🌳 Higher CPI Data Pushes Rate Cut Expectations To September; Uniswap Receives Enforcement Notice From SEC

11 Apr 2024, Thursday

2:40 AM

🌳 Higher CPI Data Pushes Rate Cut Expectations To September; Uniswap Receives Enforcement Notice From SEC



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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What We Are Covering Today

  • CPI surges 3.5%, higher than expectations; Goldman Sachs raises outlook for the Chinese economy due to accelerated factory activities (More in Macro & TradFi)
  • SEC prepares to sue Uniswap; Over 62% of SushiSwap voters endorse centralized management (More in DeFi & CeFi)
  • Spot ETFs boost Bitcoin liquidity; Whale's strategic trades highlight market acumen (More in On-Chain)
  • 30-day 25-delta skew (C-P) for both BTC and ETH witness falls; BTC ATM IVs on a steady decline (More in Crypto Derivatives)
  • BTC tests key resistance in a triangle; ETH retraces after a failed bullish breakout (More in Crypto Technical Analysis)

Macro & TradFi

In March, the consumer price index (CPI) surged 3.5% compared to a year earlier, surpassing expectations and marking an acceleration in inflation. The core CPI, which excludes volatile food and energy prices, also rose by 0.4% every month and climbed 3.8% year over year, exceeding estimates. The increase was primarily driven by higher shelter and energy costs, with energy prices rising by 1.1% and shelter costs increasing by 0.4% for the month. This unexpected inflationary pressure has rattled markets and dampened hopes for imminent interest rate cuts by the Federal Reserve. Traders now anticipate the first rate cut to occur in September, as opposed to the previously expected timeline of June, according to CME Group calculations. Despite the Fed's expectation for services inflation to ease, recent data suggests persistent upward pressure, posing challenges for monetary policymakers in managing inflation expectations. The release of minutes from the Fed's March meeting later in the day will provide further insights into officials' views on monetary policy, amid increasing skepticism about the need for rate cuts among some Fed officials.

In other news, Goldman Sachs Group Inc. has upgraded its outlook for China's economic growth in 2024, anticipating a stronger expansion driven by accelerated factory activity. According to Goldman economists, China's economy likely grew at an annualized pace of 7.5% in the first quarter, surpassing their previous estimate of 5.6%. As a result, the bank now forecasts a 5% growth rate for 2024, aligning with Chinese policymakers' target and higher than the previous projection of 4.8%. The Caixin manufacturing PMI and official government data both signal continued expansion, while exports have surged amid growing global demand for technology goods. Goldman's analysts highlight robust tourism spending and inventory growth in the first quarter as additional factors contributing to the improved growth outlook. Compared to the Bloomberg survey of economists, Goldman's 2024 growth estimate of 5% stands higher than the average forecast of 4.6%.

Lastly, US stocks experienced a downturn following the CPI increase. The Dow Jones Industrial Average dropped around 1.1%, the S&P 500 fell nearly 1%, and the Nasdaq Composite lost almost 0.9%. Bond yields surged, with the 10-year Treasury yield reaching nearly 4.57%, its highest level since November. Additionally, minutes from the Federal Reserve's latest policy meeting revealed that "almost all" officials believed it would be appropriate to lower interest rates "at some point." Crude oil futures reversed losses following reports of a potential strike by Iran or its proxies against Israeli targets, with West Texas Intermediate rising over 1% above $86 per barrel, and Brent hovering above $90 per barrel. Investors will be looking out for the US PPI data data due tonight at 20:30 SGT. Additionally, Q1 earnings season will kick off with results from banks including JPMorgan and Citigroup due on Friday.

CeFi & DeFi

  • SEC aiming to pursue legal actions on Uniswap
  • SushiSwap changes governance mode
  • Ethena announces CEXes wallet integration
  • NEAR to hire AI engineers as a part of their AI roadmap
  • Breven Howard returns 34.5% in Q1
  • Sentencing of FTX executive Ryan Salame moved to May 28th

The SEC is gearing up to pursue legal actions against Uniswap, highlighting its aggressive stance towards the rapidly expanding DeFi sector. Through a Wells Notice, the regulatory body is moving past its investigations into a formal legal challenge against the platform, which stands at the forefront of the DeFi movement. This action is part of the SEC's wider crackdown on the cryptocurrency industry, focusing on allegations of regulatory violations such as offering unregistered securities. The case against Uniswap, which recently reported over $2 trillion in transactions, underscores the escalating tension between the crypto sector and regulatory authorities, emphasizing the significant implications for the future of decentralized finance.

Meanwhile, in a significant move towards restructuring, over 62% of SushiSwap's community has shown preliminary support for transitioning to a "Labs model," indicating a shift towards a less decentralized governance structure. This decision came after a signal vote on April 10, reflecting the community's interest in establishing Sushi Labs, a separate entity tasked with the administrative, technical, and operational management of the Sushi ecosystem. Despite facing criticism and concerns over financial stability and voting integrity within the community, the proposal suggests granting Sushi Labs 25 million SUSHI tokens, valued at nearly $39 million. This transition aims to streamline operations and regain lost market share, amidst SushiSwap's declining revenue despite the current bullish market trend. The final decision will be made through an implementation vote scheduled for April 17.


According to Glassnode, since the launch of US Spot ETFs in early January 2024, Bitcoin markets have experienced a significant increase in spot trade volume, reaching a daily peak of approximately $14.1B as the market hit an all-time high of $73K in mid-March. This activity level mirrors the peak trading volumes seen during the 2020-2021 bull market. However, recent weeks have seen a cooling, with daily volumes averaging around $7B. This trend underscores the pivotal role of financial instruments like spot ETFs in enhancing market liquidity and investor participation, even as it hints at the market's cyclical nature and potential shifts in investor sentiment.

Elsewhere, lookonchain's recent analysis reveals a strategic move by a whale, who deposited substantial amounts of four major tokens—182.4 billion PEPE, 351,520 CAKE, 1.88 million MANA, and 1.83 million SAND, valued at approximately $5.75M in total—to Binance for potential profit-taking activities. This transaction, underscores the whale's exceptional market timing skills and successful trading strategy across eight different tokens, culminating in a profit of around $5.4M. The whale's ability to consistently profit from each token traded suggests his acumen in navigating the volatile crypto market and also positions him as a potential benchmark for other investors seeking optimal market entry points.

Crypto Derivatives

  • Funding rates remain positive for both BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained flat around 71.90% and 73.87%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH decreased to 1.50% and -1.45% respectively.
  • The futures market witnessed $255.35M in liquidations, with shorts representing 60.1%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On














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.

The 7-day and 30-day implied volatility (IV) for BTC has witnessed an upward trend, reflecting an increased anticipation of price movement in the market. This elevated short-term IV coincides with the recent CPI data release, which may have stoked concerns about persistent inflation and the Federal Reserve's potential response, thereby impacting BTC prices. Meanwhile, the more pronounced IV in the 30-day period could be influenced by a combination of factors including market reactions to inflation trends, the anticipation of the Federal Reserve's rate decisions, and ongoing discussions around the impact of the BTC halving event, each adding layers of expectation to the market's volatility forecast.

Today's term structure for BTC remains in a steady contango, indicating market expectations of greater volatility or uncertainty in the future.

The BTC 25-delta skew chart presents a notable positive skew in the 7-day implied volatility (IV), signaling a bullish sentiment in the short-term options market. This optimism could be linked to the recent macroeconomic indicators mentioned previously.

Lastly, @Paradigm has spotlighted option flows, marking significant activity in downside protections and structured positions. For BTC, the major transactions included the purchase of 200x 31-May-24 62K Puts and 200x 31-May-24 64K Puts. Additionally, ETH transactions involved the acquisition of custom structures: 12750x 26-Apr-24 3600/2500/3000 Put Custom and 10250x 26-Apr-24 3500/2400/2900 Put Custom.

Crypto Technical Analysis

Moving on to technical analysis for BTC, the price showed notable volatility within the structure of an ascending triangle, indicating a consolidation phase with the potential for a bullish breakout. Currently, the price is oscillating around the $70K mark, repeatedly testing the resistance level of the triangle pattern. This recent price behavior comes after a swift descent to $67K followed by an immediate rally, reinforcing the $70K level as a significant zone of contention for market participants. Should the price decisively breach this resistance, the next level to watch would be the resistance at approximately $72.5K, marking a potential 3.57% increase from the current price. Conversely, the support level of the triangle sits near $67K.

Moving on to ETH, a false breakout above the $3.71K resistance level has culminated in a retracement to the current level of $3.5K. ETH’s activity suggests a failed attempt by bulls to sustain higher price levels, consequently returning to the more established trading range. The rapid descent from the fakeout point signifies a sharp shift in market sentiment from optimism to caution. At this juncture, immediate support is observed at the $3.4K level, while a revisit of the resistance at $3.71K would require a significant upward move of approximately 6%. Like BTC, the ETH RSI leans towards a neutral momentum, which suggests that the market is in balance. However, the recent price action warrants attention to potential shifts that may signal the market's next direction.

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