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Our Daily View
What We Are Covering Today
- US economy grows robustly at 4.9%; ECB holds interest rate amid eurozone concerns (More in Macro & TradFi)
- Matrixport announced that we are officially in the 5th BTC bull market cycle; Justin Sun Group reports $98M of Q3 profits (More in DeFi & CeFi)
- FTX/Alameda strategically sells major assets; a new wallet's trades and withdrawals on #Binance hint at a bullish market outlook (More in On-Chain)
- BTC IV and skew experienced a slight pullback as the market quiets down from the recent pump (More in Crypto Derivatives)
- BTC forms a bullish pennant on the 4-hour chart; ETH shows a double top at $1.82k-$1.84k range (More in Crypto Technical Analysis)
Macro & TradFi
In Q3 2023, the US economy exhibited robust growth, expanding at 4.9%, surpassing expectations and marking the fastest pace in nearly two years. This surge, driven predominantly by vigorous consumer spending, reflected a significant jump from the 2.1% growth in Q2. Notably, while business inventory contributions are anticipated to regress in Q4, consumer resilience remains bolstered by rising wages and a decelerating inflation rate. As the Federal Reserve contemplates interest rate decisions, the resilient GDP underscores the enduring strength of the economy, even amidst some sectors grappling with the repercussions of increasing interest rates.
Elsewhere, The European Central Bank (ECB) maintained its key interest rate at 4%, terminating a sequence of ten successive borrowing cost hikes, amidst growing apprehensions over the eurozone's economic expansion. This decision followed indications of a waning eurozone economy and a significant reduction in inflation. While ECB President Christine Lagarde didn't dismiss future rate hikes, she emphasized the dampening effects of previous increases on economic activity. Simultaneously, eurozone inflation has descended from its zenith of 10.6% to 4.3%, and forthcoming data could potentially approach 3%. Financial markets exhibited a subdued reaction, with negligible shifts in stocks and bond yields.
U.S. stock indices retreated yesterday, with the S&P 500 plunging to its lowest level since May, reflecting a nearly 10% drop from its July pinnacle. The Dow Jones, NASDAQ, and S&P 500 declined by 0.76%, 1.89%, and 1.18%, respectively. Meta's shares sank by 3.73%, as their robust quarterly earnings were overshadowed by cautionary statements about macroeconomic uncertainties impacting their advertising segment. In contrast, IBM surged by 4.87%, surpassing expectations on the back of robust software demand, while Amazon appreciated by 5.11% after its Q3 earnings outperformed projections, driven by solid growth in its retail and cloud computing segments. Market participants are now awaiting the release of the Core PCE Price Index, slated for 20:30 SGT tonight.
DeFi & CeFi
- Matrixport announced the fifth Bitcoin Bull run officially started on Jun 22 2023
- Horizen Launches EVM-Compatible 'EON' Sidechain
- Arbitrum Foundation Says 'Orbit' for Layer-3 Networks Now Ready for Mainnet.
- Pepecoin Doubles to $500M Market Cap as Memecoin Fever Steals Bitcoin's ETF Thunder.
- HTX's Justin Sun claims record profits despite staff cuts
- Circle Joins Forces with BitoGroup and Taiwan FamilyMart to Launch Enhanced ‘Points-to-Crypto’ Service
According to a recent analysis by Matrixport, Bitcoin has witnessed five distinct bull market cycles, each driven by unique narratives. The fifth and current cycle, initiated on June 22, 2023, is largely fueled by expectations of institutional adoption. Bitcoin's traditional associations with assets like Gold and safe-haven investments have made it an attractive diversification option for institutions, particularly as the United States' debt-to-GDP ratio reaches unsustainable levels. Historical data indicates that when Bitcoin reaches a new one-year high, it typically delivers average returns of +310%. Given this signal, it's estimated that Bitcoin could reach $125,000 by December 2024, with the optimal entry point identified as 14-16 months before the next halving event, suggesting October 2022 was an ideal entry time when Bitcoin was at $17,000, and further gains are anticipated.
Meanwhile, the Justin Sun Group (Including TRON, HTX, Poloniex, and TUSD) associated with Chinese blockchain personality Justin Sun, reported a Q3 2023 profit of $98 million. The company generated $202 million in revenues during the quarter, offset by $104 million in expenses. For Q4 2023, Sun projects revenue of $190 million and expenditure of $88 million, aiming for an estimated profit of $104 million. Despite a challenging Q3 attributed to the U.S. Federal Reserve's high-interest rates, Sun expects a crypto market recovery in Q4 and Q1 of the following year. However, despite Junstin Sun’s positive outlook, HTX had previously reduced its staff from 2,500 to 900 and faced internal issues due to falling revenues, raising concerns over the financial stability of the firm.
@Lookonchain has noted a significant sale of $RNDR and $COMP tokens by FTX/Alameda, totaling $13.5 million. It's important to highlight that they maintain a substantial crypto reserve, estimated at around $3.4 billion. Notably, FTX follows a structured selling strategy, commencing at $50 million and later increasing to $100 million. However, it's worth mentioning that when the FTX estate intend to sell BTC and ETH, they are required to provide advance notice to specific committees and the U.S. trustee at least 10 days before the sale. This strategic approach suggests that they are making deliberate moves, possibly in anticipation of favorable market shifts. Their method of selling without causing abrupt asset dumps is a positive signal, reflecting a cautious approach that can contribute to market stability.
On another note, @lookonchain also highlighted a new wallet on Binance that has executed substantial trades, significantly impacting the prices of $LQTY and $FTT within a short span. Notably, the wallet's withdrawal of 92,610 $TRB, valued at $10.6 million. Such withdrawals often indicate a bullish sentiment, suggesting a potential strategy towards long-term holdings which acts as a positive sign with high confidence in the potential of these assets.
- Funding rates remained positive for BTC and ETH.
- Deribit Implied Volatility Index (DVOL) for BTC experienced a slight pullback to 54.19% while that of ETH remained flat at 49.91%.
- 30-day 25-delta skew (C-P) for BTC dropped to 4.13% while ETH rose to 6.24%.
- The futures market witnessed $130.31M worth of liquidations since Friday, with shorts representing 53.27% 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.
Over the past 24 hours, BTC's implied volatility (IV) has continued to decline from its recent peak, with the 7-day IV reaching 49.05%, reflecting BTC's ongoing sideways movements.
Meanwhile, the term structures for both BTC and ETH have predominantly remained in a contango state. Notably, contracts with 1-day expiries exhibit significantly higher volatilities than other short-term contracts, likely due to expectations of increased market volatility resulting from the upcoming release of the US PCE index. Apart from these, shorter-term expiries have generally seen lower IVs as the market has calmed down following recent price increases, while the IVs for longer-dated contracts have remained relatively stable.
Both the 7-day and 30-day 25-delta (call-put) skews have retraced. In particular, BTC's 7-day skew, which reflects short-term trader expectations, has dropped significantly to 2.06%, nearing the neutrality zone. This suggests that traders may anticipate a potential retracement from the recent price surges and have consequently adopted more protective positions.
Lastly, during yesterday’s Asia/Europe trading hours, @Paradigm reported that trading flows were concentrated on ETH as its volatility surpassed that of BTC. Noteworthy trades continued to focus on December expiries, including the purchase of a short 10,000x 24-NOV-23 1650 ETH Put / long 29-DEC-23 ETH 2100 ETH Call custom strategy and the sale of 8,000x 29-Dec-23 1400/2200 Bull Risk Reversal.
Crypto Technical Analysis
On the 4-hour chart, BTC's momentum is robust as it approaches a crucial resistance zone spanning from $38k to $40k. This strength is evident through the clearly defined upward trend line. Moreover, a bullish pennant pattern, widely recognized as a continuation signal, is in play. If this pattern resolves upwards, we could anticipate a potential increase ranging from 5% to 11%. In the event that the bullish pennant fails to materialize, there's a possibility of a retracement towards the $32k area, which would entail a potential decline of roughly 2% to 3%, aligning with the trend line. These indicators underscore the dynamic nature of the prevailing market conditions.
Conversely, examining the 4-hourly chart for ETH reveals a shift in momentum. Initially displaying a bullish scenario, it has now transitioned towards a more bearish outlook. ETH was on an upward trajectory but encountered formidable resistance within the range of $1.82k to $1.84k, forming a distinct double-top pattern and accompanied by two bearish engulfing candles. Presently, it is consolidating between $1.84k and $1.76k. If the double top pattern confirms and breaches this range, we might anticipate a decline of around 5% to 8%. Nevertheless, given the persistence of bullish undertones, maintaining support at $1.76k could pave the way for another attempt to challenge the $1.82k resistance. These intricacies underscore the ever-evolving nature of the current market conditions.
Access institutional-grade commentary on TradFi × Crypto markets
By Treehouse Research
Treehouse Research 🌳