a slight increase, moving out of the oversold territory and currently residing at approximately 33, which is close to oversold territory. Looking ahead, if a confirmed bullish rebound materializes, ETH is likely to encounter strong resistance at $2.39K. This level signifies the intersection of the horizontal resistance zone observed since early December and the trendline formed by the local higher lows. However, bearish indications are emerging from its moving averages, with the 50 SMA forming a death cross below the 100 SMA. In the scenario where the $2.2K support fails to hold, the next support is situated around the $2.11K level, indicating a potential 4% downside.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳