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Our Daily View
What We Are Covering Today
- IMF Increases Global Growth Forecast; US sees higher job openings and lower voluntary quits (More in Macro & TradFi)
- Ethereum progresses with Dencun upgrade; Terraform Labs files for bankruptcy amid SEC suit (More in DeFi & CeFi)
- Minor sell-off from Bitcoin miners; $PENDLE early investors realize profits (More in On-Chain)
- 30-day 25-delta skews increased; Neutral sentiment emerging (More in Crypto Derivatives)
- BTC retraces from channel peak; ETH re-enters wedge after breakout attempt (More in Crypto Technical Analysis)
Macro & TradFi
The International Monetary Fund (IMF) has increased its global growth forecast for 2024 to 3.1%, up from the 2.9% projected in October 2023, citing better-than-expected expansion in the US and fiscal stimulus in China. However, the IMF warned of risks from wars and inflation. It mentioned tighter central bank policies and public-spending cuts in some countries as reasons for slower growth compared to the two decades before the pandemic. The IMF Chief Economist, Pierre-Olivier Gourinchas, highlighted the global economy's resilience but noted the possibility of turbulence ahead. The forecast assumes a soft landing with declining inflation and sustained growth, but downside risks include geopolitical shocks and persistent inflation. The IMF urged central banks to normalize monetary policy carefully. While the US growth forecast was raised to 2.1%, the euro area's outlook was cut to 0.9%, reflecting the impact of the Ukraine war. China's growth projection increased to 4.6%. The IMF warned about the risk of global trade fragmentation into rival blocs and urged vigilance regarding a potential escalation of conflict in the Middle East.
Elsewhere, US job openings unexpectedly increased to 9 million in December, marking the highest level in three months, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The figure exceeded all estimates in a Bloomberg survey of economists. However, the number of people who voluntarily quit their jobs fell to 3.4 million, the lowest in nearly three years. The decline in quits suggests that workers are becoming more cautious and may be less confident in their ability to find better job opportunities. The report indicates a labor market that is still strong, with solid demand for workers, but workers are increasingly holding onto their jobs. Federal Reserve officials are looking for signs of softer labor demand, ideally through fewer job postings and slower hiring. The overall level of layoffs remains subdued, but layoffs in transportation and warehousing have been rising and are now at the highest level since June 2020.
Lastly, on Tuesday, stocks exhibited a mixed performance as the Dow Jones Industrial Average rose by 0.4%, the S&P 500 slipped 0.1%, and the Nasdaq Composite lost 0.8%. The Federal Open Market Committee (FOMC) began its policy meeting, expecting to maintain interest rates. Investors are closely monitoring the FOMC's statement and Chair Jerome Powell's press conference for clues on future rate adjustments. Tech giants Microsoft and Alphabet reported quarterly earnings, with Microsoft expected to achieve its highest revenue in nearly two years. Financials led the Dow higher, with JPMorgan Chase and Goldman Sachs gaining. Apple shares fell after a warning of a potential iPhone sales decline, while the S&P 500 saw notable performances from companies like MSCI, General Motors, and Sysco.
CeFi & DeFi
- Ethereum's 'Dencun' upgrade goes live on the second testnet
- Terraform Labs says bankruptcy will aid appeal of SEC suit
- Thailand's SEC Breaks New Ground in 2024 With Crypto-Friendly Rules
- dYdX Chain Introduced Interchain Accounts, Enabling Liquid Staking
- Immutable zkEVM Launches Mainnet Early Access Mode
The Ethereum blockchain's most significant upgrade since early 2023, the Dencun project, successfully launched on the Sepolia testnet, marking its progress on the second of three test networks. This upgrade introduces "proto-danksharding," aimed at reducing transaction costs for layer-2 blockchains and enhancing data availability through new data compartments known as "blobs". This feature is crucial for supporting the rapidly expanding number of layer-2 chains on Ethereum. The Dencun upgrade, initially planned for the end of 2023, follows the Shapella upgrade that facilitated ether (ETH) withdrawals. Dencun's successful implementation on the final testnet, Holesky, scheduled for February 7, will pave the way for its activation on Ethereum's main blockchain, indicating a significant step forward in Ethereum's ongoing evolution and its ability to handle growing scalability demands.
In other news, Terraform Labs, embroiled in a lawsuit with the U.S. SEC, believes its recent decision to file for Chapter 11 bankruptcy will bolster its appeal. In a January 30 filing to a Delaware Bankruptcy Court, CEO Chris Amani emphasized that the bankruptcy protection could circumvent the need for a substantial "supersedeas bond" typically required for appealing SEC cases. This strategic move aims to challenge the SEC's authority over Terraform Labs' cryptocurrency assets, asserting they fall outside the SEC's jurisdiction. The appeal, if successful, would dismiss the primary claim against Terraform Labs, benefiting not just the company but its creditors and the broader community. This development follows the SEC's February 2023 allegations of multi-billion-dollar fraud involving Terraform's tokens, UST and LUNA, and the subsequent collapse of Kwon’s Terra Money ecosystem in May 2022. Kwon, currently facing potential extradition and legal proceedings in multiple countries, awaits his fraud trial, now postponed to March 25.
Based on the on-chain data provided by CryptoQuant, the narrative of a significant Bitcoin sell-off by miners seems to be overstated. The comparison of the miner reserves from November 28, 2023, which stood at 1,845,997 BTC, to the current reserves as of January 30, 2024, showing a total of 1,833,222 BTC, reveals a relatively small reduction of only 12,755 BTC. This suggests that the amount of Bitcoin sold by miners is minor and is unlikely to have had a substantial impact on the market. The overall sentiment about miner sell-offs appears to have been triggered by recent outflows from miner wallets. However, these have been largely balanced by corresponding inflows, as reflected in the on-chain data. The fluctuations in miner reserves are typical of the ebbs and flows of mining operations, which may involve selling some reserves for operational costs or market strategies but do not necessarily indicate a broader trend or sentiment among miners about the future of Bitcoin. The data seems to reflect normal operational adjustments within the mining community. Investors could consider these factors when interpreting miner activity and its potential impact.
Elsewhere, the on-chain data analysis by @spotonchain reveals strategic movements in $PENDLE holdings. Two wallets identified as likely Pendle Finance investors made a notable transaction by depositing 477,211 PENDLE, valued at approximately $1.27 million, into Binance at an average price of around $2.66. These wallets have a history of vested interest in the token, with 1.06 million $PENDLE acquired in 2022 and 2023 when the price was significantly lower, around $0.146. Despite the deposit, they retain 487.5K $PENDLE, worth approximately $1.31 million, and have realized a substantial profit of $2.42 million, which is a 17-fold increase from their initial investment.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 46.61% and 48.18%, respectively.
- The 30-day 25-delta skew (C-P) for BTC and ETH increased to 2% and 3.8% respectively.
- The futures market witnessed $131.5M liquidations, with shorts representing 40.6%.
Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram Bot
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 term structure of BTC continues to maintain its contango shape, with the IV for short-term expiries ranging from 2 days to 86 days seeing an increase from the previous day. This change could be due to investors increasingly buying options to protect themselves from perceived volatility during the ETH Dencun Upgrade and BTC Halving event, due to happen during this period.
The term structure of BTC continues to maintain its contango shape, with the IV for short-term expiries seeing a dip from the previous day. This trend indicates a potential lack of interest among options traders in purchasing near-dated options in anticipation of forthcoming US labor data and major technology company earnings. This shift in trading behavior may reflect market expectations for stability in the short term.
The positive 25-delta call-put skews for BTC suggest a bullish sentiment in the market. The current 7-day skew for BTC options stayed relatively unchanged at 0.82%, which is lower than the 30-day skew at 1.91%, suggesting that traders are leaning towards holding a more conservative position in the immediate term, but have a favorable outlook in the next 30 days.
Lastly, according to @Paradigm’s US Session hours, Key BTC trades involved the acquisition of 375x 9-Feb-24 45K calls and 300x 23-Feb-24 45K/50K Call Spreads, both reflecting a bullish sentiment among traders. Key ETH trades were the acquisition of 8250x 23-Feb-24 2500 calls, 6000x 23-Feb-24 2700/3100 call spread, and a 5000x(inverse) 16-Feb-24 2500 / 29-Mar-24 3500 call calendar.
Crypto Technical Analysis
Moving on to Technical Analysis, BTC shows a clear retracement following its contact with the upper boundary of the ascending channel, likely due to the selling pressures or profit-taking. The current price is hovering around the $42.8K mark, and should this level be compromised, the next support to watch is the lower trendline of the channel, potentially around the $42.2K range, which would represent approximately a 2.1% decrease from the current levels. Conversely, should the price recover, the immediate resistance lies at the upper trendline of the channel, which, if revisited, could be around the $44K area. The RSI in this timeframe is currently at 54.5, indicating a slight downturn in momentum but remaining in neutral territory. It is essential to monitor if the RSI continues this trend as it could signal an increased likelihood of either consolidation or a potential reversal of the current uptrend within the channel.
ETH’s price on the 4-hour chart recently experienced a brief breakout above the ascending wedge pattern, which is often considered a bearish reversal pattern when appearing within an uptrend. However, the price has re-entered the wedge, suggesting it was a false breakout. Currently, the price is stabilizing at 2.33K within the wedge, and the market may be seeking direction. A further drop could take Ethereum to test the next significant support near 2.15K, marking a potential decrease of approximately 6.86% from the current price. Conversely, if the price maintains within the wedge and attempts another breakout, the resistance to watch would be the recent high around 2.4K. RSI retreating from the overbought territory could indicate a normalization of buying pressure, which might lead to consolidation within the wedge before the next significant price move.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳