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Our Daily View
What We Are Covering Today
- US housing market struggles; China acts to support its real estate sector (More in Macro & TradFi)
- Changpeng ‘CZ’ Zhao resigns as Binance CEO, Binance to pay $4.3B to settle U.S. criminal case; Tether deposits of $1B with UK financial firm at center of high court battle (More in DeFi & CeFi)
- ETH wallet currently holds a combined 62.76M ETH worth $124.1B; Chainlink supply held by top 200 shows accumulation (More in On-Chain)
- BTC's term structure remains in contango; options market shows increased hedging activity (More in Crypto Derivatives)
- Bitcoin braces for potential slide amidst triple top pattern and RSI decline; Ethereum encounters resistance, bearish doji points to possible retest of $1.84K support (More in Crypto Technical Analysis)
Macro & TradFi
Existing home sales in the U.S. hit a 13-year low in October, primarily due to soaring mortgage rates and a limited housing supply, causing a significant market downturn. This decline was accompanied by a 3.4% year-on-year increase in median house prices, reaching $391.8K. The data, reported by the National Association of Realtors, indicates a potential for 2023 to mark the weakest year for home resales since 1992. Factors such as high prices, elevated mortgage rates, and homeowners' reluctance to sell due to previously secured low rates contribute to the market freeze. This slowdown in the housing market is a direct consequence of the Federal Reserve's rigorous monetary policies, aimed at addressing broader economic challenges. The situation is further complicated by a substantial supply shortage, especially in the more affordable housing segments, exacerbating the imbalance between supply and demand.
Elsewhere, to stabilize the embattled property sector, Chinese authorities have taken steps to ease financing concerns by drafting a list of 50 real estate firms that would be eligible for various forms of financing. This move has boosted investor confidence, sending Chinese developers' bonds and shares soaring. While the white list for financing is intended to alleviate fears of further contagion, analysts remain cautious about its ability to halt the industry's prolonged slump. Meanwhile, China's largest banks, brokerages, and distressed asset managers have been instructed to meet all "reasonable" funding needs from property firms. Despite these measures, some investors remain skeptical about the effectiveness of these actions in reversing the sector's downward trajectory.
On a more muted trading day, the Nasdaq Composite, DJIA, and S&P 500 fell 0.59%, 0.18%, and 0.20%, respectively. This marks the end of a winning streak for equities as investors react to the minutes from the latest Fed meeting, which marked that monetary policy may remain “restrictive” if inflation doesn’t continue to fall. The Nikkei 225 and Hang Seng also fell 0.10% and 0.25% respectively. US markets will be closed on Thursday for the Thanksgiving Holidays.
DeFi & CeFi
- Changpeng ‘CZ’ Zhao resigns as Binance CEO, Binance to pay $4.3B to settle U.S. criminal case
- Tether deposits of $1B with UK financial firm at center of high court battle
- Uranium-linked token launches on Uniswap
- Wintermute Asia processes its first options block trade through CME Group
- Tether worth $9M tied to ‘pig butchering’ scams is seized by U.S. DOJ
- Crypto miner Phoenix Group says UAE initial share sale was 33-times oversubscribed
- New Ethereum Layer 2 Blast attracts $30M hours after bridge goes live
- Celsius to transition to mining-only NewCo
Binance, the world's largest cryptocurrency exchange, was criminally charged and agreed to a staggering $4.3B settlement, one of the largest penalties from a corporate defendant in U.S. history. Founder Changpeng "CZ" Zhao pleaded guilty to personal charges, agreeing to a $50M fine and replacement by Richard Teng as CEO. The charges involved Binance's failure to uphold anti-money laundering standards, running an unlicensed money-transmitting business, and violating sanctions laws. The settlement included penalties from multiple agencies, an independent compliance monitor for three years, barring Zhao from Binance, and Binance’s complete exit from the U.S. Court filings revealed Zhao's prioritization of growth over compliance, neglecting U.S. banking regulations and knowingly avoiding "know-your-customer" protocols, leading Binance into the "Grey zone" of U.S. law. Zhao is released on a $175M bond and will be sentenced in February, no prison time is mentioned.
In other news, Tether, recently deposited over $1 billion with Britannia Financial Group, a company founded by Tory donor Julio Herrera Velutini, sparking a complex High Court legal battle. This deposit offers insight into Tether's secretive banking relationships and its $87B asset management, with the company's claim that each stablecoin is dollar-backed central to its promise of liquidity and safety. However, this arrangement is complicated by Britannia Financial's founder facing U.S. bribery charges and Tether's own history of regulatory scrutiny, including allegations of misleading statements about its reserves by the Commodity Futures Trading Commission and a settlement with the New York attorney-general for concealing losses. The case highlights Tether's influence in crypto markets and raises questions about the stability and transparency of digital currency reserves in the burgeoning crypto regulatory landscape.
Recent data from @santiment reveals a surge in Ethereum's buying activity, signaling a robust bullish momentum for the asset. As of the latest metrics, the 200 largest Ethereum wallets collectively hold 62.76M ETH, which translates to an estimated value of around $124.1B—a 30.3% increase since November 21, 2022. Additionally, there has been a creation of 94.7K new ETH wallets within a single day, marking the most significant daily increase since July. This uptick in wallet creation, along with the substantial accumulation by top holders suggests a strengthening confidence in Ethereum's long-term prospects.
In another analysis by @Santiment, the behavior of Chainlink's top holders tells a compelling story of conviction. Even as LINK's price soared from below $7.40 to approximately $14.60 following October 17th, the 200 largest wallets not only added a substantial 40.18M LINK to their holdings but also maintained a significant portion of the total supply. This is exemplified by the largest wallet, which holds $569M worth of LINK, equating to 3.8% of all circulating tokens. This indicates that despite the 125% price surge, there wasn't a proportional sell-off by these top addresses, suggesting their continued belief in Chainlink's value and potential for further growth, even after the price increase.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC and ETH dipped slightly to 55.06% and 54.31%, respectively.
- The 30-day 25-delta skew (C-P) for BTC and ETH fell to 5.24% and 4.34%, respectively.
- The futures market witnessed $231.38M liquidations since Friday, with longs representing 81.96% of the total.
Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities
Net Annualized APR
Perp (USDT pair)
Source: @CexyArbBot Telegram Bot
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 last 24 hours, both BTC's 7-day and 30-day implied volatilities have remained relatively unchanged at 46.80% and 50.81% respectively, further solidifying the market's expectation of stability in BTC's short-term future.
Meanwhile, BTC's term structure has continued to be in contango. However, IV has dipped across all tenors beyond 1 day expiries. This trend may be attributed to the recent lawsuit involving Binance. The uncertainty surrounding this legal issue was somewhat mitigated following the publication of an article by Changpeng Zhao, announcing his resignation as CEO of Binance. He confirmed that Richard Teng will be assuming the role of CEO. This leadership transition appears to have contributed to increased market certainty.
In the past 24 hours, the market has observed a substantial alteration in the 25-delta call-put skew. Notably, the 7-day skew has decreased markedly, from 7.70% to 0.81%. This pattern suggests a growing propensity among options traders to implement hedging strategies in their portfolios. Similarly, the 30-day skew has also diminished, settling at 5.31%. Overall, this suggests tempered short-term market expectations, yet a more optimistic outlook prevails, especially with the anticipation of decisions on numerous BTC ETF Approvals slated for January.
Yesterday, during @Paradigm's Asia / Europe Session Hours, a review of option flows this week underscored a notable inclination towards bullish sentiments for BTC and protective strategies for ETH. Noteworthy BTC transactions included the acquisition of 345x 29-Mar-24 40K Calls and a notable divestment of 225x 29-Dec-23 40K Calls. In contrast, ETH strategies were characterized by a significant purchase of 1000x 24-Nov-23 2050/2150 Call Spreads, coupled with the sale of an equivalent size in 29-Dec-23 2200/2400 Call Spreads, indicating a hedged stance with defined risk parameters.
Crypto Technical Analysis
Transitioning to BTC technical analysis, the current market conditions on the 4-hour chart suggest a dampened outlook. Despite the presence of a bullish ascending wedge pattern which traditionally signals upward potential, the RSI has retreated significantly to 38.93 from yesterday's 59.68, and the price action has broken down the 50 SMA and 100 SMA, which may indicate increasing bearish momentum. This is further substantiated by the formation of a triple-top pattern. Currently, BTC is testing the resilience of the lower orange trend-line, which remains aligned with the overarching upward blue trend line. Although the market sentiment leans towards bearish with the possibility of testing the 200 SMA, the RSI nearing oversold territory could suggest a potential price correction towards the upside. If the bullish wedge's upper boundary withstands, there's a chance for a 5% to 10% rise towards the next resistance zone at $38K to $40K. However, should the wedge break to the downside, BTC may see a decline of about -13% to -15%, potentially reaching the $30K to $31K support levels. In summary, while bearish patterns are emerging, the reaction at the 200 SMA and the oversold RSI could provide a crucial turning point for Bitcoin's immediate price movement.
Moving on to ETH technical analysis, bearish signals are observed on the 4-hour chart. ETH, after approaching the intersection of the blue and orange upper trend lines, has faced a rejection marked by a bearish doji candlestick, suggesting a reversal from the recent uptrend. This price action aligns with a decrease in the RSI to 43.60, down from yesterday's 59.69, further underscoring the mounting downward pressure. Although ETH was previously held above the 50MA, the rejection at the key trend lines, combined with the dip below the 50 SMA and 100 SMA, suggests that the market could be bracing for a potential downturn. Should this bearish case play out, we may see ETH's price retract towards the $1.84K to $1.86K support zone, a past resistance level.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳