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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Our Daily View
What We Are Covering Today
- Investors awaiting GDP and PCE reports for insights on economy's health; Major indices breaks multi-week winning streak (more in Macro & TradFi)
- HSBC pioneers crypto ETF trading in Hong Kong; DWF Labs bolsters Algorand ecosystem with strategic partnership (more in DeFi & CeFi)
- BTC holders’ cost basis suggest that the market is in equilibrium at the current price level and investors are starting to accumulate (more in On-Chain)
- 7-day 25-delta skew indicates call premium for BTC but put premium for ETH; 30-day VRP for ETH continues to contract (more in Crypto Derivatives)
- BTC dominance holds strong as ETH approaches inflection point at ETH/BTC trading range (more in Crypto Technical Analysis)
Macro & TradFi
While the Federal Reserve has chosen to temporarily halt rate hikes this month, Chair Jerome Powell has emphasized that this decision does not signal the conclusion of the central bank's efforts to tighten monetary policy. In fact, there is a distinct possibility of witnessing two additional rate increases later this year. The Federal Reserve remains resolute in its determination to guide inflation rates back to the desired annual target of 2%. Looking ahead, futures traders are currently indicating a 77% probability of the Federal Reserve implementing a quarter-percentage-point rate hike during its upcoming meeting next month.
On the other hand, investors can anticipate an important economic update this week as the personal consumption expenditures index for May is scheduled for release on Friday. This figure is projected to have a notable 4.6% rise in prices over the course of the year, shedding light on inflationary trends. Furthermore, reports on consumer confidence, new home sales, durable orders, and weekly jobless claims will also come out during the week. Notably, Thursday marks the eagerly awaited release of the next update on gross domestic product (GDP), offering insights into the economy’s health.
On Monday, the strength of tech stocks waned, interrupting the Nasdaq's eight-week period of upward momentum. Simultaneously, the S&P ended its five-week streak of consecutive gains. The Dow Jones Industrial Average experienced a minor decline of 12 points, equivalent to less than 0.1%. In comparison, the S&P 500 saw a 0.4% decrease, and the NASDAQ Composite suffered a 1.2% drop. U.S. crude rose 0.30% to close at $69.37 per barrel, while Brent closed at $74.18 per barrel, up 0.45% for the day.
DeFi & CeFi
- HSBC Hong Kong pioneers offering virtual asset ETFs and related investor education
- Singapore central bank reports on tokenized asset network models after trials
- NEAR Foundation partners with Alibaba Cloud to Boost Web3 Growth
- U.S. Federal judge rejects Binance's motion to limit SEC's public comments
- Binance reverses its decision to delist privacy coins in the European Union
- ProShares' Bitcoin futures ETF surpasses $1 billion in assets under management
In a significant shift towards the acceptance of digital assets, HSBC, one of Hong Kong's largest banks, has now enabled its customers to trade Bitcoin and Ethereum Exchange-Traded Funds (ETFs) listed on the Hong Kong exchange, marking it as the first bank in the city to do so. This pivotal decision, prompted by the increasing demand for cryptocurrency exposure and the recent ETF applications from crypto asset management companies, extends the accessibility of digital currencies to Hong Kong citizens. It allows HSBC customers to diversify their investment portfolios with regulated, exchange-traded crypto assets, signifying a potential step towards further integration of digital currencies into the global banking sector.
DWF Labs has announced a strategic partnership with the Algorand Foundation aimed at bolstering the Algorand blockchain ecosystem. The agreement includes a $50 million purchase of ALGO tokens to infuse liquidity and a Memorandum of Understanding (MOU) to allocate funds towards projects focusing on DeFi, Art and Music, Gaming, Oracles and Bridges, and Infrastructure within the Algorand blockchain. Algorand, a Layer1 public blockchain infrastructure based on a decentralized proof-of-stake model, facilitates smart contract applications. This collaboration is a significant step towards promoting innovation and growth within the Algorand ecosystem.
Utilizing data from @glassnode, the rate of change on a weekly basis for all BTC holders' cost-basis was close to zero last week, indicating a stable balance at the current BTC price level. The realized price, often considered the aggregate cost basis for the market, for long-term holders have decreased. This indicates that investor psychology have started to shift away from a bearish outlook in 2022, as these levels are increasingly perceived as an opportunity to accumulate assets at lower price points rather than sell for immediate liquidity.
Next, @Lookonchain identified an unusual movement of tokens involving DWF Labs, a crypto market maker and multi-stage investment firm. Within a short span of four hours, the Jasmy deployer deposited 770M JASMY tokens onto Gate.io, followed by DWF Labs withdrawing 700M JASMY tokens from the platform. JASMY is associated with an IoT democratization project but has received limited attention since its 2021 crash. While no official statements have been released, speculation arises regarding whether this transaction is a coincidence or if DWF Labs acquired 700M JASMY tokens from the JASMY Deployer.
- BTC and ETH funding rates remain positive
- 30-day BTC ATM IV fell to 45.01% while ETH ATM IV slightly rose to 42.24%
- Deribit Implied Volatility Index (DVOL) is 49.48% and 46.54% for BTC and ETH respectively
- 30-day 25-delta skew (C-P) for BTC and ETH is at 3.34% and 1.11% respectively
Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram
1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps
2) CEX observed include Binance, Bybit, OKX & DYDX
@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo
Over the last 24 hours, the futures market witnessed liquidations totaling $104.41M, with long positions comprising a significant 69% of the overall liquidated positions.
BTC ATM IV at the front of the curve significantly increased in the past day, with 0DTE IV and 2DTE IV rising by 6% and 4% respectively. Overall, the curve remains in contango, with IV decreasing in the medium term and rising around 276DTE. For ETH, 0DTE IV saw an almost 5% increase, while IV for tenors between 30 to 185DTE slightly fell by up to 1%.
The 25-delta skew in BTC shows a prominent call premium, with the 7-day skew at 3.15%. Shorter-term tenors exhibit a skew around 3.3%, while the medium-term 180-day tenor stands at approximately 5%. In contrast, ETH displays a divergence across maturities. The 7-day skew indicates a put premium at -0.75%, while the 180-day skew suggests a call premium at 3.31%. This indicates a potential focus on downside hedging in the near-term for ETH.
@Laevitas, the 30-day volatility risk premium (VRP) for BTC remains positive at 3.91%, but VRP for ETH has turned slightly negative, highlighting an increase in 30-day realized volatility compared to the 30-day IV that the market had priced in.
Moving onto notable trade structures captured on Paradigm, the top structures were 590x 29 Dec $35K / $45K call spreads bought (bullish), 450x 30 Jun $30K / $31K strangles sold (expecting volatility contraction), and 263x 29 Sep $35K / $40K call spreads bought (bullish). For ETH, the top structures were 2,250x 28 Jul $2.3K calls bought outright, 2,000x 29 Sep $1.5K / $2.2K strangles sold, and 1,250x 28 Jul $2.1K calls sold.
The VIX rose slightly to 14.25.
Crypto Technical Analysis
BTC remains in a healthy range between $30K and $31K, indicating stability after its rapid ascend from $25K. The relatively muted trading session could be attributed to traders awaiting further confirmation, potentially until Federal Reserve Chair Powell's upcoming speech tomorrow. The recent bullish momentum sparked by the news of BlackRock's ETF filing suggests that pullbacks into the consolidation range offer favorable entry opportunities for those who missed the positive price action. Additionally, the formation of higher lows around $25K reaffirms the overall upward trend in BTC. The three-month consolidation period since mid-March has established a strong demand zone in the market.
ETH trading mirrored BTC's muted session, as market participants awaited further confirmation. ETH continues to trade within the horizontal range of $1.70K to $1.94K, with the $1.94K level acting as a persistent resistance since mid-March. Efforts are being made by ETH to establish a breakout; the formation of higher lows around the $1.62K level signaled a positive development. Until a confirmed breakout occurs, it is expected that ETH will persist in trading within the range of $1.70K to $1.94K. The overall trend for ETH remains upward.
ETH/BTC has been oscillating within a range of 0.06 to 0.085 since May 2021. Currently, ETH is trading near the lower end of this range. While ETH briefly gained momentum against BTC following the Shapella upgrade in mid-April, it quickly lost its appeal. The ETH/BTC pair remains in a downtrend, and it is expected to continue until it reaches the 0.06 level once again. BTC has maintained its dominance over altcoins, making it a more favorable option compared to ETH in the current market conditions.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳