BTC

ETH

S&P Futures 500

$22,413.75

$1,565.50

$4,053.50

(-0.12%)

 (-0.11%)

(+0.23%)

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

GM Treehouser 🌳

Welcome to our Treehouse Daily newsletter (previously known as The Canopy Collective), where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

In case you have missed it, check out our latest research piece 👇


Our Daily View

What We Are Covering Today

  • Real wage in Japan falls for 10 consecutive months; Xi Jinping criticized US for the suppression on China (more in Macro & TradFi)
  • Alameda Research files a lawsuit against Grayscale Investments, CEO Michael Sonnenshein, and DCG, MUX and Synthetix Perps will aggregate on Optimism (more in DeFi & CeFi)
  • Old supply realized price of BTC coincide with that of Dec-2018+ era whales realized price (more in On-Chain)
  • A large bull diagonal call spread on ETH dominate the tape (more in Crypto Derivatives)
  • BTC and ETH continues to move sideways with low volatilities (more in Crypto Technical Analysis)

Macro & TradFi

Traders are speculating that the Fed may raise interest rates beyond the 5.1% level in December with fed funds futures currently pricing 100bps hike in 2023 as the likeliest scenario. In the latest MLIV Pulse survey, 65% of professionals and 66% of retail investors say that they expect cash holding to bolster their performance rather than being a drag. Despite the Japanese government's efforts to increase pay, real wages for workers in Japan have fallen by the largest amount since 2014. The decline of 4.1% from the previous year was reported by the labor ministry and marks the 10th consecutive monthly decrease.

Tension between China and the US heightens. Chinese leader Xi Jinping criticized US policy in a strong and direct manner, attributing recent challenges faced by China to a Washington-led campaign to suppress the country. Xi stated that Western countries, led by the US, have implemented containment, encirclement, and suppression against China, leading to unprecedentedly severe challenges to its development.
US stocks reversed early gains as investors treaded lightly ahead of Fed Chair congressional testimony with DJIA edging up slightly by 0.12% and SPX 0.07% while NASDAQ slipped by 0.1%. Meanwhile, 10-year Treasury yield was up slightly to 3.98%. Metal futures fell across the board due to China’s growth expectations.

DeFi & CeFi

  • Alameda Research files a lawsuit against Grayscale Investments, CEO Michael Sonnenshein, and DCG
  • EOS Network Foundation plans a consensus mechanism upgrade
  • Kraken will launch its own bank, according to Chief Legal Officer Marco Santori
  • Utah passes legislation recognizing decentralized autonomous organizations (DAOs)
  • MUX partners with Synthetix Perps to expand on Optimism
  • Babel Finance proposes the "Babel Recovery Coin" to repay creditors
  • Binance attempted to hire Gary Gensler as an advisor before he became SEC Chair
  • Gitcoin receives initial liquidity for its Staked $ETH Index

Alameda Research, a sister company of FTX, has filed a lawsuit against Grayscale Investments, CEO Michael Sonnenshein, and Digital Currency Group (DCG) to allow redemptions and reduce fees. The lawsuit seeks to realize over $250 million in asset value for FTX Debtor's customers and creditors, alleging that Grayscale has extracted exorbitant management fees and allowed shares of Grayscale Bitcoin and Ethereum trusts to trade at roughly a 50% discount to their net asset value. Alameda claims that reducing fees and allowing redemptions would increase the shares' value by at least 90%. Grayscale called the lawsuit "misguided" and said they have been transparent in their efforts to convert GBTC into an ETF. The suit was filed in the Court of Chancery in Delaware.

MUX has announced its collaboration with Synthetix Perps to expand its offerings and provide users with access to 18 crypto pairs, 5 forex pairs, and more to come. The MUX Leveraged Trading Aggregator will support all markets and liquidity from Synthetix Perps, as well as apply the liquidation price optimization feature for Perps positions. MUX protocol offers zero price impact trading, up to 100x leverage, zero counterparty risks for traders, and universal liquidity through liquidity multiplexing.

Gitcoin, an organization that supports the funding of open-source software, has launched the Staked $ETH Index (gtcETH) after a successful community vote. The gtcETH is the first on-chain offering that allows holders to earn rewards from a diverse set of liquid staking tokens while supporting the funding of digital public goods. The index is built on Index Coop's EVM-based protocol and includes tokens from the top liquid staking protocols on Ethereum, including Lido, Rocket Pool, and StakeWise. The new index could provide a consistent revenue stream for Gitcoin to fund grants, with token holders incurring an annualized streaming fee of 2%, with 1.75% going to Gitcoin's decentralized autonomous organization and the remaining amount to Index Coop.

On-Chain

Looking on-chain, there are different average acquisition prices derived from the three main cohorts in the Bitcoin economy, such as the Young Supply Realized Price ($21.K), Total Market Realized Price ($19.8K), and Old Supply Realized Price ($23.5K). The recent rejection of spot prices from levels coinciding with the Old Supply Realized Price suggests that many older coins are held by buyers who are currently underwater in their positions. By cross-analyzing with whale wallets (holding above 1k $BTC) and their average acquisition prices during different cycle eras, their holdings went into an unrealized loss when the market plunged below $18k in early November 2022. The recent recovery stalled at the approximate cost basis of the Dec-2018+ era whales, coincident with the Old Supply Realized Price (@glassnode).

Looking at the Net Unrealized Profit/Loss (NUPL) metric, the market appears to be in a transitional phase as the metric has shifted from a state of net unrealized loss to a positive condition since mid-January. On average, Bitcoin holders are now holding a net unrealized profit of around 15% of the market cap. However, when factoring in lost coins, the adjusted NUPL (aNUPL) indicates that the market is only slightly below break-even and therefore the current cycle may still be considered a bear market.

Crypto Derivatives

  • BTC and ETH funding rates continue to decline
  • 30-day ATM IVs rebounded to 47.84% and 53.15% for BTC and ETH respectively
  • 30-day 25 delta put skew eased to -1.23% and -3.90% for BTC and ETH respectively

Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:

Net Annualized APR

Perp (USDT pair)

Long on

Short On

12.79%

XRP

OKX

BYBIT

12.41%

SOL

OKX

BYBIT

9.64%

ETH

DYDX

BYBIT

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

For futures, total liquidations over the past 24 hours dropped to a low of $29.89M, the majority coming from longs at $19.43M. Futures’ open interest saw an increase of 0.91% and 2.02% for BTC and ETH respectively as shorts positions build up.

On the options front, IVs continue to decline though to a lower extent as IVs on ETH options are close to their January lows. Term structure remains in contango for both majors. Put skew has also eased as more calls were traded in the past 24 hours with put-call ratio for BTC and ETH at 0.47 and 0.36 respectively. RV declined to a low of 40.68% and 43.87% for BTC and ETH respectively, resulting in carry to climb back into positive territory for BTC at 3.4%.

On the flow side, the volume was dominated by a ETH Mar / May bull diagonal spread, the volume at about 28k vega across the legs with strikes at $1.7K and $1.8K. As for BTC, volumes mostly centered around near-term calls with long ratio call spread as the most traded strategy.

Lastly, the VIX was relatively flat at 18.62.

Crypto Technical Analysis

Onto TA, the narrative remains largely the same as yesterday with BTC prices hovering around the $22.3 - 22.5K level without extensive volatilities. Sideway movement continues with no clear signs of break-out. RSI has also recovered further to around 43.4 and 44.1 respectively for 4H and 1D. The next support level continues to be at $21.55K before going into the daily support range of $20.8K to $21.1K and a retest of the $23.9K resistance will be expected if a reversal is observed at the current support level.

As for ETH, the lower bound of the rising channel was respected without pricing falling to the $1.50K level. Furthermore, a small rising channel was observed at the 1H timeframe. Together with the approaching of the 4H lower bound, this may serve as an indicator for potential price reversal. However, if the bears take control over the price again, the next support zone remains to be the $1.49-1.50K range which also serves as an important psychological support level.

Have a minute?

Tell us how we can improve Insights and Treehouse Daily!

Take the Survey

Institutionalizing DeFi: Opportunities, Risks, and the Future of Finance

Uncover the world of institutional DeFi adoption and analytics. Explore how institutions are embracing cryptocurrency and DeFi.

Read Now

Daily Readings

TradFi

Crypto

Deal Flow

Yours sincerely,
Treehouse Research 🌳