🌳Report Shows Private Payroll Came Below Economists’ Expectations; Cathie Wood's ARK Invest Sells Coinbase and GBTC Shares

07 Dec 2023, Thursday

2:30 AM

🌳Report Shows Private Payroll Came Below Economists’ Expectations; Cathie Wood's ARK Invest Sells Coinbase and GBTC Shares

BTC

ETH

S&P Futures 500

$43,835.75

$2,241.25

$4,554.75

(-0.69%)

 (-3.01%)

(-0.64%)

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


GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • ADP report shows a slowdown in private sector hirings; Google releases its flagship AI model Gemini (More in Macro & TradFi)
  • Cathie Wood’s ARK Invest sells $33M of Coinbase shares, $5.9M of Grayscale Bitcoin Trust; Bitcoin ordinal inscriptions divide BTC community (More in DeFi & CeFi)
  • Cardano's market rises amid downtrend; Polygon PoS leads in blockchain inscription activity (More in On-Chain)
  • BTC 30-day IV declines; Traders shift towards bearish sentiment, hedging strategies (More in Crypto Derivatives)
  • BTC exhibits a horizontal wedge pattern, signaling market uncertainty, while ETH retraces below its lower trendline. (More in Crypto Technical Analysis)

Macro & TradFi

Following the JOLTS data release, ADP Research Institute reported that US companies scaled back hiring in November, with private payrolls increasing by 103,000, falling below economists' expectations of 130,000. Manufacturers reduced headcount to the lowest level since early 2022, reflecting evidence of a cooling labor market. Sectors like education and health services contributed to the growth in private payrolls, while leisure and hospitality, a key driver of job creation during the pandemic recovery, cut jobs for the first time since February 2021. The data adds to signs of a gradual cooling in demand for workers amid high borrowing costs and persistent price pressures.

In other news, Google has launched Gemini, its largest and most capable artificial intelligence model, offering three different sizes: Gemini Ultra, Gemini Pro, and Gemini Nano. The company plans to license Gemini to customers through Google Cloud for use in applications related to customer service, product recommendations, advertising, content creation, and more. Gemini Ultra, the largest model, outperforms human experts on a massive multitask language understanding (MMLU) test, covering subjects like math, physics, history, law, medicine, and ethics. The model is designed to seamlessly understand and operate across different types of information, including text, code, audio, image, and video. Gemini will power Google products like Bard chatbot and Search Generative Experience.

Yesterday's market performance saw a decline in stocks and oil as the November rally lost momentum due to reports of slower-than-expected job and wage growth. The NASDAQ dropped 0.6%, the S&P 500 fell 0.4%, and the DJIA lost 0.2%. Oil prices also sank amid concerns about a global economic slowdown, contributing to an overall bearish sentiment. The 10-year Treasury yield hit its lowest since early September, reflecting a shift in investor sentiment towards safer assets. Lucid Group (LCID) rebounded with a 5% gain, recovering from previous losses attributed to price cuts on its luxury electric vehicles. Walgreens Boots Alliance (WBA) continued its rebound, surging by 4.3% and maintaining an upward trajectory after hitting a 25-year low. Campbell Soup (CPB) led the S&P 500 with a remarkable 7.1% gain.

DeFi & CeFi

  • Cathie Wood’s ARK Invest sells $33M of Coinbase shares, $5.9M of Grayscale Bitcoin Trust
  • Bitcoin ordinal inscriptions divide BTC community amid network congestion
  • CZ’s guilty plea accepted by judge with no decision on his returning home
  • Crypto exchange Bitzlato co-founder pleads guilty to U.S. money transmitter charge
  • Pro-blockchain bill clears hurdle in U.S. House
  • Bitcoin Core’s ‘v26.0’ upgrade aims to improve eavesdropping, tampering
  • Worldcoin Foundation $5M grants program focuses on equitable systems
  • Societe Generale-backed euro stablecoin EURCV starts trading on Bitstamp

Cathie Wood's ARK Invest sold $33 million in Coinbase (COIN) stock on Tuesday, following a surge in its share price prompted by Bitcoin's recent rally to a 19-month high. A total of 237,572 COIN shares were sold across three different exchange-traded funds: Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF). Despite COIN shares reaching a peak of $147.86 during the day, they ultimately closed down 0.63% at $140.20. ARK also sold 168,127 shares in Grayscale's Bitcoin Trust (GBTC), valued at about $5.9 million. GBTC shares closed at $35.10, marking their peak since December 2021. ARK Invest often acquires crypto-related shares at lower prices and sells them during bullish periods.

Meanwhile, the resurgence of Bitcoin's value toward $45,000 and a notable uptick in unconfirmed transactions on the Bitcoin blockchain has revived the debate around Bitcoin ordinal inscriptions. Luke Dashjr, a prominent Bitcoin Core developer, highlighted that "inscriptions" are leveraging a vulnerability in Bitcoin Core to congest the blockchain with an increased number of transactions. These inscriptions create a larger transaction size, leading to a surge in unconfirmed transactions, driving up transaction fees, and surpassing memory usage limits. Dashjr noted that inscriptions circumvent transaction size limits by disguising data as program code. However, his objectors view them as an evolutionary development for Bitcoin. In addition, Jason Fang of Sora Ventures also argued that Bitcoin's original consensus allows for innovations like inscriptions, leading to increased miner profits through higher fees.

On-Chain

Moving on to on-chain, Cardano's (ADA) market valuation witnessed a significant uptick, registering a 7% rise amidst a general downtrend in the wider cryptocurrency market on Wednesday, a divergence that was notably pointed out by @Santiment. This bullish behavior in ADA's market value aligns with a reduction in the overall count of ADA wallet addresses. This contraction is typically seen as indicative of smaller, possibly retail, investors liquidating their positions, frequently at a disadvantageous rate, and implies the accumulation of assets by larger-scale, institutional investors or 'whales'. Such a consolidation trend, marked by the outflow of smaller holders and the inflow to larger ones, could be an early signal of a maturing market.

Elsewhere, in an analysis by @hildobby, Polygon Proof of Stake (PoS) stands out with the highest daily minting activity for the number of daily mints of inscriptions across various blockchain platforms, not including Bitcoin. As seen, there is a significant spike in inscription activity on the Polygon PoS network compared to other networks such as BNB and Avalanche C-Chain. Polygon's leading position could be attributed to its scalability solutions and lower transaction fees that attract NFT creators and projects, resulting in a higher number of mints. This data suggests that Polygon PoS is a preferred platform for developers and users looking to mint inscriptions, which might be NFTs or other digital assets, potentially signifying the network's robustness and popularity in the NFT space. The trend of Polygon PoS's dominance in this chart could also imply a growing ecosystem and user base, indicating a healthy demand for its minting services.

Crypto Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH fell to 53.30% and 55.09%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC fell to 1.98% while ETH fell to 2.69%.
  • The futures market witnessed $195.75M liquidations, with longs representing 69.58%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

55.78%

BNB

Bybit

OKX

47.08%

DOGE

Binance

Bybit

36.30%

BTC

Bybit

OKX

Source: @CexyArbBot Telegram Bot

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.


The 30-day implied volatility (IV) for Bitcoin has declined to 49.34%, signaling a tempered market expectation for medium-term price fluctuations. This reduction in IV may suggest a growing consolidation phase in the market. Conversely, the 7-day IV has seen a decrease to 47.30%, indicative of a contraction in short-term volatility expectations. The disparity between the 30-day and 7-day IV readings suggests a nuanced market outlook, where short-term volatility expectations are closely tied to significant price milestones.

The term structure of BTC is maintaining a contango pattern, with IVs across the front end showing a notable decline from the previous day, which reinforces the contango pattern observed.

The 25-delta 30-day call-put skew has narrowed to 1.98% and the 7-day skew fell to 0.76%, highlighting a shift in trader sentiment towards increased bearishness and immediate downside risk concerns. This change, reflecting a heightened demand for protective put options over call options, suggests a strategic move by traders to hedge against potential losses and secure profits from the recent market rally in BTC’s price.

During @Paradigm’s US Session Hours, highlighted option flows this week, emphasizing downside coverage with strategic put purchases and structured positions. Key BTC trades encompassed the procurement of 450x 26-Jan-24 50K/23-Feb-24 54K Call Calendars, and the sale of 200x 26-Jan-24 42K/50K Strangles. For ETH, significant activities included the sale of 2Kx 23-Feb-24 2800/28-Jun-24 2800 Call Calendars, and the purchase of 1.25Kx 15-Dec-23 2400 Calls.

Crypto Technical Analysis

Turning to technical analysis, BTC appears to have established a foothold around the $44K level as the surge in price decelerates from previous days. Upon closer examination of the shorter timeframe, a horizontal wedge pattern has emerged on the 1-hour chart, signaling a neutral stance and market uncertainty regarding BTC's near-future direction. RSI has also settled back into normal ranges. As the price nears the end of the wedge, heightened volatility is anticipated, which could propel BTC towards the $45K resistance or prompt a slight retracement back to the previous resistance-turned-support zone at $42K.

On the flip side, ETH underwent a notable downturn in the past 24 hours. Following its peak of nearly $2.3K yesterday, the price experienced a rapid decline of around 4%, effectively breaching the trendline constituted by local lower lows since the beginning of the month. Although the breakout is not yet confirmed, the possibility of a retracement from the extensive bullish momentum exists. Such a retracement might lead the price back to the previous support, characterized by the high in April and the lower trendline at a higher timeframe formed by the higher lows since October.

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