🌳U.S. Bond Market Hits 9-Month High for Long-Term Yields; Hashkey Exchange Becomes First Licensed Retail Crypto Platform In Hong Kong

04 Aug 2023, Friday

2:47 AM

🌳U.S. Bond Market Hits 9-Month High for Long-Term Yields; Hashkey Exchange Becomes First Licensed Retail Crypto Platform In Hong Kong

BTC

ETH

S&P Futures 500

$29,204.25

$1,836.73

$4,538.50

(+0.18%)

 (-0.04%)

(-0.09%)

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

GM Treehouser 🌳

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July 2023 Market Recap

Our Daily View

What We Are Covering Today

  • U.S. bond market faces disruption; new restrictions on investments in China urged (more in Macro & TradFi)
  • HashKey Exchange upgraded Hong Kong license, becoming the first retail crypto exchange; Binance encounters a "zero-transfer” scam, but funds are SAFU. (more in DeFi & CeFi)
  • Uniswap's Ethereum volume falls; Onchain sleuth probes BALD connections (more in On-Chain)
  • BTC Options IV remains flat, with Call skews ticking upward amidst notable buying activity (more in Crypto Derivatives)
  • BTC, ETH are little changed on the day, but the weekly chart indicates possible bullish moves (more in Crypto Technical Analysis)

Macro & TradFi

Long-term yields reached a 9-month peak, with 10-year yields and 30-year yields increasing by nearly 15 basis points after the latest economic data. This has positioned longer-dated Treasuries on track for their most challenging week of 2023. On the economic front, U.S. nonfarm productivity recorded its largest annual increase in nearly three years, rising 3.7%, which may help to mitigate escalating labor expenses. Meanwhile, weekly jobless claims aligned with expectations, slightly rising to 227,000. Additionally, the ISM Non-Manufacturing PMI for July declined more than anticipated, dropping to 52.7 from 53.9.

Mike Gallagher, chair of the U.S. House China committee, has urged President Joe Biden to expand restrictions on investments in China to include public markets such as stocks and bonds. In an August 3 letter, Gallagher emphasized that public market investments comprise the majority of U.S. capital flows to China and that any rules exempting them would fail to address significant national security concerns. The expected executive order from the White House is designed to limit U.S. capital flow to groups connected to China's military, following efforts to restrict Chinese access to U.S. technology. Critics and U.S. allies have raised concerns about the proposed order's impact, while Gallagher emphasized the need for investor predictability and parallel restrictions from international partners.

The Dow Jones Industrial Average was down 0.19%, the S&P 500 down -0.25%, and the Nasdaq Composite was down 0.10%. This is the third straight decline for both the S&P500 and Nasdaq. In other news, Qualcomm plunged 8.18% following a weak forecast for the current period attributed to a smartphone slump, while Apple fell 2.05% due to disappointing iPhone sales and a forecast for continued revenue sluggishness stemming from an industry-wide smartphone decline.

DeFi & CeFi

  • Trader Joe launches on-chain limit orders
  • Space and Time launches the proof-of-SQL product
  • HashKey becomes the first licensed retail-facing crypto exchange in Hong Kong
  • Web3 NFT creator platform Nifty will cease operation
  • Binance almost fell victim to a “zero-transfer” address scam
  • Sui launched liquid staking functionality
  • Direxion files for BTC and ETH futures ETF with SEC

Hong Kong-based virtual asset exchange, HashKey Exchange, has officially upgraded its Type 1 and Type 7 licenses, becoming the first licensed trading platform in Hong Kong to offer retail services. The upgrade allows the exchange to expand its services to retail users, meeting the demand for a licensed platform offering safer and simpler cryptocurrency buying and storing processes. HashKey Exchange emphasizes safety, with user funds kept in segregated accounts and strict adherence to regulatory requirements. The platform also offers compliant off-platform trading (OPT) services in the Asia-Pacific region. Additionally, HashKey Exchange has launched HashKey Brokerage, providing compliant OPT services for high liquidity bulk trading. The platform has been actively expanding its team and is currently open for pre-registration, offering rewards to registered users.

In recent developments, Binance fell victim to a $20M USDT transfer scam. Scammers cleverly employed addresses that shared the same initial and final four characters, sending "dust" transactions to targets, and making these visible in their transaction history. As a result, wallet operators might inadvertently select the scammer's address when making transfers. It's noted that many individuals only verify the beginning and end characters of an address during transfers, and some wallets even use "..." to abbreviate the central portion and improve the user interface. After such an unintentional transfer took place, Binance's founder, Zhao Changpeng, immediately announced the issue and froze the misdirected USDT. Zhao has committed to undertaking all necessary actions, including police reporting, to ensure the funds' recovery.

On-Chain

Based on insights from @Glassnode, Uniswap's current weekly trading volume on Ethereum stands at $5.57B, a figure notably lower than in previous years. Distinct trends emerged, such as a volume spike tied to heightened interest in Liquid Staking Tokens in early 2023 and a temporary surge in 'meme-token' activity that has since waned. Despite recent market developments, like the buzz around BTC ETF filings and the Ripple vs. SEC verdict, Uniswap hasn't experienced a significant boost in trading activity. Such findings warrant a deeper analysis of the prevailing market dynamics and trading patterns in the decentralized finance realm.

On-chain detective @ZachXBT may have unearthed a connection to the BALD token's rug pull. The trail harks back to a 2021 event when Twitter's @MikeMcDonald89 celebrated a $50,000 win from a bet on the chess world championship. This payment was processed via an Ethereum transaction tied to an entity dubbed the "BALD deployer." Delving deeper, ZachXBT reached out to Mike McDonald and traced the origins to another Twitter user, @milkyway16eth. While concrete connections remain elusive, significant fund transfers between the BALD Deployer and @milkyway16eth’s wallets have been spotlighted. In the wake of these public revelations, @milkyway16eth has since made his account private, fueling further intrigue that merits additional scrutiny.

Crypto Derivatives

  • BTC and ETH funding rates continue to stay positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remain unchanged at 36.46% and 36.43%, respectively.
  • 30-day 25-delta skew (C-P) for BTC and ETH rose to 1.87% and -1.36%, respectively.
  • The futures market witnessed $46.62M worth of liquidations yesterday with longs representing 73.40% of the total.

Top 3 USDT perp funding rate arbitrage based on the last 24-hour lookback:

Net Annualized APR

Perp (USDT pair)

Long on

Short On

23.71%

BNB

Bybit

Binance

20.63%

ETH

Bybit

dYdX

16.77%

BTC

OKX

dYdX

Source: @CexyArbBot Telegram

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps 

2) CEX observed include Binance, Bybit, OKX & DYDX

@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo

BTC continues its sideways movement. The 30-day ATM IV, which had been on a decline throughout July, has now stabilized, remaining relatively flat since the beginning of August.

The term structure remains in a contango formation. IV across all tenors has seen minimal changes over the last 24 hours.

The 30-day (C-P) skews for both BTC and ETH added bullish bias yesterday. While ETH skew continues to reflect a predominantly negative sentiment, the crypto market has largely shrugged off global macro events. Notably, the sector appeared unfazed by Fitch's U.S. long-term rating downgrade and disruptions in the DeFi landscape.

Bullish BTC activity was observed on @tradeparadigm, with BTC's mid-dated call skews trending upwards, reverting to a positive position. This trend is supported by the overnight purchase of 1,300 Dec $36K Calls. Skew spreads have expanded; Sep 25-day Calls are trading at 3% over puts, while the Dec 25-day Calls are trading at 4% over puts. Notable BTC positions on Paradigm include the purchase of 708 contracts of the 18-Aug-23 $31.5K Calls and 680 contracts of the 29-Sep-23 $32K Calls. For ETH, notable trades on Paradigm were marked by the sale of 10,000 27-Oct-23 $1.5K / 28-Jun-24 $1.2K Put Calendars and 5,000 29-Dec-23 $1.7K Puts.

Crypto Technical Analysis

Yesterday, BTC exhibited no clear directional bias, as it made a slight upward move and continued to consolidate within a range-bound pattern. Based on our previous forecast, a surge in bullish momentum might lead to a breakout above the upper boundary of the trading channel around the $29.5K level, with potential further gains towards $30.1K. Conversely, a downside break could result in the price dropping below the crucial support at $28.8K, which marks both the lower boundary of the trading range and the bottom of the weekly channel. While the weekly chart indicates a gradual upward trend in the channel, we should be prepared for short-term downside movement since the price is currently trading near the lower leg of the channel.

Similarly, ETH exhibited minimal movement, gradually approaching the lower boundary of the trading channel and the overall range. If the downside momentum persists, we might witness a price break below the trading range support at $1.82K, whereas a significant upward surge could lead to a breach of the $1.9K level. Observing the weekly chart, we notice the formation of an ascending triangle pattern, suggesting that a strong bullish momentum may trigger a substantial breakout above the $2K price level.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

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Treehouse Research 🌳