🌳 U.S. Job Gains Fall Short Of Expectation; Coinbase Faces New Lawsuit Over Alleged Investor Deception

06 May 2024, Monday

2:47 AM

🌳 U.S. Job Gains Fall Short Of Expectation; Coinbase Faces New Lawsuit Over Alleged Investor Deception

BTC

ETH

S&P Futures 500

$64,267.07

$3,149.36

$5,159.25

(+8.88%)

 (+5.63%)

(+0.99%)

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


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Our Daily View

What We Are Covering Today

  • U.S. labor market experienced smallest job growth in 6 months; BOE Governor has different plans for rate cuts (More in Macro & TradFi)
  • Coinbase faces new lawsuit over alleged investor deception; Vodafone plans to integrate crypto wallets with SIM cards (More in DeFi & CeFi)
  • Bitcoin’s MVRV hovers between 0.9 - 1.0; Toncoin shows the fastest growth in non-empty wallets (More in On-Chain)
  • BTC ATM IV moves sideways; BTC C-P 7-day and 30-day skew looks at converging in Call Premium territory (More in Crypto Derivatives)
  • Both BTC and ETH have been on an upward trajectory since Friday, steadily approaching their respective resistance levels (More in Crypto Technical Analysis)

Macro & TradFi

The U.S. labor market experienced its smallest jobs gain in six months with a rise of only 175,000 payrolls in April, attributed primarily to slowdowns in construction and leisure sectors, while unemployment unexpectedly increased and wage growth slowed to its lowest rate in nearly three years, growing only 3.9% year-over-year. These indicators suggest a cooling in the labor market, aligning with Federal Reserve Chair Jerome Powell's remarks on the necessity of wage moderation to meet inflation targets, amidst other economic data showing a general slowdown that could temper aggressive policy moves in the near term.

Meanwhile, Bank of England (BOE) Governor Andrew Bailey is charting a distinct path from U.S. Federal Reserve Chair Jerome Powell, with indications that the UK might initiate interest rate cuts as early as this summer, in contrast to the more ambiguous signals from the Fed regarding U.S. rate adjustments. As the BOE plans to maintain its rate at a 16-year high, it signals a potential alignment with the European Central Bank's expected June easing, diverging from persistent U.S. inflation pressures. This strategic divergence is highlighted as UK inflation rates have recently fallen below U.S. levels for the first time since 2022, hinting at an easing trajectory more attuned to European economic conditions.

Lastly, Wall Street surged following a weaker-than-expected jobs report on Friday, with the Dow Jones Industrial Average up by 1.18%, the S&P 500 increasing by 1.26%, and the Nasdaq Composite advancing by 1.99%. This uptick was driven by Apple's announcement of a record $110 billion share buyback, boosting its shares by 6%. Conversely, Expedia's shares plummeted by 15.3% after the company revised its revenue growth expectations downward. The trading session saw advancing issues on the NYSE outnumber declining ones by a 3.62-to-1 ratio, and on Nasdaq by a 2.00-to-1 ratio, reflecting broad market optimism. Additionally, the S&P 500 and Nasdaq set new records with 21 and 95 new 52-week highs, respectively, while market volume on U.S. exchanges reached 10.72 billion shares.

CeFi & DeFi

  • Coinbase faces new lawsuit over alleged investor deception
  • Vodafone plans to integrate crypto wallets with SIM cards
  • Uniswap CEO weighs In on ethical token distribution
  • BTC-e founder pleads guilty in $9B money laundering conspiracy

Coinbase faces a new lawsuit filed in the US district court, alleging that Coinbase’s digital asset sales of Solana, Polygon, Near, Decentraland, Algorand, Uniswap, Tezos, and Stellar Lumens tokens contributed to the disregard of state securities laws since the company’s inception. The plaintiffs in this lawsuit requested for the complete rescission of their transactions, compensation for damages as outlined by state securities law, and an injunctive relief to prevent further harm. This case resembles another class-action lawsuit that accuses Coinbase of causing consumer harm by selling unregistered securities. In response, Coinbase has filed an interlocutory appeal to scrutinize the specific doubts and questions raised by the plaintiffs. This ongoing lawsuit represents the high demands of the Digital Asset space concerning compliance and regulation. When overcome, this could set a precedent for a more regulated space for traders and investors.

In other news, Vodafone, a UK-based telecommunications company, is reportedly in talks with lenders to secure $1.8 billion in loans over the next two years. This financing initiative is part of a broader plan to raise $2.9 billion in debt to introduce blockchain technology to smartphone users through integrating cryptocurrency wallets with SIM cards. With an estimated 8 billion smartphone users by 2030 and a prediction of increased adoption in cryptocurrency wallets to 5.6 billion within the same time frame, Vodafone’s plan could potentially increase accessibility to the digital asset space and abstract away the underlying complexity behind cryptography for users.

On-Chain

Glassnode provided Bitcoin MVRV data which indicates a stable positioning of the MVRV (1w-1m) ratio within the 0.9 to 1.0 range, suggesting that the market has not significantly deviated from the recent cost basis of short-term Bitcoin investors. This stabilization within the typical correction range indicates a balancing market where prices are neither severely overvalued nor undervalued relative to the recent purchasing prices of these investors. This phase of market equilibrium might influence investor strategies, focusing on potential stability rather than high volatility in price movements.

Elsewhere, Santiment’s on-chain data reveals a significant milestone in the growth of Bitcoin’s network, marking an all-time high of 53.85 million non-empty wallets, indicating a robust and broadening base of holders. While Bitcoin continues to maintain the highest number of holders among top cryptocurrencies, the notable growth trajectory of Toncoin's network stands out as the fastest among its peers. As illustrated in the chart, this rapid increase in Toncoin's user base suggests a growing interest and possibly an expanding adoption of the Toncoin network.

Crypto Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 58.9% and 68.65%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH increased to 1.81% and -3.38%, respectively.
  • The futures market witnessed $341.583M in liquidations since Friday, with shorts representing 66.80% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

49.61%

DOGE

OKX

dYdX

46.54%

DOGE

Binance

dYdX

37.24%

BTC

OKX

dYdX

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.


After experiencing a downward trajectory over the past week, the current ATM implied volatility (IV) has eased off and is moving sideways. Presently, both the 7-day and 30-day IVs are moving in tandem and close to converging at 55.25% and 56.41% respectively.

BTC's term structure signals an increase in marked IVs for short-term tenures of up to 2 days, with marked IVs decreasing across the curve for longer-termed tenures. A decrease in marked IVs across longer-termed tenures could potentially indicate that BTC market participants are doubtful of the price of BTC’s direction.

Meanwhile, BTC witnessed an increase in the 7-day C-P skew to 1.96, but a decrease in 30-day skews to 1.81, with both skews looking to converge in the short term. This suggests that BTC remains within call premium territory with a bullish market sentiment over the tenures of up to 30 days.

Lastly, @Paradigm reported many market participants purchasing OTM calls across different maturities. Notable BTC trades include the sale of 800x 31-May-24  51K Call and a 600x +1.00 27-Sep-24 60K/ -2.00 27 Sep 24 90K Call custom bought. On the ETH side, we have seen the purchases of 18575x 17-May-24 3K/24-May-24 3K and 13575x 17-May-24 3.3K/24-May-24 3.4K Call Calendar bought.

Crypto Technical Analysis

In Technical Analysis, BTC has sustained its upward momentum over the weekend, building on Friday's significant price surge. Consequently, the price has decisively surpassed the $60K resistance, now acting as support, and is rapidly approaching the next resistance level at $67K. Meanwhile, $60K remains a crucial support level in case of a bearish reversal. Despite the recent bullish movements, the RSI still lingers slightly below the overbought threshold, suggesting a possibility of further upward momentum before a potential correction to the downside.

On the other hand, ETH has demonstrated a similar price pattern over the weekend. Notably, ETH appears to have established a horizontal parallel channel, within which the price has been oscillating since early April. Presently, the price is trending towards the upper boundary of this channel, which acts as the next resistance level at around $3.27K. If the current momentum persists beyond this level, the subsequent resistance is expected in the range of $3.64K to $3.7K, suggesting a potential upside of 12% from the immediate resistance. Conversely, if the momentum reverses, the channel's lower boundary will remain a key support zone, at approximately $2.97K.

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