HUSD Plummets to A Low Of $0.28 After Delist Announcement; Eurozone Inflation Soared to New Record High

01 Nov 2022, Tuesday

2:57 AM

BTC	ETH	S&P 500 Futures
$20,457.00	$1,570.75	$3,892.50
(-0.49%)	(-0.90%)	(-0.22%)
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

Eurozone inflation accelerated to 10.7% in October; The Dow posted its best month since 1976 (more in Macro & TradFi)
DAO credit marketplace Porter Finance rebrands to Arbor Finance; HUSD plummets to a low of $0.28 (more in DeFi & CeFi)
Short-term SOPR turned bullish signaling a potential short term rally in the current market climate (more in On-Chain)
IV spread diverged between BTC and ETH as BTC vols dipped while ETH vols continued higher (more in Crypto Derivatives)
BTC and ETH are short-term range bound (more in Crypto Technical Analysis)

Macro & TradFi

GM! All eyes will be on the upcoming two-day FOMC meeting, which is expected to result in a decision to raise rates by 75 basis points. Markets are in anticipation for indication of the Fed’s future plans and will be watching Jerome Powell for language that suggests slowing rate hikes in December. CME Fed Funds Futures are currently pricing in a 46% chance of a 50bps hike, down from 75bps for the December FOMC. Other global central banks are also slowing their tightening cycle, with the Bank of England shifting to a half-point hike last week. Elsewhere, Eurozone inflation blew past expectations coming in red hot at 10.7% YoY vs 10.2% forecast and up from 9.9% a month earlier.

US equities ended the day lower, but despite yesterday’s dip, the Dow posted its best month side since 1976 as it advanced 14.4% in October. The S&P 500 was down 0.7%, the DJIA lost 0.3%, and the NASDAQ slipped 1% on Monday. The US 10-year Treasury yields rose 2bps to 4.05%. Lastly, WTI Crude oil fell 0.31% to $86.26 per barrel.

DeFi & CeFi

DeFi TVL is up 1.39%; Ethereum TVL is up 0.42%
DAO credit marketplace Porter Finance rebrands to Arbor Finance
StarkNet-based crypto wallet Braavos closes $10M funding round led by Pantera Capital
HUSD plummets after crypto exchange Huobi announced its delisting
Yield protocol Fluidity raises $1.3M in seed round led by Multicoin Capital
zkSync 2.0 mainnet Baby Alpha goes live and will be open for users in early 2023
Celer Network launches omnichain liquidity protocol Peti

Porter Finance, previously a credit marketplace for DAOs to issue convertible bonds, shut down in July this year after it unveiled the first-of-a-kind service in partnership with Ribbon DAO to issue over $4.2M in convertible bonds. The credit protocol has since been rebranded to Arbor Finance, and will be deployed on Ethereum. The protocol will keep its same core function, allowing DAOs to raise debt in stablecoins while using their native tokens as collateral.

HUSD fell to a low of $0.28 after Huobi announced that the stablecoin would be delisted. HUSD, which is issued by Stable Universal, had its own issues in August, when the stablecoin briefly lost its dollar peg and fell 8%. Huobi has offered to help customers exchange HUSD for USDT on a 1:1 basis.

On-Chain

Short-term Spent Output Profit Ratio (SOPR) for BTC has turned bullish. With long-term SOPR far from its resistance level, this sentiment switch could lead to a short-term rally. For ETH, the number of addresses holding 1+ coins just reached an all-time high of 1.6 million, supporting the bullish on-chain participants' sentiment.

Crypto Derivatives

Funding rate remained positive for both BTC and ETH perps
30-day IV dropped for BTC to 53.7% but saw an increase for ETH to 79.1%
30-day 25d put skew eased in magnitude for BTC to -0.5% while tightening for ETH to -2.1%

For futures, total liquidations yesterday amounted to $110.92M, of which 63.1% were long liquidations.

On the options front, IV diverged between BTC and ETH as IV dipped across the curve for BTC while IV edged higher for all of ETH maturities. Term structure, however, remains largely unchanged though there is a kink on ETH 18-Nov maturity. Put skew resumed its climb higher, with 7-day 25d for both BTC and ETH positive.

On the flow side, downside structures such as short risk reversals and bear put spreads dominated the tape for BTC, while ETH saw more bear call spreads. Strangles was also heavily shorted on ETH as traders looked towards selling IV which had risen significantly in the past week.

Crypto Technical Analysis

BTC closed 0.68% lower at $20,491. On the H1, BTC is currently range bound between $20,228 and $20,842. BTC however is still maintaining its bullish structure and could move further up if it remains within the range.

ETH closed 1.04% lower at $1573.40. On the H1, likewise, ETH is range bound between $1546 and $1635. If ETH remains in this bullish structure, we could see a further continuation of upwards price action.

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Yours sincerely,
Treehouse Research 🌳

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