S&P 500 Futures
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.
In case you have missed it, check out our latest insights piece 👇
Our Daily View
What We Are Covering Today
- Bullish momentum persists into CPI (more in Macro & TradFi)
- FTX recovers $5B worth of liquid assets, including cash and crypto; Ava Labs and AWS partner up to accelerate institutional adoption (more in DeFi & CeFi)
- Dry powder held on-chain close to ATH (more in On-Chain)
- BTC put skew flips into positive territory as bullish flows pile in (more in Crypto Derivatives)
- BTC and ETH spike up over 5% overnight, breaking above Dec’s highs (more in Crypto Technical Analysis)
Macro & TradFi
US & European equities pushed higher while Asia stocks consolidated in yesterday’s trading. CPI is due 930pm SGT tonight, which will likely glue traders worldwide to their screens as last month’s CPI print saw front-running, massively profitable trades on US Treasury futures barely a minute before data release. Tesla is set to build a factory with annual production capacity of 1 million cars in Indonesia, diversifying its supply chain further.
NASDAQ rallied 1.72%, SPX 1.27% and DOW 0.82% overnight as traders rack up bet on lower-than-expected CPI print. US Treasury bonds rebounded as yields tightened alongside risk assets, and a new 10-year treasury auction showed strong appetite from real money on duration; 10-year yield tightened 7bps while 2s10s and 5s30s curves both flattened. European stocks and bonds rallied on a similar scale - UK’s gilt yield tightened as much as 15bps while Germany’s DAX index closed more than 1% higher.
DeFi & CeFi
- FTX recovers $5bn liquid assets, says lawyers
- Ava Labs partners with Amazon Web Services (AWS) to accelerate enterprise and government adoption of blockchain
- S&P further downgrades Coinbase junk bonds to BB-
- Binance.US receives approval to buy Voyager Assets
- Layer 1 blockchain Venom Foundation and Iceberg Capital to launch $1B venture fund
- DEX aggregator expands to Optimism
- Lending protocol MYSO Finance v1 goes live on Ethereum mainnet
- Ondo Finance launches tokenized funds on US Treasuries and Institutional-Grade bonds
- Axie Infinity launches Origins Season 2 with 112,000 $AXS rewards
- pSTAKE to launch $stkATOM in the Interchain on Persistence
During the FTX bankruptcy hearing, FTX lawyers told the court that the exchange has found more than $5B in liquid assets that can be used to repay creditors. FTX advisors have also uncovered large amounts of other illiquid crypto assets. Currently, it is unclear how much money creditors will be able to recover on their loans to FTX.
In other news, Ava Labs, the company behind Layer 1 blockchain Avalanche, will be the first blockchain company to partner with AWS to bring wider adoption of blockchain technology among institutions and governments. As part of the deal, AWS will support Avalanche’s infrastructure and dApps ecosystem, including one-click node deployment via AWS Marketplace. Avalanche nodes will also be able to run on AWS GovCloud for government-related data storage. Ava Labs also plans to add subnet deployment to the AWS Marketplace to allow users to launch custom subnets.
Looking on-chain, the number of addresses holding more than $100K in USDT has continued to increase and is inches away from its previous all-time high. There are now 21,549 addresses with more $100k in USDT, which can be indicative of a high amount of dry powder held by sharks and whales who are waiting for the right moment to deploy capital.
Elsewhere, ETH Amount of Supply Last Active 3y-5y (1d MA) just reached a 13-month low of 12,763,678.717 ETH. Previous 13-month low of 12,763,692.592 ETH was observed on 07 January 2023.
- BTC and ETH funding rate turns negative
- 30-day ATM IV rose for BTC 45.60% and fell slightly for ETH to 54.75% respectively
- 30-day 25d put skew further eased for BTC 0.48% and tightened on ETH to -5.02% respectively
Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram
1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps
2) CEX observed include Binance, Bybit, OKX & DYDX
@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo
For futures, total liquidations spiked to to $243.41M, with the majority coming from shorts at $214.41M.
On the options front, IV has risen across the curve as crypto markets advanced higher. Term structures of both majors have flipped into steep backwardation, with a notable kink on the 13 Jan expiries, likely to be CPI related. The 7-day 25d put skew has flipped into positive territory for BTC, which can indicate more upside anticipation in the near term. As VRP widens and remains relatively high for both BTC & ETH at 27.48% and 25.88%, it is likely that front-end sellers should emerge relatively quickly.
On the flow front, topside flows continued to dominate the tape as bull diagonal spreads and bull call spreads were the most heavily purchased strategies for both BTC and ETH. Continued upside in the near term seems to be the consensus as traders are piling into bullish structures and purchasing short-dated optionality, as Paradigm noted a large purchase of 1080x 12-Jan-23 18000 Calls in yesterday’s flows (@tradeparadigm).
Lastly, the VIX rebounded to 21.08 as major indices continued their upward move.
Crypto Technical Analysis
Onto TA, BTC rallied hard overnight, climbing by around 2.8% to $17.9K. The bullish momentum has been carried over today's Asia trading session as BTC broke above its $18K resistance level. Momentum indicators suggest that short-term momentum still remains intact as we head into CPI tonight. Both the daily and H4 RSI show indications of overbought conditions sitting at 85 and 75 and price correction might be possible. The next BTC price level to watch out for is the $18,550 resistance level.
ETH tells a similar story to BTC as it spikes up to $1,405, rising by 4.1% in the past 24h. It has now broken the $1.4K resistance level. If tonight’s CPI print is favorable, ETH could likely test the $1.5K resistance soon.
Check out your Kapital DAO assets on Harvest!
Kapital DAO engineers institutional-grade gaming asset management products used by guilds and games to rapidly onboard players and manage Web3 gaming assets.
Track. Monitor. Discover. Swap. All with Harvest.
The all-in-one DeFi portfolio management platform for the productive investor.
Treehouse Research 🌳