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Treehouse Daily5 Sep 2023

🌳Xi Jinping Replaced By Li Qiang At G20 Summit; Crypto Betting Platform Stake Exploited For $40M

image of the blog detal

BTC

ETH

S&P Futures 500

$25,764.46

$1,626.00

$4,513.75

(-0.51%)

 (-0.52%)

(-0.19%)

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


GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • Xi Jinping replaced by Li Qiang at G20 Summit; Huawei’s Mate 60 Pro signifying Beijing’s strides in semiconductors (more in Macro & TradFi)
  • Crypto betting platform Stake exploited for $40M; Binance global head of product Mayur Kamat resigns (more in DeFi & CeFi)
  • Large-scale $ETH transfers to Coinbase, monitor closely; $RLB whale accumulation continues (more in On-Chain)
  • BTC C-P skew has reached a new monthly low while term structure has seen minimal changes across the curve (more in Crypto Derivatives)
  • BTC consolidates; ETH's bearish signs suggest potential downside (more in Crypto Technical Analysis)

Macro & TradFi

Premier Li Qiang will represent China at the upcoming G20 Summit in New Delhi, with President Xi Jinping's notable absence signaling a missed opportunity for a potential meeting with U.S. President Joe Biden. This unprecedented nonattendance marks the first time a Chinese president has skipped a G20 leaders' gathering since its commencement in 2008. As the global community speculates on this decision, it is highlighted by Xi's recent participation in the BRICS summit in South Africa. Meanwhile, global powers like Russia, represented by its foreign minister due to President Vladimir Putin's International Criminal Court arrest warrant, prepare to engage in the summit's proceedings. This G20 meeting, amidst a backdrop of shifting geopolitical alliances and ongoing U.S.-China efforts to stabilize relations, is further underscored by Germany's expressed regret over Xi's decision and existing border tensions between India and China since their 2020 clash.

Shifting our focus, Huawei Technologies Co. and China's foremost chipmaker, SMIC, have introduced an advanced 7-nanometer processor for Huawei's new flagship, the Mate 60 Pro. This development not only signifies Beijing's ambitious strides in its semiconductor sector but also challenges the efficacy of US efforts aimed at curbing China's reach in high-end tech. The ripple effects of this collaboration were evident in the financial markets, with SMIC's shares soaring 11% in Hong Kong. Additionally, the Mate 60 Pro has showcased cellular capabilities on par with top-tier 5G devices such as Apple's latest offerings. Nevertheless, amidst the enthusiasm, experts are recommending measured optimism, citing concerns about the potential production volume and long-term economic feasibility of China's semiconductor initiatives.

The US markets were closed yesterday due to Labor Day. On the other hand, in Asia, Japan’s Nikkei 225 and South Korea’s Kospi were down 0.24% and 0.29%. Notably, Country Garden saw its stock soar by 14.6% post-approval for a bond repayment restructuring. However, European markets retracted from early gains due to apprehensions about eurozone interest rate directions. Investors now look to the Fed’s September two-day policy meeting, in what is already historically a weak month for markets.

DeFi & CeFi

  • Crypto betting platform Stake exploited for $40M
  • Binance global head of product resigns
  • Matter Labs co-founder proposes Ethereum court system
  • Proposal for dYdX V4 and token migration to dYdX Chain approved
  • Cronos Labs searches for participants for $100M accelerator program
  • LSE Group draws up plans for blockchain-based digital assets business

Australian crypto betting platform Stake experienced an apparent exploit, leading to the withdrawal of approximately $16 million on the Ethereum network. Blockchain analysts Cyvers and ZachXBT reported losses totaling $25.6 million across Polygon and the Binance Smart Chain as well. According to Cyvers, the stolen funds were converted into Ether (ETH) and moved to external wallets. The compromised Stake wallet still holds $340,000 ETH and $2.1 million in various altcoins. As reported by multiple users on Twitter, withdrawals from this wallet have been temporarily halted. Surprisingly, Stake resumed its services just 5 hours after the hack. Stake claimed that user funds remained secure, despite the discovery of unauthorized transactions on its ETH/BTC hot wallets. Additional information regarding the exploit has not been disclosed by Stake.

In other news, amid Binance’s regulatory challenges in the US, its Global Head of Product and Design Mayur Kamat has resigned from his role. Kamat cited “personal reasons” for his departure and stated that he is transitioning product leadership to the next generation of leaders at Binance. His departure is the latest in a series of senior executive exits from Binance, including the Asia-Pacific head, chief strategy officer, general counsel, and chief business officer. Binance’s market share has dropped to 47% from 63% previously, although it retains its position as the largest cryptocurrency exchange.

On-Chain

According to @santimentfeed, Ethereum has witnessed two distinct large-scale transfers to Coinbase, each approximating 150,000 ETH. These transactions, among the most substantial in 2023, mark the most significant on-chain activity spike since June 13. While the underlying motives behind these whale movements remain unknown, there has been no correlation to immediate price impact. Market participants should however monitor subsequent on-chain and off-chain activities closely to gauge any broader market implications.

According to @lookonchain, a profitable player renowned for their adept trading of $RLB has again acquired 7.1M $RLB at $0.165, investing a substantial 1.25M $USDC in September. Notably, this wallet has been highly successful in buying lows, having previously netted gains of $358K on $RLB trades. Such moves from seasoned market actors warrant attention, as they often serve as precursors to potential market shifts and can provide insights into the underlying sentiment towards particular assets.

Crypto Derivatives

  • BTC funding rate flipped to a slight negative while ETH funding rate flipped to positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH rose to 37.99% and 38.94%, respectively.
  • 30-day 25-delta skew (C-P) dropped further for BTC and ETH, currently at -4.39% and -4.43% respectively.
  • The futures market witnessed $46.66M worth of liquidations in the last 24 hours with longs representing 69.37% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

14.65%

BNB

Bybit

Binance

13.57%

DOGE

Bybit

dYdX

10.34%

SOL

Binance

Bybit

Source: @CexyArbBot Telegram Bot

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.


In the past 24 hours, BTC's ATM IV has experienced a slight decline to around 31.4% and 33.57% for 7-day and 30-day options, respectively. This movement aligns with the market trend of BTC trading sideways within its technical ranges.

The term structures for both BTC and ETH show a similar pattern, as they continue to remain in contango. Despite a minor IV dip in the further-dated options, there have been minimal changes observed across the curve.

BTC's 30-day (C-P) skew has continued its decline from the weekend, dropping below the previous low on August 22nd, which resulted from the market-wide crash driven by BTC. This decline has now reached a new low in the last 30 days, indicating a persistent bearish sentiment for Bitcoin as traders are favoring puts over calls to safeguard against potential capital downsides.

Finally, @Paradigm reported a relatively calm trading session in Asia and Europe, possibly influenced by the observed US holiday. Interestingly, trading activities predominantly focused on ETH, with traders looking at contracts expiring in October and November. Notable flows include the purchase of 8500x 24-Nov-23 2100 ETH Call, 2125x 27-Oct-23 1900 / 24-Nov-23 1900 ETH Call Calendar, and the sale of 3000x 29-Dec-23 1900 ETH Call.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC continues to trade within a confined channel, specifically between $25.8K and $27.9K on the 4-hour chart. Currently, BTC is testing a crucial support at $25.6K. Should this level be breached, the asset could likely tumble down to its next significant support level at $21.1K, marking an 18.06% decline from its current price. On the flip side, the primary resistance stands firm at $28K. Adding to the complex outlook is the RSI, which currently registers at 36.50 and is exhibiting a downward trend, potentially signaling that the asset is approaching oversold conditions.

On ETH's 4-hour chart, a descending trendline has emerged. Notably, on 17th Aug, the bulls attempted but couldn't surpass this trendline, which indicates that resilient bearish momentum may be in play. As of now, Ethereum grapples with a critical support level at $1.63K, which is under immediate pressure. If ETH breaks this support, the next significant support would be at 1.43K, which is a dip of 8.69% from the current price level. On the other hand, the next significant resistance lies at $1.8K. The current RSI, registering at 34.73, hints at a potential approach into oversold territory.

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