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Our Daily View
What We Are Covering Today
- Israel expanding military operations into southern Gaza; Evergrande granted an adjournment until Jan (More in Macro & TradFi)
- BlackRock, Bitwise file updated spot Bitcoin ETF applications with the SEC; Michael Saylor’s Bitcoin bet profit tops $2B (More in DeFi & CeFi)
- Chainlink's CCIP revenue rises; Kyber Network exploiter transfers funds, eluding recovery (More in On-Chain)
- BTC volatility stabilizes in contango; Skews hint at cautious short-term optimism (More in Crypto Derivatives)
- BTC and ETH both show a slowdown in their recent surges, with BTC forming a potential double-top pattern on the lower timeframe (More in Crypto Technical Analysis)
Macro & TradFi
Israel has expanded military operations into southern Gaza, targeting about 200 sites, including weapons depots used by the militant group Hamas. This move poses a risk to hundreds of thousands of Palestinians who had fled south, as US officials express increasing concerns about the impact of the conflict on civilians. The week-long truce brokered by Qatar, Egypt, and the US collapsed on Friday, leading to a resumption of fighting and raising fears about the extent of the ground offensive and the potential for regional destabilization. US Defense Secretary Lloyd Austin and Vice President Kamala Harris have both emphasized the need for Israel to do more to protect innocent civilians, reflecting growing unease about the civilian toll of the conflict.
Meanwhile, China Evergrande Group has been granted an adjournment until Jan. 29 for a court hearing regarding a liquidation petition, providing the embattled property developer time to finalize a revamped offshore debt-restructuring plan. Evergrande, the world's most indebted developer with over $300 billion in liabilities, defaulted on offshore debt in late 2021, becoming emblematic of China's property sector debt crisis. The unexpected adjournment has temporarily alleviated market concerns, allowing Evergrande stock to rebound more than 13%, but there are lingering uncertainties about its restructuring plan's acceptance by creditors.
U.S. equities market retreated on Monday with the NASDAQ dropping by 0.8%, the S&P 500 declining 0.5%, and the DJIA slipping 0.1%. The week is anticipated to bring significant labor market updates, including the Job Openings and Labor Turnover Survey (JOLTS), ADP's employment report, and the government's employment report. While November's rally showed some cooling off last week, major indexes still secured their fifth consecutive week of gains. Notable stock movements included a 3.6% rise for 3M following an upgrade, health stocks outperforming the broader market, and Bath & Body Works leading the S&P 500 with an 8.9% gain. However, tech mega-caps, including Salesforce, Intel, Microsoft, Nvidia, Alphabet, Amazon, and Meta, faced declines, impacting the NASDAQ’s performance.
DeFi & CeFi
- BlackRock, Bitwise file updated spot Bitcoin ETF applications with the SEC
- Michael Saylor’s Bitcoin bet profit tops $2B
- Crypto.com receives UK authorization as an electronic-money institution
- El Salvador’s Bitcoin investment turns profitable
- Tokens linked to Terra shoot 70% on Bitcoin linking, burn program
- Blur dominates almost 80% of NFT trading volume as market activity spikes
- Franklin Templeton CEO holds Bitcoin, Ether, Uniswap, SushiSwap tokens
- Safe Wallet scammer steals $2M through ‘address poisoning’ in one week
Asset management giant BlackRock has submitted an amended S-1 filing for its proposed spot Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC), mirroring a similar move made by Bitwise. While the SEC has not yet approved a spot Bitcoin fund and has consistently delayed received applications, experts suggest these recent filings might indicate ongoing discussions. Bloomberg Intelligence analyst James Seyffart noted multiple issuers submitting similar filings, hinting at mutual instructions from the SEC. Seyffart suggested extensive efforts and discussions between both parties to iron out the complexities. BlackRock's updated filing introduced new measures for monitoring unusual price movements, emphasized anti-money laundering compliance, and presented an audited statement by PwC.
In other news, business intelligence firm MicroStrategy (MSTR) boasted over a $2B profit on its significant Bitcoin holdings as the cryptocurrency surged to $42,000. Led by CEO Michael Saylor, the company steadily accumulated Bitcoin since August 2020. Their latest purchase was last month, amassing 174,530 Bitcoin at an average price of $30,252 each, with an original investment of $5.28B. With Bitcoin's value reaching $42,000, the total worth of MSTR's holdings soared to approximately $7.3B. During the market downturn of 2022, Saylor persisted in expanding the company's crypto assets by leveraging a mix of debt and equity issuance. Consequently, MicroStrategy's stock (MSTR) saw a surge of around 6% in Monday's trading.
In an analysis by @ericwallach, there has been a notable rise in cumulative revenue for Chainlink's Cross-Chain Interoperability Protocol (CCIP), which signifies Chainlink's enhancement as a critical infrastructure layer for blockchain interoperability, increasing over the past 2 weeks by around 15% to $151,833. CCIP's utility in enabling decentralized applications (dApps) and web3 innovators to securely manage their cross-chain functionalities—spanning data and asset transfer—is a substantial value proposition. This upward trajectory in revenue not only reflects the growing adoption and dependency on Chainlink's protocol for cross-chain interactions but also underscores the increasing importance of interoperability solutions in the expanding blockchain ecosystem.
Meanwhile, Spotonchain recently highlighted that the exploiter of Kyber Network's KyberSwap Elastic incident, which occurred on November 22, 2023, has recently transferred 3,000 WETH (worth approximately $6.34 million) from Arbitrum to Ethereum. Furthermore, they have moved 1,000 ETH (valued at around $2.15 million) to Tornado Cash using the address 0x4ea. This activity suggests an intention not to return the stolen funds to Kyber Network. These actions follow the KyberSwap team's statement, which emphasized their dedication to collaborating with law enforcement and cybersecurity experts in efforts to locate the exploiter and recover the approximately $48.8 million lost from KyberSwap Elastic liquidity pools.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH stayed relatively flat at 54.83% and 56.30%, respectively.
- The 30-day 25-delta skew (C-P) for BTC fell to 4.52% while that of ETH increased to 5.19%.
- The futures market witnessed $347.68M liquidations, with shorts representing 59.22%.
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.
Despite BTC’s rally in the spot market, BTC’s 30-day implied volatility (IV) has decreased slightly to 51.10%, signaling a reduction in the market's expectation of significant price swings in the near term. Similarly, the 7-day IV has decreased to 49.30%.
The term structure of BTC is maintaining a contango pattern. IVs across various tenors have remained relatively unchanged from the previous day with the relatively flat structure of the curve across different expirations suggesting a market consensus on volatility expectations.
The decrease in the 25-delta 30-day call-put skew to 4.52% suggests that the demand for protective put options relative to call options has increased, indicating an increase in bearish sentiment among traders for the mid-term. Conversely, the increase in the 7-day skew to 4.87% implies an immediate concern for upside risk. Given that BTC has risen above $41K, these skew movements may reflect that traders are cautiously optimistic about the near-term price direction of BTC but are still hedging their positions against potential short-term downside risks.
During @Paradigm’s Asia / Europe Session Hours, highlighted option flows this week emphasized downside coverage with strategic put purchases and structured positions. Key BTC trades encompassed the procurement of 1715x 29-Dec-23 40K Calls sold, 1375x 29-Dec-23 42K Calls sold, and a singular transaction that involved the sale of 575x 29-Dec-23 45K Calls bought. In parallel, significant ETH options activity was noted with the purchase of 9250x 29-Dec-23 2500 Calls and the sale of 6750x 29-Dec-23 2200 Puts.
Crypto Technical Analysis
Turning to technical analysis, the rapid surge in BTC’s price appears to have slowed as it reaches the previously identified resistance zone between $41.0K and $42.5K. Despite this, the RSI remains elevated, currently at 75.77 on the 4-hour chart, indicating an overbought condition. On the 1-hour chart, a potential double top pattern has emerged, suggesting a short-term reversal may be in the offing. If this pattern materializes, BTC is likely to test the $39.7K level at the upper boundary of the rising channel. Conversely, if the bullish momentum persists and the price confirms a break above this level, the immediate next resistance lies at $45.0K, a level last observed in March 2022, representing a potential 8% upside.
Shifting our focus to ETH, it has undergone a movement similar to BTC, experiencing a deceleration in the rapid pumps of the last few days. The RSI has also remained in the overbought territory, with slight retracements since its peak. While there is no clear resistance in the immediate future, ETH may retrace along with BTC if a short-term reversal occurs. If this materializes, ETH's price could potentially move towards $2.11K, representing a strong support at the intersection of the horizontal channel's upper boundary, the support formed by the previous high in April, and the lower trendline formed by the local higher lows.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳