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BTC

ETH

S&P Futures 500

$42,356.75

$2,227.25

$4,824.75

(-2.51%)

 (-1.82%)

(+0.35%)

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


GM Treehouser 🌳

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November 2023 Market Recap

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Our Daily View

What We Are Covering Today

  • Apple secures court rulings on import bans, allowing the sale of Apple Watches to continue in the US; The New York Times files a lawsuit against Microsoft and OpenAI, alleging copyright infringement. (More in Macro & TradFi)
  • Microstrategy purchases another $615.7M worth of BTC; Vitalik proposes 3 ways to simplify the Ethereum PoS design on X (More in DeFi & CeFi)
  • Marathon Digital hits 1.6K BTC peak; Curve's Egorov possibly sells CRV holdings (More in On-Chain)
  • Bitcoin's IV rises amid ETF speculation; market braces for regulatory impacts (More in Crypto Derivatives)
  • ETH outperforms BTC, showcasing signs of a potential breakout from crucial resistance levels and reaching a new yearly high.(More in Crypto Technical Analysis)

Macro & TradFi

Apple has successfully won a court ruling temporarily lifting the import ban on its latest smartwatch models, including the Apple Watch Series 9 and Ultra 2. The U.S. International Trade Commission (ITC) had banned the import and sale of these models after a patent infringement case ruled in favor of medical device maker Masimo. The appellate court issued an interim stay of the ITC's decision, allowing Apple to resume sales in its retail stores and online. Apple is seeking to overturn the decision, and the ITC has until January 10 to respond to Apple's request for a longer stay during the full appeal.

Meanwhile, The New York Times has filed a lawsuit against Microsoft and OpenAI, alleging copyright infringement and the unauthorized use of its content to train large language models. The lawsuit seeks to hold Microsoft and OpenAI accountable for damages related to the alleged "unlawful copying and use of The Times’s uniquely valuable works." The New York Times claims that billions of dollars in statutory and actual damages are owed for the use of its content in training the GPT models. The newspaper argues that Microsoft and OpenAI's language models directly compete with Times content and limit its commercial opportunities.

U.S. stocks extended their rally, continuing the final week of 2023 with the markets indicating a 72.7% likelihood of a 25 basis point rate cut by March. The S&P 500 reached its highest level since January 2022, and all three major indexes are poised for monthly, quarterly, and annual gains. The Dow rose 0.43%, the S&P 500 gained 0.42%, and the Nasdaq added 0.54%. Megacaps and chip stocks led the upward momentum. Energy shares surged on Middle East tensions, while notable stock movements include Manchester United (+3.4%), Gracell Biotechnologies (+60.3%), and Intel Corp (+5.2%). The market remains optimistic about easing inflation and potential rate cuts.


DeFi & CeFi

  • Microstrategy expands its BTC holdings by another $615.7M
  • Vitalik Buterin proposes 3 ways to simplify ETH PoS design
  • BONK falls as Solana ecosystem sees profit taking actions
  • Telcoin on Polygon suffers a $1.2M Exploit
  • Wordcoin launches in Singapore after pausing in various other countries
  • Hong Kong proposes the requirement for stablecoin issuers to obtain a license for their operations

MicroStrategy, the leading corporate holder of bitcoin, has expanded its holdings by acquiring an additional 14,620 BTC for approximately $615.7 million. The purchase, revealed by MicroStrategy's Executive Chairman Michael Saylor, was made at an average price of $42,110 per bitcoin. With this addition, MicroStrategy now holds 189,150 BTC, valued at around $5.9 billion, acquired at an average cost of $31,168 per BTC. The company initiated its bitcoin purchases in August 2020 and recently raised $610.1 million through its at-the-market shares offering. MicroStrategy has been actively accumulating bitcoin as part of its treasury strategy, with its holdings now reflecting significant profits.

In other news, Ethereum co-founder Vitalik Buterin has proposed three potential solutions to address a perceived systemic complexity in Ethereum's proof-of-stake (PoS) consensus mechanism. The issue revolves around the growing number of signatures validators must generate, posing a strain on the network. Buterin's first proposal suggests decentralized staking pools with higher minimum ether requirements for validators. The second involves two layers of stakers with different requirements, and the third suggests a rotating set of participants for each slot, reducing the total number of signatures but adding complexity. These ideas aim to streamline the PoS consensus mechanism in Ethereum.

On-Chain

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Marathon Digital has achieved a record-setting performance in Bitcoin production, hitting an all-time high of 1,600 BTC in a single month, as reported by CryptoQuant's estimate. This milestone reflects a significant surge in productivity for the U.S.-based mining company, indicating a robust scaling of operations and an enhanced capacity to generate digital assets. CryptoQuant's estimation provides valuable insights, emphasizing Marathon Digital's successful adaptation to market dynamics and its consequential bolstering of the U.S. position in the global Bitcoin mining landscape. This accomplishment showcases Marathon Digital's operational excellence. 

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In other news, Michael Egorov, the founder of Curve Finance, has transferred a notable sum of 2.5 million CRV tokens, valued at approximately $1.54 million, to the Binance exchange according to @lookonchain. This transaction is part of a larger movement totaling 23.5 million CRV, worth around $14.5 million, directed to Binance over the past five days. The data, accessible via Etherscan, suggests a potential liquidation of Egorov's CRV holdings. Such significant transfers to an exchange commonly precede a sell-off, which could potentially exert downward pressure on CRV's market value, presenting a concerning outlook for CRV token holders and signaling possible shifts in insider confidence. 


Crypto Derivatives

  • Funding rates remained positive for BTC and ETH. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH shot up to 64.55% and 67.04% respectively.
  • The futures market witnessed $175.30M liquidations, with shorts representing 65.76%.
  • The 30-day 25-delta skew (C-P) for BTC fell to 1.54% while ETH shot up to 5.42%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

33.57%

ETH

OKX

dYdX

28.48%

BNB

OKX

Bybit

26.07%

AVAX

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.


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The 30-day implied volatility (IV) for Bitcoin (BTC) has risen to 61.80%, signaling market anticipation of increased medium-term price fluctuations. Concurrently, the 7-day IV has also climbed to 50.11% after sidelining for the past days. This trend indicates a potential convergence of the 30-day and 7-day IVs as the market nears the anticipated ETF approval date in January. The growing disparity between medium and short-term volatility expectations highlights investor uncertainty and strategic positioning ahead of key regulatory decisions.

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The Bitcoin IV term structure, which has shown an increase from the previous day, displays a notable backwardation from the 15-day mark. This anomaly distinctly underscores the market's anticipation of heightened volatility, likely spurred by expectations of a significant event, such as the potential approval of a Bitcoin ETF. This trend suggests that traders are strategically positioning themselves in anticipation of this event, reflecting a keen market sensitivity to regulatory developments and their potential impact on Bitcoin's price dynamics.

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The 25-delta 30-day call-put skew for Bitcoin has declined to 1.54%, and similarly, the 7-day skew has decreased to 0.55%. This movement indicates a diminishing premium for call options relative to puts, even as Bitcoin's price exhibits bullish behavior. This trend signifies a shift in market sentiment towards a more balanced perspective regarding potential movements in Bitcoin's price over the short to medium term.

During @Paradigm’s US Session Hours, highlighted option flows this week, emphasizing downside coverage with strategic put purchases and structured positions. Key BTC trades included the purchase of 650x 29-Mar-24 50/65K Call Calendar, and 600x 29-Mar-24 60K / 28-Jun-24 65K Call Calendar. In ETH, significant activity was seen with the acquisition of 5750x 29-Mar-24 2800 Calls, and 4000x 29-Mar-24 2000/3000 Call Spreads.

Crypto Technical Analysis

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Transitioning to technical analysis, our prior assessment of the double-top pattern has been invalidated, witnessing a surge in price alongside ETH before retracing to further downturns. Concurrently, the RSI has experienced a rapid rebound, currently hovering around 57 on the 4-hour timeframe. Presently, the price movements over the last 24 hours have given rise to a triangle pattern, with the upper boundary positioned at $44.2K, acting as immediate resistance. Meanwhile, the lower boundary of the triangle now functions as immediate support, situated at approximately $42.6K. In the event this level fails to hold, the subsequent support is identified at the previously examined $40K-$40.5K range, representing both the neckline of the invalidated double-top pattern and a pivotal psychological support zone.

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Conversely, ETH played a pivotal role in driving last night's market pump, registering a notable 10% surge in the last 24 hours. Consequently, ETH has marginally surpassed the previously identified resistance at the $2.4K mark. Sustaining a position above this level not only signals a highly bullish trend, marking a new yearly high as we approach 2024, but also clears the path with no immediate technical resistance. Notably, the next resistance level can only be traced through an upper trendline formed by highs since late 2022, presenting a potential 25% upside to around the $3K level from the current position. However, a rejection at this level remains plausible as the breakout is yet to be confirmed. In such a scenario, the price is likely to test support at the lower trendline formed by recent local higher lows, approximately at $2.3K, before potentially descending towards the support zone around $2.1K, aligning with previous highs established since late April.

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