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
- DeSantis drops out of 2024 presidential race and endorses Trump; Pessimism surrounding Chinese assets extends beyond struggling stocks (More in Macro & TradFi)
- Bloomberg predicts a 70% winning chance for Coinbase against the SEC; Metamask introduces the new staking-as-a-service feature (More in DeFi & CeFi)
- BTC and stablecoins see no major accumulation; notable $SAVM sales impact market dynamics (More in On-Chain)
- BTC term structure steady; options indicate cautious outlook on future price movements (More in Crypto Derivatives)
- BTC faces potential retracement; ETH consolidates with bearish MACD divergence hinting reversal (More in Crypto Techincal Analysis)
Macro & TradFi
On Sunday, Ron DeSantis withdrew from the 2024 U.S. presidential race and gave his support to leading candidate Donald Trump. The Florida governor described Trump as the preferable alternative to President Joe Biden or Nikki Haley, the last remaining rival to Trump in the GOP primaries. Recent surveys by CNN and the University of New Hampshire indicate that DeSantis received only 6% of the Republican vote in the state, while Trump leads with 50%, and Haley, the ex-governor of South Carolina, trails at 39%.
Meanwhile, doubt about Chinese assets is expanding beyond the stock market, as investors anticipate that the yuan and government bonds will fall short of expectations this year, at a time when the Federal Reserve's less aggressive stance is likely to boost emerging markets. The negative outlook on China has grown stronger as recent data verified that the world's second-largest economy is still struggling. This pessimism increases pressure on the People's Bank of China to reduce interest rates. However, investors believe that China's central bank has less scope for rate cuts compared to its major global counterparts, who currently have borrowing rates at multi-year highs. As China becomes less attractive, traders are finding several reasons to be more optimistic about its emerging market peers. Markets with higher yields are expected to benefit more from the anticipated rate cuts by the Fed, while the possible inclusion of South Korea and India in major global bond indexes should further enhance the appeal of their assets.
On Friday, the S&P 500 achieved its first record closing in over two years, as well as setting a new intraday high, after fluctuating within a tight trading range for nearly a month. The large-cap benchmark S&P 500 index SPX finished at 4,839.81 on Friday, increasing by 1.23% and surpassing the prior record close of 4,796.56 set on Jan. 3, 2022. The index also traded as high as 4,842.07, topping its intraday record of 4,818.62 set on Jan. 4, 2022, according to FactSet data. Both the Dow Jones Industrial Average and Nasdaq Composite also increased by 1.05% and 1.70% respectively. Advanced Micro Devices Inc closed last Friday with an increase of 7.11% at $174.23 as AMD’s AI narrative overshadows last year’s misses. Paypal closed last Friday with an increase of 6.01%, currently sitting at $65.82 as the post-holiday debt crunch from the "buy now, pay later" trend has hit, leaving consumers questioning how they will manage their bills.
CeFi & DeFi
- Bloomberg analyst estimates 70% chance of Coinbase winning SEC case
- MetaMask introduces Ethereum validator staking feature
- Bitcoin Instantly Topped Silver in ETF Market and Trails Only Gold Among Commodities
- Manta Network Hit by 'DDoS' Attack Amid Token Issuance
- X launches dedicated payments account
- Nethermind pushes hotfix after new client versions caused invalid blocks
In the lawsuit filed by the SEC against Coinbase accusing the company of selling unregistered securities and operating an unlicensed staking-as-a-service program, the central issue revolves around differentiating securities from collectibles. Coinbase's legal defense argued that not all cryptocurrency purchases constitute investment contracts and likened it to buying collectibles like Beanie Babies. Bloomberg's senior litigation analyst, Elliott Stein, suggests that Coinbase may have the edge in the case. He notes that the judge sought a limiting principle to the SEC's definition of "investment contract" and finds Coinbase's argument more compelling, requiring investment in a business rather than just an ecosystem. However, the judge did not provide an immediate ruling, expressing the need for more time to consider the case. Stein projects that Coinbase has a 70% chance of ultimately winning against the SEC.
Meanwhile, MetaMask has partnered with Consensys Staking to offer Ethereum staking services. Users willing to stake at least 32 ETH (approximately $80,000) can run a validator node through the Consensys Staking service without the need for pooling or specific hardware and software requirements. The staked ETH is used to operate a validator node, and MetaMask promises about a 4% annual yield on rewards, with a 10% fee. The offering provides an alternative to traditional staking providers and allows users to participate in Ethereum's proof-of-stake network after "The Merge" transition from a proof-of-work network in September 2022.
Moving on to on-chain, according to an analysis by Santiment, BTC and stablecoins have not experienced significant accumulation by large wallet holders, a key factor typically required to sustain a rally towards new highs. This lack of active accumulation suggests a potential pause or slowdown in the upward momentum of these digital assets, as substantial buying activity from large investors often signals growing market confidence and can drive further price increases, potentially indicating a cautious outlook for the crypto market in the near term.
In an analysis by Spotonchain, one notable wallet has been actively selling $SAVM tokens, transferring approximately 84.7K $SAVM (valued at around $1.2 million) to 19 distinct new addresses. These addresses have subsequently been converting the $SAVM tokens into $ETH. The funding pattern of these addresses is also notable; most received 0.1 ETH from a single source, wallet 0x53f07e2, suggesting that the same entity likely controls them. This concentrated activity indicates a strategic divestment from $SAVM to $ETH by a significant holder, which could have implications for the liquidity and price volatility of $SAVM in the short term.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH dropped to 47.25% and 45.79%, respectively.
- The 30-day 25-delta skew (C-P) for BTC and ETH remained relatively unchanged at -1.90% and -2.51%, respectively.
- The futures market witnessed $47M liquidations, with longs representing 64.78%.
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.
Following the approval of the BTC ETF after January 11th, the ATM IV for Bitcoin has stabilized, showing a marked lack of volatility after an initial substantial decrease. Currently, the 7-day IV stands at 46.87, and the 30-day IV remains steady at 44.92. This stability in volatility metrics may be attributed to an absence of significant BTC catalysts expected over the next week. This trend suggests a period of market consolidation in the short-term BTC market.
The BTC term structure has largely maintained its status quo from the previous day, with a notable exception being a surge in IV for contracts expiring in four days. Apart from this, the curve largely retains a contango shape, except for contracts expiring in four days. IV for longer-dated contracts remain unchanged, pointing to investor confidence regarding BTC's long-term market stability.
The 25-delta call-put skews for BTC options over 30-day and 7-day periods have remained relatively stable, recorded at -3.16 and -1.90 respectively as Bitcoin option traders continue to exercise caution regarding future price movements.
Lastly, @Paradigm highlighted that option flows for last Friday during Asia/Europe Hours emphasized downside coverage with strategic put purchases and structured positions. Key BTC trades encompassed the procurement of 200x 26-Jan-24 43k Calls, and a complex custom strategy involving the sale of 200x 2-Feb-24 40/48k Put-Call structures. On the ETH front, the significant transactions included the purchase of 3000x 26-Jan-24 2600 Calls and 2500x 2-Feb-24 2300 Puts, showcasing a robust appetite for both downside protection and bullish positions ahead of major market moves.
Crypto Technical Analysis
Moving on to Technical Analysis, BTC is trading at approximately $41.3K on the chart. Notably, there is an anticipation of a potential retracement to the support level of $40.6K, marking a 1.7% decline from the current price. This scenario is further substantiated by the emergence of a bearish divergence, characterized by two rising price highs that are contrastingly mirrored by two falling highs on the Moving Average Convergence Divergence (MACD) indicator. Such a divergence often signals weakening bullish momentum and could pave the way for increased bearish pressure. Should BTC breach the $40.6K support, the next significant support level is identified at $37.9K. A break below this threshold could suggest a continuation of the bearish trend. Conversely, a critical observation is the potential crossover of the MACD line above the signal line. If this crossover occurs, it might indicate a reversal from the current downtrend, providing the impetus for a price ascent towards the resistance level at $44.4K, which equates to a 7.31% increase from the present levels.
ETH is currently trading at approximately $2.44K, showcasing a degree of consolidation as evidenced by the recent sideways movement in price. This consolidation phase has occurred after a sustained uptrend, as highlighted by the ascending trendline that has previously acted as dynamic support for the price action. The MACD indicator, however, presents a bearish divergence with the price chart, where the price has registered higher highs in contrast to lower highs on the MACD. This divergence may signal underlying weakness in the bullish trend and could precede a potential reversal. Should the price breach the trendline support, we could witness a decline toward the next support level at $2.1K, implying a 10.87% decrease from the current price. On the flip side, the resistance to watch is situated at approximately $2.6K. A break below the mentioned support could validate the bearish divergence and intensify selling pressure, potentially leading to further downside toward the established support levels. Conversely, should the MACD line cross above the signal line, it may indicate diminishing bearish momentum, and if accompanied by a price uptrend, could target the resistance level mentioned earlier.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳