Stock Rally Fizzles As Manufacturing Contracted For The First Time In 29 Months; Blockfi Reveals Losses On FTX

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Markets consolidate after big day; all eyes on NFP tonight (more in Macro & TradFi)
• Centralized lender reveals to have $355M of assets lock on FTX (more in DeFi & CeFi)
• BTC Supplies in profit and loss cross could indicate an attractive price level to accumulate (more in On-Chain)
• Crypto vols continues its descent; VIX falls below 20 for the first time since August (more in Crypto Derivatives)
• BTC and ETH meet some slight resistance albeit still holding up above key short-term supports (more in Crypto Technical Analysis)

Macro & TradFi

Job data missed consensus (initial jobless claims 225k actual vs consensus 235k) while Fed’s inflation gauge of choice PCE came in slightly below expectation (0.2% actual vs consensus 0.3%) and Nov ISM PMI marginally disappointed too (49 actual vs 49.8 consensus). Markets consolidated after the big spike on Powell speech as indices battled 200d moving average and brace for today’s Nov NFP data print.

US stocks futures gave up some gains after a full-blown rally day, with NASDAQ and S&P shedding ~0.3% while DOW retreated ~0.6%. US Treasury bonds, however, extended their bullish momentum as 10-year benchmark yields dipped further to 3.53% (-7bps). The dollar wavered against major currencies as well. Oil pushed higher but closed off the intra-day highs; WTI +1% and Brent +0.3%. Gold rode the dollar weakness higher for the second day straight, adding almost 2% to the key level of $1,800.

DeFi & CeFi

• BitDAO unveils modular Ethereum L2 network, Mantle
• Telegram to launch its own DEX and non-custodial wallet
• BlockFi revealed to have $355M of assets locked on FTX
• Magic Eden launches NFT tool to enforce creator royalties

In its bankruptcy filing report, BlockFi was reported to have $355M in assets locked on FTX. While BlockFi took a loan out from FTX for $275M, Alameda’s loan from BlockFi which amounted to $671M defaulted as well amidst the debacle. BlockFi has been approved by the court to continue core operations such as paying wages and critical vendors.

Magic Eden has introduced a new tool, the Open Creator Protocol, to allow new NFT creators to ensure royalties are paid whenever their NFTs are traded on a marketplace. This open-source tool allows creators the option to make sure royalties get paid regardless of marketplace.

On-Chain

For on-chain, the BTC supply in profit has continued declining while the BTC supply in losses has continued climbing. The yellow boxes indicate where the percentage of supplies in profit and losses have overlapped and has historically been a region where BTC price is at an attractive level.

Elsewhere, Miner BTC balances dropped by 10k BTC yesterday, down in total by 19k BTC since the peak earlier this month. Drops in miner BTC balances usually mean either BTC is being sent to exchanges to be sold or wallet reshuffling is occurring. These conditions are where miner capitulation is usually observed, which is something to keep an eye out for.

Crypto Derivatives

• Funding rate remains positive on both BTC and ETH perps
• 30-day IV fell for both BTC and ETH to 52.48% and 73.86%, respectively
• 30-day 25d put skew eased for both BTC and ETH to -8.69% and -11.31%, respectively

For futures, total liquidations came in at $37M, the lowest we have seen all week round, with the majority coming from longs at $25M.

On the options front, IV continues its downward trend, as medium-term IV is now following suit, with the 90-day IV falling below 60. IV percentile on both BTC and ETH are at 2.2% and 27%, respectively. Term structure remains in steep contango on the front-end, while put skew continues to rise, particularly on shorter-dated tenors. In the last 24 hours, the put-call ratio on both BTC and ETH has been less than one, at 0.9 and 0.6, respectively.

Topside flows continue to dominate the tape as bull call spreads and bull put spreads were the top structures traded in the past 24 hours. Plenty of outright calls were also bought, most notably near-dated options such as the BTC-16DEC22-19000C saw more than 700 contracts purchased.

Lastly, the VIX fell below 20 for the first time since August, now trading at 19.58.

Crypto Technical Analysis

BTC closed 1.12% lower at $16,977. On the H4, prices met resistance at around $17,237, rejecting the level twice. Yet again, the 16,800 support area held up well, with its price rebounding off it. As long as prices hold up at this support, we should see a retest of the 17K levels in the short-term.

Meanwhile, ETH closed 1.44% lower at $1276.50. On the H4, some resistance was met at the $1295 level as ETH rejected it yesterday. However, the $1271 support level remains intact, with its price being unable to close below it even after 3 attempts. Holding above this level would indicate strength for ETH to attempt going to $1300+ again.

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Daily Readings

TradFi

• IPO market nearly paused, but exchange leaders expect 2023 boost

• Salesforce shares tumble after surprise exit of co-CEO Taylor

• Inflation may be peaking, but doubts emerge about its decline

• DOJ watchdog seeks independent review of FTX bankruptcy

• Citigroup in talks to recoup errant $500 mln Revlon loan payment

• FTX ex-CEO Bankman-Fried claims he was unaware of improper use of customer funds -ABC News

• U.S. farm incomes seen soaring to new highs on global food, feed demand

• Wall Street ends mixed; Salesforce selloff pressures Dow

• U.S. consumer spending powers ahead in October; inflation cooling

• Blackstone's $69 bln REIT curbs redemptions in blow to property empire

• U.S. construction spending falls in October on single family housing

• Canadian factory sector activity slows for fourth month

• Global manufacturing gloom dims UK activity: PMI survey

• Wrong Covid test results in China raise concerns 'the pandemic may never end'.

• Asia markets fall as investors seek clarity on China's Covid rule changes.

• Russian oil sanctions are about to kick in. And they could disrupt markets in a big way.

Crypto

• First Mover Asia: Cryptos' Short Win Streak Ends as Investors Remain Cautious.

• Crypto Markets Today: CFTC Chair Proposes Pause to Overhaul Digital Commodities Consumer Protection Bill.

• Stripe Debuts Fiat-to-Crypto Payment Offering for Web3 Businesses.

• November Jobs Report Due Friday as the Fed's Powell Confirms Slower Pace of Rate Hikes.

• Magic Eden Launches Protocol to Enforce Creator Royalties.

• FTX Collapse Highlights Need for Global Crypto Regulations, Says US Treasury’s Adeyemo: Reuters.

• MakerDAO Community Votes to Hike DAI Rewards to 1%.

• CME Group Teaming With CF Benchmarks for 3 New DeFi Rates and Indices.

• Compass Mining Launches Bitcoin Miner Protection Plan.

• First Mover Americas: Crypto's November Fall.

• Polygon APIs to Soon Deploy on Web3 Indexing Service The Graph.

• Bernstein: Crypto User Activity Is Moving On-Chain Following FTX's Collapse.

• Russia's Sber bank integrates Metamask into its blockchain platform.

• Demand for liquid Ethereum staking options continues to grow post-Merge.

Deal Flow

• Web3 Content-Delivery Network Fleek Raises $25M.

Yours sincerely,
Treehouse Research 🌳

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