Powell Signaled “Party’s Back On”, Risk Assets Jumped; SBF Denied Malicious Intention In FTX

01 Dec 2022, Thursday

2:27 AM

BTC	ETH	S&P Futures 500
$17,154.25	$1,289.25	$4,087.75
(+1.62%)	(+1.00%)	(+3.11%)
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

Global markets push aggressively higher after Powell’s signal of slower hiking pace; China COVID official hint at a “new stage” while cities ease lockdown (more in Macro & TradFi)
Uniswap to launch its NFT aggregator, rewarding early adopters of Genie with USDC airdrops (more in DeFi & CeFi)
Accumulation of BTC continues as addresses holding more than 1 BTC reach ATH (more in On-Chain)
Skew back at pre-FTX levels; VIX near 3-month lows (more in Crypto Derivatives)
BTC and ETH rallied, showing clear signs of strength to continue to their next respective resistance levels (more in Crypto Technical Analysis)

Macro & TradFi

After playing the death reckoning of markets since March, Chairman Powell finally signaled a slower hike sequence would commence from December although managed bullish expectation by restating his commitment to controlling inflation. His statement overshadowed the mixed job data from ADP payroll (127k actual vs 200k consensus) and JOLTs openings (10.33M actual vs 10.3M consensus), leading to a broad based rally globally. On the other side of the Pacific, Chinese officials in charge of COVID fight said the country’s campaign against the virus has entered a “new stage”; meanwhile the city of Guangzhou removed lockdown measures from several city districts, further fueling the bet on China reopening. The HSI rallied more than 2% before Asia close and futures added another 2% in US trading. CNH rallied 1.4% against USD driven by a combination of reopening sentiment and weaker dollar.

US stocks roared higher; NASDAQ was up 4.7%, S&P 3.3% and DOW 2.3%, with the last now entering a technical bull market after a 20% rally from the trough. DXY tanked against major currencies, zooming into the Aug low. US Treasury bonds joined the party despite higher volatility; 10-year benchmark traded in a 20bps range before closing 13bps tighter; 2-year yield dived 16bps. Oil prices added more than 2% in both benchmarks amid broader risk asset rally.

Tonight’s markets will likely monitor the Oct US PCE print, initial jobless claims and Nov ISM PMI to gauge the Fed’s easing mind.

DeFi & CeFi

Binance acquires Japanese Crypto Exchange Sakura
SBF denies fraudulent intentions within FTX
Uniswap to launch new NFT Aggregator after acquiring NFT marketplace Genie
zkSync to integrate with RNS.ID to enable on-chain IDs
Pendle V2 is now live on Ethereum
Stargate’s STG rewards are now claimable for veSTG holders

In an interview by the New York Times with SBF, the ex-CEO of FTX denied having any knowledge of intermingling of funds between FTX and Alameda. He continued to push blame by saying that he was worried about even finding out about the intermingling of funds as he had a conflict of interest given his large stake in both companies.

Elsewhere, Uniswap is set to launch its own NFT aggregator, which will allow users to view listings of global floor price, bulk buy NFTs and list their own NFTs across seven different marketplaces. Built on top of Genie, which Uniswap acquired months back, the NFT aggregator will be 15% cheaper in gas fees than other marketplaces. Uniswap is planning to offer limited gas rebates to the first 22,000 users on their first transactions, which is valid until 14 December. Furthermore, early Genie adopters will be given an airdrop of 300 USDC for those who have more than one transaction on Genie before April 15, while Genie NFT holders will be eligible for 1,000 USDC.

On-Chain

For on-chain, the number of addresses holding 1+ BTC has reached an all time high of 953,462. This figure has shown continual growth, with 6.3% of the total circulating supply in custody by this group of investors. This can be indicative of how smaller investors have been capitalizing on the latest market turmoil and accumulating BTC.

Elsewhere, Santiment has noted that after the launch of Uniswap’s NFT aggregator, UNI had 8,000 active addresses and 3,180 new addresses created for the first time in 19 months.

Crypto Derivatives

Funding rate remains positive on both BTC and ETH perps
30-day IV fell for both BTC and ETH to 56.75% and 75.48%, respectively
30-day 25d put skew eased for both BTC and ETH to -9.37% and -10.14%, respectively

For futures, total liquidations came in at $82M, with the majority coming from shorts at $61M.

On the options front, IV fell across the curve as spot staged a rally. Put skew has also eased significantly with the 7-day skew rising back above pre-FTX levels. The term structure remains in contango while flat from medium to long term. Meanwhile, the VRP remains highly positive with +21% on BTC and +19% on ETH.

On the flow side, volumes primarily came from near-dated options, such as end-of-year expiries, and as short as 2 Dec 2022 expiries. Flows appear to be positively skewed to the upside, with large clips of short-dated calls purchased yesterday. One of them includes 7.7K contracts worth of ETH 2 Dec 2022 1.3K calls, which is likely to be a short-term play on upside gamma.

Lastly, VIX lost more than 2 points, now trading at 20.58 as the equity markets rallied.

Crypto Technical Analysis

BTC closed 4.48% higher at $17,170. On the H4, the $16,800 zone has held up well as a support region, with BTC testing it multiple times yesterday before bouncing off it. The $17,100 resistance was also broken as BTC closed at $17,170. The next resistance level to watch out for would be $17,561.

Meanwhile, ETH closed 6.53% higher at $1295.10. On the H4, ETH initially rejected the $1271 resistance before retesting the level and closing convincingly above it. Therefore, portraying a clear deviation pattern and possibly indicating strength to continue upwards to the $1342 level.

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