🌳 Japan Government Close To Intervening If JPY Falls Further; SEC Delays ETH Spot ETF Applications

24 Apr 2024, Wednesday

2:44 AM

🌳 Japan Government Close To Intervening If JPY Falls Further; SEC Delays ETH Spot ETF Applications

BTC

ETH

S&P Futures 500

$66,745.14

$3,229.22

$3,229.22

(-0.48%)

 (+0.32%)

(+1.42%)

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

  • Japan’s former vice minister hints at currency market intervention; Apple sales drop in China amid Huawei competition (More in Macro & TradFi)
  • Binance sued in Canada for violating Securities law; SEC delays BlackRock and Grayscale ETH ETF decisions (More in DeFi & CeFi)
  • Surge in AI and Big Data projects; Increased developer activity on projects like Chainlink and Ethereum (More in On-Chain)
  • BTC funding rates become positive once again; Skew IVs at zero (More in Crypto Derivatives)
  • BTC breaches $65K, eyes $70K; ETH challenges resistance, with potential for a 12.4% increase (More in Crypto Technical Analysis)

Macro & TradFi

According to Mitsuhiro Furusawa, former vice minister of finance for international affairs in Japan, the country is on the verge of intervening in the currency market if the yen continues to weaken against the dollar. Furusawa highlighted the rapid depreciation of the yen amid unchanged interest rates in the US and Japan as a key concern. He suggested that intervention might occur if the yen reaches certain levels against the dollar, with some analysts predicting further yen weakening. The rate differential between Japan and the US is cited as the main factor behind the yen's recent weakness. Furusawa also discussed the possibility of the Bank of Japan raising interest rates as early as July, depending on economic conditions.

Meanwhile, according to a report from Counterpoint Research, Apple experienced a significant drop in iPhone sales in China during the first quarter of this year, with a 19.1% decrease compared to the previous year. This decline was attributed to strong competition from domestic brand Huawei, which saw a surge of 69.7% in smartphone sales during the same period. Huawei's resurgence has intensified competition in the premium segment, impacting Apple's sales. Counterpoint Research suggests that Apple could see a recovery in China by introducing new color options, aggressive discounts, and new artificial intelligence features expected to be unveiled at its upcoming Worldwide Developers Conference in June. Overall, China's smartphone market witnessed a 1.5% year-on-year growth in the first quarter, with Counterpoint projecting low-single-digit growth for the year 2024, driven by advancements in AI features integrated into smartphones by Chinese manufacturers like Xiaomi, Oppo, and Huawei's spinoff Honor.

Lastly, U.S. stocks rebounded on Tuesday as investors awaited Tesla's first-quarter earnings report, marking the debut of the Magnificent Seven's quarterly releases. The Nasdaq Composite surged 1.6%, the S&P 500 rose 1.2%, and the Dow Jones Industrial Average gained 0.7%. Anticipation surrounded Tesla's results, with expectations of a decline in revenue and profit due to challenges in the U.S. market and a pricing battle in China. Meanwhile, Treasury yields retreated following the release of the S&P Global flash composite Purchasing Managers Index (PMI), indicating a slowdown in business activity growth for April. Tech giants rallied, with Verizon (VZ) rebounding and Microsoft (MSFT) and Amazon (AMZN) climbing ahead of their earnings reports. Nvidia (NVDA) and Super Micro Computer (SMCI) saw gains as the market embraced AI stocks post-sell-off. Investors will be looking out for the US GDP growth and the PCE Price Index, the Fed's preferred measure of inflation is due on Thursday, at 20:30 SGT.

CeFi & DeFi

  • Binance sued in Canada for violating Securities law
  • SEC delays BlackRock and Grayscale ETH ETF decisions
  • Binance exec will remain in Nigerian custody until May 17 bail hearing
  • Jack Dorsey’s Block announces development of ‘full Bitcoin mining system’
  • Token airdrops targeted by farm accounts and ‘Sybil attacks’
  • Tether vows to freeze assets after Venezuela looks to crypto to bypass oil sanctions

Despite announcing its withdrawal from the Canadian market in May 2023, cryptocurrency exchange Binance faces a new class-action lawsuit filed in Canada. The plaintiffs allege that Binance has engaged in the sales of crypto derivatives products that constitute violations of Canadian securities laws, and the lawsuit seeks damages and rescission of unlawful derivatives trades. While the Ontario Securities Commission's investigation is ongoing, this seeks to underscore the increased regulation and demand for greater standards within the Digital Asset industry.

In other news, the Securities and Exchange Commission (SEC) issued notifications regarding the postponement of its decision on the Grayscale application and the amendment of the BlackRock application for spot Ether Exchange Traded Funds (ETFs). These announcements occurred shortly after the SEC also delayed its ruling on the Franklin Templeton proposal for a spot Bitcoin ETF. The deadline for the SEC decision regarding the conversion of Grayscale's Ethereum Trust (ETH Trust) into a spot exchange-traded product (ETP) has been extended by 60 days.  Originally scheduled for April 24th, the SEC will now announce its decision by June 23rd as the Commission found it appropriate to give it sufficient time to consider the proposed rule change, as modified by the First Amendment. The SEC is expected to decide on the Franklin Templeton application by June 11, while no new deadline was specified for BlackRock’s amendment.

On-Chain

On-chain data from Santiment highlighted the top 10 crypto projects based on their on-chain development activity over the past 30 days. Optimism takes the lead to emerge as the most active project, with established players like Cardano, Chainlink, Ethereum, and Polkadot taking the lead among the top 10, which could be due to increased usage of the Optimism Superchain, which offers more customization and flexibility for developers. This data indicates ongoing development efforts within the Digital Asset industry and offers valuable insight into the top crypto projects. Active development can also be a positive indicator of potential growth and innovation within these ecosystems.

Another analysis by Santiment highlights the significant surge in market capitalization of AI and Big Data projects. Collectively, the top 100 AI and Big Data projects have grown 22% within the last week, with leading projects like OpenFrabrica and Akash Network witnessing exceptional growth of more than 49%, indicating strong growth and interest within the sector. While the current growth is impressive, investors should be cautious and analyze the sustainability of these projects and consider the evolving regulatory landscape around the Digital Asset industry.

Crypto Derivatives

  • Funding rates are positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remain flat at 64.28% and 70.91%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to -1.04%, while ETH dropped even further to -5.31%.
  • The futures market witnessed $124.03M in liquidations, with longs representing 61.6%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

20.64%

BNB

Binance

ByBit

16.14%

AVAX

OKX

dYdX

15.45%

AVAX

OKX

ByBit

Notes:

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.


Today's BTC implied volatility chart reflects a market recalibrating its volatility expectations with declines in both the 7-day and 30-day IVS. The 7-day ATM IV has seen a substantial decrease, dropping from 64.82 to 59.03, suggesting traders are not expecting abrupt movements in the near term. Similarly, the 30-day ATM IV has also fallen from 67.24 to 61.69, aligning with this calmer sentiment and signaling a growing market agreement on the longer-term outlook.

Today's BTC term structure is maintaining its contango shape. This suggests a general consensus on more immediate price stability. The forward curve's flattening points to a market growing more confident about BTC's price trajectory in the long run, adjusting to a lower volatility environment as it moves further from the halving event.

Looking at today's BTC skew chart, the 7-day skew is close to zero, indicating that traders are neither aggressively bullish nor bearish in the short term. The 30-day skew is mildly negative, showing a slight lean toward caution for the coming month, possibly in anticipation of an interest rate decision in June. Overall, the skews suggest that the market is currently balanced following the recent halving event, with no significant bias in either direction from traders.

@Paradigm reported that notable BTC option trades included selling 200x $75K Calls expiring on 3-May-24 and 150x $75K Calls for 31-May-24. Additionally, 150x Call Calendars for 10-May-24 $76K / 31-May-24 $80K and 145x for 26-Apr-24 $65K / 10-May-24 $69K were bought. A 150x 26-Apr-24 $66K Straddle was also sold. For ETH, a custom strategy involving puts for 3 May and 31 May was bought, and 1000x Calls at $3,300 and Puts at $2,700 for 31-May-24 were sold.

Crypto Technical Analysis

In technical analysis, In the 4-hour chart, BTC has surpassed the $65K resistance level and approached the 0.618 Fibonacci retracement level, trading around $66.7K. This particular Fibonacci level is critical as it often acts as a resistance-turned-support threshold in bullish scenarios. Should Bitcoin maintain its climb and surpass the 0.618 retracement level, the next resistance looms near the $70K mark, representing an approximate 5.85% increase from current levels. Conversely, any retracement may find support at the $66K level, corresponding to the 0.5 Fibonacci line. The RSI is currently at 62, trending upwards, suggesting that the market is experiencing positive momentum, without venturing into overbought territory, and will be an important indicator to watch for potential divergences as price interacts with these Fibonacci levels.

On the other hand, ETH is trading around $3.2K, with recent price action showing resilience as it pushes against previously established resistance levels. If the resistance is broken, the next significant resistance is projected to be near the $3.6K level. This would represent roughly a 12.4% increase from the current price. A break above this could confirm further bullish momentum, while a pullback might see the price retrace toward the support of around $3K, representing a downside of 6.19%. The RSI is positioned at 62, indicating growing momentum, yet remains shy of the overbought threshold, suggesting there may still be room for upside before the market becomes saturated with buyers. As ETH navigates these levels, the RSI’s trend will be crucial in gauging whether the momentum can sustain the push higher or if a consolidation phase is forthcoming.

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