🌳 Japanese Yen Rally Post 34-year Low Sparks Speculation; Eigenlayer Unveils Whitepaper For EIGEN

30 Apr 2024, Tuesday

2:42 AM

🌳 Japanese Yen Rally Post 34-year Low Sparks Speculation; Eigenlayer Unveils Whitepaper For EIGEN

Note: The S&P 500 E-mini Futures data is missing from 05:00 to 06:00 SGT on Saturday 27/04/2024 due to an issue with TradingView

BTC

ETH

S&P Futures 500

$64,554.75

$3,241.11

$5,142.50

(+2.10%)

 (-1.23%)

(+0.01%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)


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What We Are Covering Today

  • The Japanese Yen rally prompts speculation of government intervention; Biden administration faces a significant increase in lawsuits (More in Macro & TradFi)
  • Eigenlayer’s EIGEN whitepaper released;  Judge approves FTX’s $450M bankruptcy settlement (More in DeFi & CeFi)
  • Rune transaction fees plunge post-halving; ETH whales trade with mixed profitability on Binance (More in On-Chain)
  • Options market saw low trading volume in the last 24 hours with IVs inching lower (More in Crypto Derivatives)
  • BTC tests key trendlines for market direction; ETH's channel pattern indicates volatility (More in Crypto Technical Analysis)

Macro & TradFi

The Japanese yen has weakened significantly against the dollar, reaching a 34-year low before a sudden rally sparked speculation of government intervention. With the yen down about 10% this year, Japan's top currency official Masato Kanda has not confirmed any intervention but emphasized that excessive speculative movements would be countered. The situation is complicated by the Federal Reserve's intention to maintain high interest rates, making the dollar more attractive and putting further downward pressure on the yen. Analysts predict that the yen will fluctuate between 155 and 160 per dollar in the short term, with any potential intervention likely having only a temporary effect unless there are substantial shifts in Japan's monetary policy or fiscal strategies.

The Biden administration faces a surge in lawsuits from business and banking groups, who accuse federal agencies of regulatory overreach. The U.S. Chamber of Commerce anticipates filing at least 22 lawsuits against the administration by the end of President Biden's term, a significant increase from previous administrations. These lawsuits challenge a range of new rules from agencies on issues such as noncompete clauses, credit card fees, and climate disclosures, claiming these exceed the agencies' statutory authority. In response, the White House defends these regulations as measures that boost wages, reduce costs, and save lives, contributing to a fairer economy. 

U.S. stocks closed higher on Monday, driven by significant gains in Tesla and Apple, as investors anticipated the Federal Reserve's stance on interest rates in its upcoming policy meeting. Tesla shares soared by 15.3% after moving closer to launching its driver-assistance program in China, while Apple rose 2.5% amid renewed talks with OpenAI for AI technology integration. Despite mixed performance among other megacaps, with Alphabet, Meta Platforms, and Microsoft finishing lower, the Dow Jones Industrial Average increased by 0.38%, the S&P 500 was up by 0.32%, and the Nasdaq Composite gained 0.35%. Market sentiment was cautious, reflecting a reduction in expectations for interest rate cuts this year, amidst a backdrop of strong earnings reports with 78.1% of the 233 S&P 500 companies surpassing analyst expectations. Meanwhile, Domino’s Pizza shares jumped 5.6% after exceeding sales forecasts, contributing to the positive market trend.

CeFi & DeFi

  • Eigenlayer launches whitepaper for EIGEN token
  • FTX bankruptcy settlement amounts to $450M
  • Lido exceeds 1M validators
  • BCB Group secures digital assets license in France

EigenLayer has unveiled a whitepaper for its anticipated EIGEN token. With an impressive $15.7 billion already deposited by enthusiastic supporters, the protocol introduces a "restaking" feature. This feature enables users to leverage their staked ETH to provide security to other networks for additional rewards. Of approximately 1.67 billion EIGEN tokens, 45% are allocated to the EigenLayer community. These tokens are divided among stakedrops, community initiatives, and ecosystem development, reflecting a commitment to fostering a robust, community-driven framework. While the protocol has recently gone live, key functionalities such as the reward system and slashing mechanism are yet to be activated. The initial "stakedrop" will distribute 5% of the token supply to users based on their staking activities as of March 15, with claims set to open on May 10. This will be accompanied by a structured three-year lock-up period for investors and early contributors. Additionally, EigenLayer's Actively Validated Service (AVS) for data availability, known as EigenDA, along with future services, will utilize EIGEN tokens to secure various network functions.

In other news, a bankruptcy judge has approved a significant settlement between the now-defunct exchange FTX and the bankrupt firm Voyager Digital, amounting to $450 million. This settlement will see FTX "relinquish any and all rights" to the funds claimed by Voyager Digital. The agreement, facilitated by Judge John Dorsey of the United States Bankruptcy Court for the District of Delaware, entails Voyager receiving $5 million currently held in escrow and an additional $445 million from a loan repayment lawsuit involving Alameda Research. This settlement is a critical component of Voyager's broader strategy to compensate its creditors and mitigate losses from its July 2022 bankruptcy. Voyager has also secured claims worth millions from other entities, including Three Arrows Capital and its own Directors and Officers Insurance, aiming to reimburse its customers potentially up to 35.7% of their claims in crypto or fiat. Additionally, legal challenges continue as the U.S. Commodity Futures Trading Commission and the Federal Trade Commission pursue lawsuits against Voyager's former CEO, Stephen Ehrlich, over alleged fraudulent statements.

On-Chain

According to Glassnode, transactions involving Rune have generated a total of $117 million in revenue fees since the Bitcoin Halving. Impressively, $62.4 million was collected on the day of the halving itself. The Rune protocol aims to enable users to create tokens on the Bitcoin network, akin to those commonly found on other blockchains such as Ethereum. However, there has been a significant drop in revenue, with current fees from Rune transactions standing at $1.03 million. This decline underscores the volatility in transaction fee revenues, which can fluctuate dramatically in response to major cryptocurrency events like the halving.

Meanwhile, according to Spotonchain, the whale identified as 0x444 transferred 11,550 Ethereum (ETH), valued at approximately $37 million, to Binance at a price of around $3,200 per ETH, securing a modest profit of $247,000, or a 0.67% return. Despite this recent gain, the whale has experienced a net loss of $4.71 million from three ETH transactions since March 9, reflecting a -4.2% return on investment with a 67% loss rate. Intriguingly, this whale operates under the same Binance address as another prominent ETH trader, 0xb82, who has amassed $16.3 million in profits from five trades, marking a significant 12.9% gain with an 80% success rate. This parallel raises the possibility of a link between the two traders, underscoring the challenges even experienced participants face in navigating the highly volatile cryptocurrency market.

Crypto Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH declined slightly to 55.13% and 62.63%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH increased to 1.39% and -1.37%, respectively.
  • The futures market witnessed $142.26M in liquidations, with longs representing 64.99%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

13.78%

AVAX

OKX

Bybit

10.70%

SOL

OKX

dYdX

10.17%

AVAX

dYdX

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.


In the past 24 hours, BTC's 30-day ATM implied volatility (IV) has remained relatively stable, showing minimal changes. This indicates a lack of significant catalysts prompting movement in the crypto major in the near term. Traders seem to be waiting patiently for the Fed’s interest rate decision before making any substantial moves in the market.

For similar reasons, the BTC term structure has generally shifted downward in the last 24 hours. However, options with 3-day expiries have seen a slight increase in IV, aligning with the announcement date on interest rate decisions.

Regarding C-P skews, both BTC and ETH have witnessed a decrease in skew since yesterday, following the news of Franklin Templeton’s ETH ETF. However, both crypto majors remain at a skew higher than the previous high in the last 30 days, indicating a bullish sentiment among traders.

Lastly, @Paradigm reported a quiet trading session yesterday with low trading volumes across the board. Notable trades include the sales of 100x  28-Mar-25  50K Put for BTC and the purchase of 1500x 31-May-24 3.4K Call for ETH.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC is currently confronting a decisive moment as it tests the descending trendline identified earlier in the week, indicating a crucial juncture that could shape the short-term trajectory of the market. Should Bitcoin surpass the descending trendline, we might look to the next resistance level near $68K, marking an approximate 6% increase from the current price. Conversely, should it fail to break through, support lies near the $60K mark, a decrease of roughly 6%. The consolidation zone between these levels is critical, as a break in either direction could set the tone for subsequent movements.

On the other hand, ETH presents a compelling chart pattern in the form of an ascending channel, which traditionally denotes a consolidation period with a bullish bias in technical analysis. ETH is currently trading around $3.2K, encapsulated within the converging trend lines that define the channel. This pattern suggests a compression of volatility and a potential buildup for a subsequent breakout. Should the ascending channel resolve to the downside, there is a notable support zone at around $3K, a dip of approximately 6.6% from the current level. On the flip side, should ETH break above the channel, it may encounter resistance near $3.4K, indicating a possible ascent of about 5.8%.

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