🌳U.S. Jobless Claims Fell to the Lowest Level Since Last February; Southeast Asia Super-App Grab Adds Support for Web3 Services

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• U.S. jobless claims fell to the lowest level since last February; China plans to broaden iPhone bans in state firms and agencies (more in Macro & TradFi)
• Southeast Asia super-app Grab adds support for Web3 services; Former FTX executive Ryan Salame pleads guilty in FTX case (more in DeFi & CeFi)
• Chainlink sees robust accumulation; an adept ETH investor strategically navigates price fluctuations (more in On-Chain)
• BTC (C-P) skew surges as it sees renewed interest in upside buying (more in Crypto Derivatives)
• BTC displays descending channel; ETH maintains descending triangle (Crypto Technical Analysis)

Macro & TradFi

The latest Labor Department data reveals an encouraging trend for the U.S. job market, with initial jobless claims declining unexpectedly to 216,000 for the week ending 02/Sep/23, marking its lowest since February and its fourth consecutive weekly drop. Contrary to Reuters' poll anticipating a rise to 234,000, this data underscores a resilient job landscape. Moreover, continuous claims saw a dip of 40,000 to 1.679 million by Aug. 26, maintaining historically low levels. Despite recent revisions indicating a softer employment landscape and a slight uptick in the unemployment rate to 3.8%, labor force participation surged, hinting at the job market's stability. In parallel, Q2 worker productivity increased at a 3.5% annualized rate, albeit slightly below the initial estimate, highlighting the most significant gain since Q3 2020. This productivity rise is essential as the Federal Reserve scrutinizes labor costs to align inflation with its 2% target. These findings provide a more optimistic outlook on the U.S. labor market's resilience.

Elsewhere, China intends to broaden its restriction on using iPhones within sensitive government departments to encompass government-affiliated entities and state-owned corporations. This development underscores the mounting difficulties for Apple Inc. in its largest foreign market and primary global production hub. This news resulted in a significant decline in Apple's stock, marking its worst two-day drop in a month, falling by 2.9% on Thursday. Apple suppliers like Qualcomm Inc. and Skyworks Solutions Inc. experienced declines of over 7%, while companies such as Microsoft Corp. and Nvidia Corp. continued to face market pressure.

Lastly, U.S. equities extended their three-day decline as tech-heavy stocks weighed, primarily driven by concerns surrounding iPhone sales in China. The DJIA rose 0.17%, to 34,500.73, the S&P 500 lost 0.32%, to 4,451.14 and the NASDAQ dropped 0.89%, to 13,748.83. Notably, defensive utility stocks continued their winning streak, posting a 1.3% gain on Thursday, reflecting the market's current risk-averse sentiment. US-listed Chinese equities were not sparred, with well-known companies like Alibaba and PDD experiencing declines in their share prices. Additionally, oil prices are poised for a weekly gain following an extension of supply cuts by OPEC+ leaders. WTI oil reached a year-to-date high of $87.54 per barrel on Wednesday before retracting slightly to $86.67 per barrel.

DeFi & CeFi

• Southeast Asian super-app Grab adds support for Web3 services
• Former FTX executive Ryan Salame pleads guilty in FTX case
• $41M Stake hack carried out by North Korea’s Lazarus Group
• Aave, Circle, Base become founding members of Tokenized Asset Coalition
• JPMorgan exploring blockchain-based payment and settlement system
• CFTC goes after Opyn and DeFi operations in enforcement sweep
• Pantera Capital Leads $16.5M Investment in ZK-Powered DEX Brine Fi at $100M Valuation

In Southeast Asia, popular ride-hailing app Grab has integrated Web3 services into its platform. These Web3 services will likely be initially available in Singapore, where users will automatically receive digital collectibles in their Grab Web3 wallet. Grab has partnered with the Monetary Authority of Singapore to similarly offer NFT vouchers for dining and activities in the city. In June this year, Grab participated in a pilot study with the Monetary Authority of Singapore on digital assets, including central bank digital currencies, tokenized bank deposits, and stablecoins. They also tested an escrow system for a digital asset-based payment method called Purpose Bound Money. Grab's integration of Web3 services and its collaboration with the Monetary Authority of Singapore signify a growing institutional acceptance and mainstreaming of digital assets in Southeast Asia.

In other news, former FTX executive Ryan Salame has pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange. Salame has confessed to participating in unlawful political contributions and running an unlicensed money-transmitting business. He acknowledged that he had donated over $24M in his own name to right-wing political candidates during the 2022 midterm elections. These contributions were funded by transfers from a subsidiary of Alameda, a trading company linked to FTX. Prosecutors have alleged that these donations constituted campaign finance violations and have also vowed to demonstrate, during the trial, that Bankman-Fried attempted to illicitly wield political influence in Washington. As part of his plea agreement, Salame has agreed to forfeit assets valued at around $1.55 billion. His charges come with a maximum prison sentence of 10 years, and his sentencing is scheduled for March.

On-Chain

According to @Glassnode, Chainlink's influential investor bracket, comprising holders of 10K-100K LINK, has exhibited robust accumulation tendencies. Currently, 3,127 wallets fall into this category, marking the most substantial count since December 3, 2022. Within three days, these entities have augmented their portfolios by an impressive $9.6M in LINK. This concentrated acquisition underscores confidence in LINK's prospects among sizable stakeholders, suggesting a potentially favorable outlook for the asset's near-term trajectory.

Elsewhere, an analysis by @lookonchain showed that a notable investor recently withdrew an additional 6,127 ETH (valued at $10M) from Binance, culminating in a total withdrawal of 19,194 ETH ($33.74M) since May 11, at an average price of $1,758 per ETH. Notably, 11,300 of those ETH ($20.34M) have been staked. Demonstrating astute market timing, this investor had previously withdrawn 1,191 ETH at $1,425 on March 11 and strategically redeposited them on Binance on April 15 when the price peaked at $2,100, realizing a profit of approximately $800K. This series of transactions emphasizes the investor's adept navigation of market dynamics, suggesting they possess advanced insights that enable them to capitalize on price fluctuations effectively.

Crypto Derivatives

• Funding rate flipped to negative on BTC while it remains positive on ETH.
• Deribit Implied Volatility Index (DVOL) for BTC steadied at 39.76%, while it fell to 37.73% for ETH.
• 30-day 25-delta skew (C-P) rose sharply on both BTC and ETH to -1.95% and -2.64%, respectively.
• The futures market witnessed $57.82M worth of liquidations in the last 24 hours, with shorts representing 72.70% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

BTC experienced a temporary surge in its 7-day implied volatility, peaking at 32.50% during the U.S. trading session as spot prices rallied. However, it subsequently eased back to 30.29%. The 7-day implied volatility for BTC has consistently held above 30% handle. Meanwhile, the 30-day implied volatility has been on an upward trend since the start of September, signaling increased market volatility as whipsaw trading remains intact.

Looking at the term structure of BTC, implied volatility increased marginally in the near term while showing a slight reduction in longer-term volatility. In general, the structure continues to exhibit a contango shape, with no notable alterations.

Elsewhere, the 30-day (call-put) skew on BTC rose sharply, rising from its weekly low of -5.93% to -2.19%, This change can be partly attributed to the rally in spot prices on Thursday and renewed interest in upside buying activity. Nevertheless, put skew on BTC remains the steepest since the regional banking crisis in March this year.

Lastly, @Paradigm has noted bullish interest in upside buying in the form of outright call purchases and risk reversals. Noteworthy trades involve 1,156x 27-Oct-23 $30K call and 1,043x 27-Oct-23 $23K/$29K bull risk reversal bought in the BTC market. However, for ETH, the situation presents a mixed picture, with significant activity in both outright puts, such as 2,000x 8-Sep-23 $1.6K put purchased, and calls such as 1,000x 29-Sep-23 $1.65K call acquired.

Crypto Technical Analysis

Moving on to Technical Analysis, in BTC's daily chart analysis, BTC experienced a 2.2% appreciation yesterday, yet couldn't breach the upper channel boundary. The primary support hovers around the $25.8K mark, slightly beneath the current trading level, while the notable resistance stands firmly at $28K. The RSI has ascended to 43.68, positioning itself within a neutral selling range. Notably, the daily chart reveals a descending channel characterized by successive lower highs and lows. Historically, when this pattern manifested in May 2023, BTC broke above the channel, catalyzing a price surge to $31K.

Meanwhile, ETH saw a discreet gain, elevating its value to $1.64K, marking a 1.39% rise and alleviating pressure on its support at $1.63K. If this support falters, ETH could trend towards the subsequent support at $1.47K, representing a potential 10.98% pullback from its current stance. On the flip side, a formidable resistance lies in wait at $1.95K. With the RSI poised at 40.14, ETH is nearing a neutral selling territory. The prevailing descending triangle pattern observed earlier this week remains intact, as prices inch closer to the trendline. A breakthrough of this trendline could propel ETH towards its resistance at $1.95K.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

• US jobless claims hit lowest level since February; productivity strongest in years

• UK businesses’ inflation and wage expectations ease in August

• SEC probing Ryan Cohen's ownership, sale of Bed Bath & Beyond shares - WSJ

• Arm touts cloud computing expansion, royalties to IPO investors

• COP28 needs to show action not words for business, finance leaders

• Fed's Williams: An 'open question' whether Fed will need to hike again

• Canada's Rogers to sell $2.2 bln in bonds to repay debt

• Fed's Logan: can skip Sept rate hike, but 'there is work left to do'

• Fed's Goolsbee says he hopes 'golden path' is within reach

• BlackBerry leads TSX to third straight day of losses

• Debt-ridden retailer Casino relegated from key French equity index

• Biden heads to New Delhi for G20 amid rising global tensions.

• Asia markets mixed as Japan Q2 GDP grows less than expected; Hong Kong may pause trade.

Crypto

• Former Sam Bankman-Fried lieutenant pleads guilty in FTX case

• Southeast Asia super-app Grab adds support for web3 services

• MAS Approves Digital Asset Exchange AsiaNext as Recognised Market Operator

• CFTC Goes After Opyn, Other DeFi Operations in Enforcement Sweep.

• $500B Korean Asset Manager Mirae Taps Polygon Labs in Securities Tokenization Drive.

• Binance CEO brushes off negativity, assures firm has 'no liquidity issues'.

• Stake hack of $41M was performed by North Korean group: FBI.

• UK financial watchdog could give crypto firms until January 2024 for marketing compliance.

• Aave, Circle, Base become founding members of Tokenized Asset Coalition.

• JPMorgan exploring blockchain-based payment and settlement system: Bloomberg

• JPMorgan lowers bitcoin mining cost estimate following CBECI revision

• Binance Completes Integration of $ETH on zkSync Era Network, Opens Deposits and Withdrawals

• VanEck and Ark Invest Kick Off Competition for First Spot Ethereum ETF in US

Deal Flow

• Pantera Capital Leads $16.5M Investment in ZK-Powered DEX Brine Fi at $100M Valuation.

Yours sincerely,
Treehouse Research 🌳