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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
- Homes sales in the US continue to fall; BOJ continues easy monetary policy despite inflation reaching 40-year high (more in Macro & TradFi)
- FTX hacker dumps 50,000 ETH for renBTC before bridging the crypto asset to BTC network (more in DeFi & CeFi)
- Number of exchange deposits for BTC reaches a 2-year low as trust in centralized exchanges (CEXes) wavers (more in On-Chain)
- IV rips higher while put skew tightens; Large discrepancy seen across exchanges on BTC futures (more in Crypto Derivatives)
- BTC and ETH plummeted over the weekend; Key support levels breached (more in Crypto Technical Analysis)
Macro & TradFi
GM! US existing home sales fell 5.9% in October, marking the 9th straight month of declines. As 30-year fixed mortgage rates hit a 20-year high and housing prices remain high, affordability has become even more out of reach for new home buyers. Elsewhere, Japan's central bank continues to stick to its easy monetary policy despite red-hot inflation. Japan’s CPI came in at 3.6% vs a 3.5% consensus and exceeded the previous month’s 3.0%.
Stock market futures were mixed this morning with Dow Jones and the S&P500 down 0.1% while the NASDAQ was up 0.1%. Markets are pricing in Fed minutes this week which is set to be released on Thanksgiving. Elsewhere, other things to look forward to would be PMI services data and new home sales. Elsewhere, the dollar has regained ground slightly with bond yields up in anticipation of the Fed minutes.
Economic Calendar for the Week:
- Monday - China loan prime rate, US Chicago Fed national activity index
- Tuesday - US Richmond Fed manufacturing index, Fed Loretta Mester and James Bullard speak
- Wednesday - RBNZ interest rate decision, German manufacturing PMI, GBP manufacturing PMI, US core durable goods, US initial jobless claims, new home sales, crude oil Inventories
- Thursday - US Fed meeting minutes
DeFi & CeFi
- FTX account drainer moves funds to other wallets while converting ETH to renBTC
- Tiger Global aims to raise $6bn for a new venture fund after FTX investment
- Abracadabra announced emission reduction on Arbitrum
- Convex Finance goes live on Arbitrum
- Sui Testnet Wave 1 live for selected validators and full nodes
- Cardano plans to launch a new privacy blockchain and token
Yesterday at 7:27 am UTC, FTX hacker transferred over 5,000 ETH to a new wallet. It has since moved an additional 50,000 ETH to the same wallet in different transactions. The exploiter proceeded to swap 55,000 ETH for 3,517 renBTC through 1inch before bridging it to BTC network via Ren bridge.
There remain more than 200K ETH holdings in the hacker wallet.
Abracadabra announced an update on its emission reduction for the upcoming week where it plans to deprecate SPELL-ETH and MIM-ETH emissions on Arbitrum. In addition, it also plans to cut 20% in rewards for the MIM-3pool bribes.
For on-chain, the number of exchange deposits for BTC (7d MA) just reached a 2-year low of 1,843 as faith in CEXes remains thin.
Meanwhile, the number of addresses holding 1+ BTC just reached an ATH of 945,169. This indicates that some investors are still confident in accumulating BTC, outside of CEX, despite the bearish momentum.
- Funding rate remains negative on BTC and ETH
- 30-day IV rose for both BTC and ETH to 70.82% and 94.26%, respectively
- 30-day 25d put skew eased for both BTC and ETH to -21.46% and -27.73%, respectively
For futures, total liquidations came in at $185M, with the majority coming from long liquidations at $136M. The term structure of the 30 March 2023 BTC futures is currently showing a large disparity across exchanges. The same tenor BTC futures contract is currently trading at $16.2K on Binance while at $15.8K on Kraken. Given the recent situation involving CEXs, this is most likely a proxy for counterparty risk.
On the options front, IV on both BTC and ETH expanded after the FTX hacker was seen dumping ETH on exchanges on Sunday, which is typically characterized by illiquidity and low volume. The front-end of the term structure on both BTC and ETH jumped higher, now in backwardation in the near-term while flat across the curve from medium to longer-term tenors. Put skew accompanied the sell-off, with both BTC and ETH dipping lower.
On the flow front, heavy short-term put buying on BTC dominated the tape, with strikes placed at $16K and $16.5K. Surprisingly, there has also been an influx in long synthetics on BTC, with over $7M in premium traded in the last two days. Bottom fishing on ETH resurfaced as a large volume of near-term calls expiring 30 December were purchased on the $1.4K and $1.5K strikes, implying a bet on a rally into EOY.
Crypto Technical Analysis
Looking at TA, BTC attempted a breakout of the $17K support on Friday morning but retraced lower, trading rangebound between $16.7K and $16.0K over the weekend. The pullback appears to have eased at the $16.2K support level. The H1 stochastic is indicating that the downtrend may continue, with the $15.8K level as the next key support to watch.
ETH fell below 1.2K and was rejected off a support level at $1.18K before retracing lower on Monday morning. On the H1, we can see three red massive candles that occurred around the time when the FTX hacker dumped over 50K ETH for renBTC on DEX aggregators. The hacker still has over 200K ETH to dump, and the next key support level to watch is $1.07K if the sell-off continues. On the daily, ETH has maintained its bearish structure since the start of the FTX debacle.
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