BTC | ETH | S&P 500 Futures |
$16,533.50 | $1,239.00 | $3,972.00 |
(+1.89%) | (+2.95%) | (-0.42%) |
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
- Fed Vice Chair Brainard feels that the pace of rate hike can slow soon though “additional work” needs to be done to tame inflation; US stocks and bonds retreated from last week’s rally (more in Macro & TradFi)
- CZ announces an industry recovery fund (more in DeFi & CeFi)
- Small BTC holders see large outflows from exchanges while holders continue to see losses (On-Chain)
- IV fall while put skew eased; last 24 hours saw signs of bottom fishing as a flurry of long calls and short puts hit the tape (more in Crypto Derivatives)
- BTC trades in a range between 17.7k and 16k levels as bearish price action likely to remain (more in Crypto Technical Analysis)
Macro & TradFi
GM! US stocks endured a choppy session, finishing lower after last week’s massive rally. Fed Vice Chair Lael Brainard briefly buoyed sentiment after she felt that the Fed could start to slow down its pace of interest rate hikes soon due to the recent inflation data. However, like Fed Governor Waller, she emphasized that the central bank still has “additional work to do” to rein in inflation. During the G20 Summit, Joe Biden and Xi Jinping engaged in a three-hour meeting as they looked to resolve strained US-China ties. A slew of Chinese economic data is set to be released, which includes medium-term lending facility rate.
US stocks fell, with the S&P500 down 0.9%, the Nasdaq shedding 1.1% and the Dow Jones Industrial Average dipping 0.6%. The 10Y treasury yield rose from 3.83% to 3.87%. Lastly, WTI crude fell by 0.6% to $85.4 a barrel.
DeFi & CeFi
- Binance reopens FTT deposits
- CZ announces the creation of an industry recovery fund
- Solend turns off liquidity mining rewards
- Raydium turns off liquidity sharing with Serum
- OKX delists Serum perpetual
- Royal Bahamas Police Force releases statement regarding the investigation of FTX
The CEO of Binance, CZ, announces that an industry recovery fund will materialize to prevent further contagion from the FTX debacle. He states that the fund will be used to help fundamentally sound projects suffering from liquidity problems. Binance Labs will manage the fund as CZ says that projects should contact them for further details. CZ also invites other willing parties to co-invest in the fund. Justin Sun, founder of Tron, has shown interest in providing capital.
On-Chain
Looking at on-chain, small bitcoin holders (less than $10K value) have seen record-high outflows from exchanges amid contagion risks in the space. Elsewhere, BTC exchange balance reached 4-year lows as many continue to withdraw their assets into self-custody. In normal times, withdrawals of BTC from exchanges reflect bullish sentiment. However, relative unrealized losses have reached 3-year highs, beating the high seen in July as prices continue to take a hit.
Crypto Derivatives
- Funding rate remains negative on BTC and ETH
- 0-day IV fell for both BTC and ETH to 78.66% and 101.35%, respectively
- 30-day 25d put skew eased for BTC and ETH to -19.56% and -24.92%, respectively
For futures, total liquidations came in at $154M, with the majority from long liquidations at $89M.
On the options front, IV fell and put-skew eased as markets rallied upon CZ’s announcement. It seems the market is lowering the probability or the magnitude of further contagion, relieving some of the uncertainty moving forward. Term structure remains heavily in backwardation, however, longer-dated vols fell while near-dated vols remained bid.
On the flow side, the past 24 hours saw signs of bottom fishing as calls were mostly bought. It is also likely that amongst the flurry of buy call orders, some contain the unwinding of short call positions placed ahead of the meltdown. In addition, there were also massive sizes of short puts. Other than outright expressing bullish views, it could be that some of these trades are delta-hedged short puts to take advantage of the currently high IV and put skew, as well as profit takings on prior open positions.
Lastly, the VIX rose to 23, adding close to a percentage point, after falling over the last few weeks since its high of 33 in early October.
Crypto Technical Analysis
BTC is currently at $16,600 and has moved up by 1.75%. BTC is currently trading between 16k and 17.7k as seen on the H4 after it had rejected the support aggressively during the Asian session yesterday. While this bullish pressure indicates a support level being formed here, price is still under its 50-period EMA on its daily and H4 timeframes. Price is under its major 18.5k support and a continuation downwards is likely, especially if we are able to break below the 16k support.
ETH is currently trading at $1,242 and is up by 1.85%. ETH remains at its $1.25k support level on the daily. However, its H4 charts suggest that this support area has been broken. As new lows have been formed since the middle of October, it is likely that ETH will continue down to its 1k support region if it is unable to clear its previous highs here.
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Daily Readings
TradFi
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Euro zone wages finally rising but inflation expectations muted, ECB VP says
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Fed boosts focus on liquidity, other risks as economy weakens: Barr
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U.S. expects G20 to condemn Russia's war in Ukraine - U.S. official
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Australia central bank stuck with smaller hike as wary of falling house prices
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IMF says global economic outlook getting 'gloomier', risks abound
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Biden sees no need for 'a new Cold War' with China after meeting with Xi.
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Germany is open to trade with China — but we're not stupid, vice chancellor says.
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Fed Vice Chair Brainard says it may 'soon' be appropriate to move to slower pace of rate hikes.
Crypto
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FTX Hacker Panicked, Still Holds $339M in Ether, Cryptos: Arkham Intelligence.
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Sam Bankman-Fried’s Unceremonious Exit Leaves ‘Alameda Gap’ in Crypto Markets.
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Crypto Industry Participants Field Questions from UK Lawmakers After FTX Collapse.
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Crypto Lender BlockFi Updates Users on Platform, FTX Exposure.
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Digital Asset Manager Valkyrie Lays Off 30% of Staff: Bloomberg.
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Binance Users Withdrew $1.35B of Bitcoin in Days Following FTX Collapse.
Deal Flow
Yours sincerely,
Treehouse Research 🌳
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