🌳U.S Jobs Growth Slowed More Than Forecast In July; Curve Finance Exploiter Returns Stolen Funds

07 Aug 2023, Monday

3:15 AM

🌳U.S Jobs Growth Slowed More Than Forecast In July; Curve Finance Exploiter Returns Stolen Funds

BTC

ETH

S&P Futures 500

$29,011.50

$1,827.25

$4,512.75

(-0.66%)

 (-0.51%)

(-0.53%)

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. job growth slows in July; China's economic indicators reveal recovery concerns (more in Macro & TradFi)
  • Curve Finance receives stolen funds back; Open Exchange proposes Hodlnaut takeover (more in DeFi & CeFi)
  • Binance shows operational resilience despite facing withdrawal stress over the past months; DWF Labs shifts significant YGG funds to exchanges (more in On-Chain)
  • C-P skew of BTC and ETH moves towards neutrality; Weekly option trading activities show bullish expectations for BTC towards year-end. (more in Crypto Derivatives)
  • BTC traded sideways over the weekend, with potential support at $28.8K, while ETH shows uncertainty in a downward-sloping channel on the 4-hour chart. (more in Crypto Technical Analysis)

Macro & TradFi

US jobs growth in July was below anticipated levels, with 187,000 non-farm positions added versus the expected 200,000, as reported by the Bureau of Labor Statistics. Despite the slower growth, the unemployment rate improved to 3.5%. Yearly hourly earnings growth was at 4.4%, surpassing expectations and monthly wages grew by 0.4%, slightly above the forecasted 0.3%. Key sectors driving job growth included healthcare, financial services, and wholesale trade, while manufacturing saw a minor decline. Notably, inflation control remains a focus for the Federal Reserve, with recent data suggesting progress. While the Fed stated the potential of further rate hikes, market predictions lean towards rate stability for the remainder of the year.

On the other hand, key economic indicators in China revealed a weakening in both manufacturing and services activity, highlighting concerns about the country's stalling economic recovery. This comes as the nation grapples with issues such as rising youth unemployment, deflationary tendencies, and a prolonged downturn in the housing market. Notably, the National Bureau of Statistics reported that its purchasing managers index (PMI) remained in contraction for the fourth consecutive month, and a measure of services activity hit its lowest point for the year. Concurrently, a private metric highlighted a contraction in activities focused on smaller factories. These recent data points indicate that the consumer economic boost post-pandemic observed earlier in the year is diminishing. While Beijing projects a 5% GDP growth in 2023, recent statistics and emerging challenges raise concerns about the sustainability and health of this growth.

On Friday, the Dow Jones Industrial Average was down 0.43%, the S&P 500 was down 0.53%, and the Nasdaq Composite was down 0.36%. Amazon surged by 8.27% after beating estimates and giving a bullish revenue forecast, citing strong cloud and e-commerce sales. Apple dropped by 4.80% after disappointing iPhone sales and a forecast for revenue sluggishness to persist due to an industry-wide smartphone slump.

DeFi & CeFi

  • Curve exploiter returns funds
  • OPNX submits bid to takeover Hodlnaut
  • Crypto hedge funds are being hit by shutdowns
  • Musk announces that he has no intention of launching a crypto token
  • Trader Joe launches on Ethereum
  • Ondo Finance launches tokenized notes secured by U.S. treasury and bank deposit
  • Number of Ethereum futures ETF applications submitted reached 12
  • Polygon Zero claims zkSync copied their source code; zkSync refutes the accusations

Curve Finance has recently gotten a return of the stolen funds from the exploiter, with 4,820 alETH and 2,258 ETH, totaling approximately $12.7 million, being returned. The exploiter then used a transaction to send a message about their motivation for returning the funds."I saw some ridiculous views, so I want to clarify that I'm refunding you not because you can find me, it's because I don't want to ruin your project, maybe it's a lot of money for a lot of people, but not for me, I'm smarter than all of you." This follows Curve Finance's recent exploit of $24 million on July 30, attributed to a Vyper-based smart contract bug. The protocol's founder, Michael Egorov, has engaged in multiple over-the-counter trades to mitigate liquidation risks for his loans using CRV as collaterals.

Open Exchange (OPNX), a cryptocurrency claims trading platform co-founded by Mark Lamb, Sudhu Arumugam, Kyle Davies, and Su Zhu, proposed a takeover bid for the Singaporean crypto lender, Hodlnaut. The offer entails a $30 million capital injection in the form of FLEX tokens, the native token of CoinFLEX exchange, in exchange for a 75% stake in Hodlnaut. This move aims to provide a partial payout to Hodlnaut's creditors and settle claims. Hodlnaut, which faced financial challenges following the Terra-LUNA collapse, is currently under judicial management in Singapore. The acceptance of OPNX's proposal would grant Hodlnaut's creditors either 30% of their claims in FLEX and other tokens or up to 95% of the total available corporate assets, based on the higher value.

On-Chain

According to @jjcmoreno, Binance has seen significant stress in its operations. Notably, since October 2022, the exchange has processed net Stablecoins withdrawals totaling an immense $17.6B. To put this into perspective, this figure is nearly twice the peak reserves ever reported by competitor FTX. However, despite such a massive outflow, Binance retains approximately $6B in its reserves, demonstrating strong operational resilience.

On the other hand, according to @lookonchain, DWF Labs recently transferred 3.65M YGG (Yield Guild Games), valued at approximately $2.1M, to Binance, indicating strong potential dumping pressure on the token. It is important to note that over the past year, DWF has received a cumulative 29.13M YGG, equivalent to $16M, from the Yield Guild Games Treasury, all of which has been subsequently moved to exchanges.

Crypto Derivatives

  • BTC and ETH funding rates continue to stay positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remain unchanged at 34.06% and 34.58%, respectively.
  • 30-day 25-delta skew (C-P) for BTC and ETH rose to 1.87% and -1.87%, respectively.
  • The futures market witnessed $125.44M worth of liquidations since Friday with longs representing 60.77% 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

16.85%

DOGE

Binance

dYdX

11.76%

SOL

Binance

dYdX

7.93%

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 has continued its sideways movement over the weekend, with a slight increase in the 7-day ATM IV, while the 30-day ATM IV has stabilized near the monthly low.

The term structure for BTC remains in contango, with minimal changes in IV across all tenors in the last 24 hours. On the other hand, ETH has experienced a slight IV drop across the curve, likely due to lower trading activities during the weekend.

Both the 7-day and 30-day (C-P) skews for BTC have seen a slight decline over the weekend, moving towards the neutral zone despite a small uptick at the end of the weekend. ETH's skews have been trading relatively sideways with a slight increase, indicating an improving sentiment compared to BTC. However, both 7-day and 30-day (C-P) skews remain in the negative territory, currently sitting at -0.32 and -1.73, respectively.

Over the last week, @tradeparadigm reported significant bullish BTC activity in the options trading market. With trades such as the purchase of 1955x 27-Oct-23 38000 Call, 1375x 29-Dec-23 36000 Call, and 1105x 18-Aug-23 31500 Call, it is clear that traders are expecting substantial BTC gains into the end of the year.

Crypto Technical Analysis

Moving on to technical analysis, BTC has mostly traded sideways over the weekend, showing no clear directional bias on the 4-hour chart. The RSI has also remained around the middle of the range at 50. The closest support level can be identified at the local low of approximately $28.8K. Should that level fail to hold, BTC might decline towards the lower trendline formed by the higher lows on the daily timeframe, establishing support around the $28K level.

In contrast to BTC, ETH's 4-hour chart displays a downward-sloping channel despite the relatively subdued trading activities over the weekend. Currently trading near the middle of the channel, no directional bias can be definitively confirmed. The RSI has also hovered near the middle at 52.35, indicating strong uncertainty in the market regarding the price's near-future direction.

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