S&P Futures 500
Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)
GM Treehouser 🌳
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Our Daily View
What We Are Covering Today
- Fed meeting minutes reveal that rate-hike slowdown favored by majority of members (more in Macro & TradFi)
- dYdX V4 achieves two of five milestones for its own blockchain network; advanced features and launch of a private testnet with selected validators are duefor next milestone (more in DeFi & CeFi)
- Outflows of BTC from centralized exchanges (CEXes) show continued loss of trust despite proof of reserves (more in On-Chain)
- IV continues to crater in the absence of new major headlines; $2.4B in option notional set to expire on 25th November (more in Crypto Derivatives)
- BTC and ETH currently facing short-term resistance after strong rebound from Tuesday (more in Crypto Technical Analysis)
Macro & TradFi
GM! Fed meeting minutes were released last night, showing indication of growing favor among members to end large hikes soon amidst signs of a slowing economy. Indications in the minutes show that a rate hike slowdown could be as early as December or January. Weekly jobless claims were released yesterday, increasing to a 3-month high of 240K vs a 225K consensus. Elsewhere, discussions continue among G7 nations over price caps on Russian oil. G7 is looking at a price cap in the range of $65-70 bbl. On the Ukrainian front, Kyiv was hit by another missile strike killing 6 people yesterday. The Russian missiles knocked out electricity in the region, causing blackouts across the country.
Looking at US equity markets, the Dow Jones gained 0.28%, the S&P 500 was up 0.6% and NASDAQ rose 1% amidst the Fed meeting minutes release. Oil slid over 3% due to price cap talks, Brent futures fell 3.3% to $85.41. Finally, risk-on sentiment has sent the dollar to slide by 1%. Treasury yields are also down, the 10Y down 5.8bps coming back down to 3.7%.
DeFi & CeFi
- DeFi TVL is up +3.58% in the past 24 hours
- Singapore-based lending platform Hodlnaut under police probe, suspected of fraud and cheating
- Crypto custodian Aegis Trust offers insurance for NFT
- OKEX publishes its Proof of Reserves
- LayerZero-based cross bridge Stargate launches $MAI pools
- Composable Finance’s Kusama parachain, Picasso, is set to go live tomorrow
- Avalanche-based DEX Trader Joe integrates with cross-chain DEX aggregator THORSwap
- Curve Finance launch on Celo
- dYdX provides progress updates of dYdX chain
dYdX announced the completion of their second of five milestones. The milestone includes all basic functionality such as trading fees, liquidation, oracles price updates, static funding rates, token transfer, indexing and API services. dYdX V4 currently has two internal blockchain networks running in perpetuity, where one serves as a developer sandbox, the other as a general testnet. They are currently in the middle of completing Milestone 3 which includes advanced features and the launch of an external testnet with a small group of validators. Milestones 4 and 5 will be focused on non-core products and also include the launch of a fully-public testnet and mainnet respectively.
For on-chain, BTC balance on exchanges just reached a 4-year low of 2,304,055 BTC. In addition, exchange net flow for BTC (1d MA) just reached a 1-month low of -$30,596,214, indicating that BTC investors increasingly prefer to have self-custody. This shows that trust in CEXes continues to waver even as most CEXes have committed to showing proof of reserves.
- Funding rate remains negative on BTC and ETH
- 30-day IV fell for both BTC and ETH to 65.87% and 84.00%, respectively
- 30-day 25d put skew eased for both BTC and ETH to -15.83% and -16.39%, respectively
For futures, total liquidations came in at $92M, with the majority coming from short liquidations at $54M.
On the options front, IV on both BTC and ETH continues to fall as spot recovers in the absence of new major headlines. The 7-day IV continues to outperform 7-day RV as spot has been stable for the last couple of days. Term structure remains in contango, while put skew eases.
On the flow side, bottom fishing was seen on both BTC and ETH block orders as large clips of calls were bought while puts were sold outright. Meanwhile, on-screen orders saw slightly mixed flows as bear diagonal spreads and short put ratio were the top structures traded. Lastly, over $2.4B in option notional is set to expire on 25th November.
Crypto Technical Analysis
BTC closed 2.51% higher at $16,603 as the rebound from $15,757 on Tuesday continues. On the H4, BTC has been facing some resistance, testing the $16.5-$16.6K zone multiple times yesterday. In the short term, should BTC be able to break out of the key zone, we should see it retest the next resistance area at $16,800.
Meanwhile, ETH closed 3.95% higher at $1183.20. Similar to BTC, the rebound from its $1097 support level on Tuesday remained strong and pushed through yesterday. On the H4, ETH currently faces resistance at the $1184 level, as seen from the candle wick upon touching the level yesterday. A close above the $1184 level would warrant a likely move up to the next short-term resistance level of $1220.
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