FTX Resumes Withdrawals Again, Setups Special Credit Facility Agreement With Tron; Slower-Than-Projected CPI Print Spurred Risk Sentiment

11 Nov 2022, Friday

2:30 AM

FTX Resumes Withdrawals Again, Setups Special Credit Facility Agreement With Tron; Slower-Than-Projected CPI Print Spurred Risk Sentiment

BTC

ETH

S&P 500 Futures

$17,507.50

$1,293.75

$3,967.50

(+7.75%)

 (+12.85%)

(+5.42%)

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

  • US stocks rallied as inflation fears ease after rosy CPI data release (more in Macro & TradFi)
  • FTX and Tron setup credit facility to facilitate TRX-related crypto assets withdrawals; Tron rises 300% (more in DeFi & CeFi)
  • Withdrawals have been resumed on FTX; BTC balance on exchanges continues to decline to its 4 year low (On-Chain)
  • IV crashed as CPI gave relief to the crypto bloodbath; VIX fell by more than 3 points (more in Crypto Derivatives)
  • BTC & ETH rally after CPI print (more in Crypto Technical Analysis)

Macro & TradFi

GM! The US stock market roared as CPI data undershoots consensus. YoY CPI came in at 7.7% whereas YoY Core CPI came in at 6.3%, under expectations of 7.9% and 6.5% respectively. Money markets are now pricing in an over 85% chance of a lower 50bps rate hike in December. The tech rally was led by Amazon, which rose over 12% on hopes that consumer spending will increase with easing inflation pressure.

US stocks rallied, with the S&P 500 up 5.54%, its biggest rally since April 2020. The Nasdaq rose by 7.49%, its highest gain since March 2020. The DJIA closed 3.7% higher with an over 1200 points increase. The 10Y yield plunged to 3.81% whereas DXY fell by 1.96%. Lastly, WTI Crude increased by 1.12% to $86.69 a barrel.

DeFi & CeFi

  • Tether begins freezing FTX USDT at the request of Law Enforcement as investigations take place
  • FTX and Tron reached an agreement to set up a credit facility
  • Crypto.com have halted Solana USDC and USDT deposits and withdrawals
  • Conesnsys zkEVM testnet registration opens up
  • Metamask launches its bridge functionality
  • Aptos and Google Cloud reveal partnership for accelerator program

FTX and Tron have reached an agreement to set up a special credit facility arrangement. The capital injection will be used to allow withdrawals of TRX, BTT, JST, SUN, HT tokens to external wallets. This has resulted in a flock to TRX as FTX users try to exit the exchange, causing TRX to gain a significant 300% in the last day.

Elsewhere, there are further partnerships made on Google Cloud this week as the tech giant unveiled its partnership with Aptos. It was revealed that Google Cloud would be a validator for the Aptos chain. Aside from that, the two companies will also set up an accelerator program and co-host a hackathon next year.

On-Chain

BTC Balance on Exchanges just reached a 4-year low of 2,314,554.66 with a recent sharp spike downwards suggesting that users are moving crypto off exchanges during the current conditions.

In other news, on-chain data has confirmed that FTX has resumed withdrawals with the recent $8bn raise from SBF in an attempt to return its users their funds.

Crypto Derivatives

  • Funding rate remains negative on BTC, ETH, and all other crypto assets
  • 30-day IV rose for both BTC and ETH to 90.27% and 124.24%, respectively
  • 30-day 25d put skew tightened for BTC and ETH to -27.68 % and -22.03%, respectively

For futures, total liquidations came in at $343M, with the majority coming from short liquidations at $234M.

On the options front, as mentioned in yesterday’s Treehouse Daily, IV cratered lower as CPI provided relief to the crypto bloodbath that was happening in the past few days. Term structure still remains in steep backwardation as near-term IV remains bid.

Put skew eased slightly after tightening heavily to the downside during the past 24 hours. However, shorter-dated skew tightened further, suggesting that investors remain cautious for the near term.

Flows came in mixed as compared to the significant downside buying earlier this week. Short straddles seem to be coming into the picture as traders short vols, taking advantage of the heightened volatility as we go into the weekend and ahead of DOVs selling. Some put selling was observed, likely to be traders taking profit on their previously opened protections.

Elsewhere, the VIX fell by more than 3% (vol. terms) as lower-than-expected CPI staged a rally in the broader equity markets.

Crypto Technical Analysis

BTC is currently at $17,530 after rebounding by 10.36%. On the daily, BTC tested its level of support at $16,500, before rebounding to the upside. It is now currently testing its level of resistance at $17,567. Should BTC break out of this range, the next level of resistance would be at $18,720.

ETH has also risen, rallying by 17.9% to $1,294.7. On the daily, ETH has rebounded near its level of support at $1,060, and broke out above its range upper bound at $1,249. On the H1, ETH is currently retesting the top of the range and should this level of support hold, the next price level likely to be tested would be at $1,367.7.

Daily Readings

TradFi

Crypto

Yours sincerely,
Treehouse Research 🌳

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