BTC

ETH

S&P Futures 500

$67,184.00

$3,495.00

$5,383.25

(-3.21%)

 (-4.57%)

(+0.35%)

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


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Our Daily View

What We Are Covering Today

  • The U.S. considers new AI chip restrictions for China; Pimco warns of regional bank failures (More in Macro & TradFi)
  • ZKsync announces new governance framework and airdrop; Lido partners with Mellow and Symbiotic to launch new restaking vaults (More in DeFi & CeFi (More in DeFi & CeFi)
  • Glassnode highlights Coinbase's growing market influence; Bitcoin's active addresses decline due to new protocols (More in On-Chain)
  • BTC ATM IVs converge across 7-day and 30-day maturities; BTC displays backwardation in shadow-term structure (More in Crypto Derivatives)
  • Both BTC and ETH experienced significant pullbacks, with them currently hovering near their respective immediate support zones (More in Crypto Technical Analysis (More in Crypto Technical Analysis)

Macro & TradFi

The Biden administration is considering additional restrictions on China's access to cutting-edge chip technology used in AI, specifically targeting the gate-all-around (GAA) architecture. GAA, which promises more powerful semiconductors, is currently being introduced by major chipmakers like Nvidia, Intel, AMD, Taiwan Semiconductor Manufacturing, and Samsung Electronics. These measures aim to limit China's ability to develop sophisticated AI systems by restricting access to this nascent technology before it becomes widely commercialized. Shares of Nvidia, AMD, and Intel dropped following the news. The U.S. has already imposed numerous semiconductor sale restrictions on China, citing concerns over potential military advantages. While the final decision on the new regulations is pending, early-stage discussions also include limiting exports of high-bandwidth memory chips. These efforts align with similar moves by U.S. allies and reflect ongoing trade negotiations.

Elsewhere, Pacific Investment Management Co. (Pimco) anticipates further failures among U.S. regional banks due to a significant concentration of troubled commercial real estate (CRE) loans. John Murray, Pimco's head of global private CRE, highlighted that these banks are beginning to experience distress from high borrowing costs and declining property valuations, exacerbated by uncertainties over Federal Reserve interest rate cuts. Larger banks have been selling high-quality assets to mitigate losses, but as distressed loans grow, banks are expected to offload more problematic loans. Pimco has been acquiring CRE loans from large banks over the past 18 months. The situation is dire for regional banks, which heavily invested in CRE, now worth much less. Larger banks, however, are less likely to face systemic failures due to reduced CRE lending post-2008 crisis. The commercial real estate market faces significant challenges, with more than $200 billion in loans maturing by 2025 under stress from high rates and recessionary pressures.

The S&P 500 and Nasdaq reached new record highs ahead of today's CPI data and Federal Reserve decision, while the Dow Jones Industrial Average dipped by 0.31%. The S&P 500 rose by 0.27%, and the Nasdaq Composite rose by 0.71%. OPEC maintained its outlook for increased global oil demand in the second half of 2024, projecting a rise of 2.3 million barrels per day year-on-year, an increase of 150,000 barrels compared to the first half. Apple saw a significant jump of 7.26% following the announcement of its AI strategy at the Worldwide Developers Conference, unveiling a partnership with OpenAI to integrate ChatGPT into its products. Key economic data releases include the US CPI at 20:30 SGT and the China CPI at 09:30 SGT today, with the Bank of Japan's rate decision expected on Friday at around 11:00 SGT.

DeFi & CeFi

  • ZKsync launches new governance framework and announces airdrop
  • Lido partners with Mellow and Symbiotic to launch staking vaults
  • Polygon creates new grant program
  • Thai SEC revokes Zipmex’s licenses after failure to comply with orders

ZKsync announced two significant developments: the introduction of a new governance framework, ZK Nation, and the execution of a major token airdrop. ZK Nation, designed to decentralize and empower community governance, comprises three on-chain entities—the Token Assembly, the Security Council, and the Guardians—each playing a specific role in maintaining the protocol's integrity and implementing community decisions. Also, ZKsync is launching a token airdrop, distributing 17.5% of its 21 billion ZK tokens to users next week, which marks one of the largest distributions among major L2 solutions. 

In other news, Lido has teamed up with Mellow Finance and Symbiotic to launch restaking vaults as a move to maintain its dominance in the Ethereum DeFi ecosystem amidst competitive pressures from EigenLayer. This partnership aims to leverage Lido’s stETH for restaking, allowing users to deposit stETH into Mellow and Symbiotic’s liquid restaking vaults managed by curators who deploy assets across various services to earn yields. This partnership strengthens Lido's position in the Ethereum DeFi ecosystem by enhancing its offerings.

On-Chain

According to an analysis by Glassnode, Coinbase's role in market pricing has grown significantly as it serves both ETF clients and conventional on-chain asset holders. A considerable increase in Whale Deposits to Coinbase wallets followed the ETF launch, reaching an ATH of 19 Apr 2024. However, a notable portion of these deposits are linked to outflows from the GBTC address cluster, which has been a persistent supply overhead throughout the year.

In another analysis by Glassnode, following China's mid-2021 Bitcoin mining restrictions, active addresses on the Bitcoin network plummeted from over 1.1 million to around 800,000 per day. Currently, the Bitcoin network is experiencing a similar decline in activity, driven by different factors, including Inscriptions, Ordinals, BRC-20s, and Runes. Notably, this decline is driven by protocols like BRC-20 and the newer Runes, which require less blockspace and have displaced older protocols in daily transactions.

Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 52.692% and 64.66% respectively.
  • The 30-day 25-delta skew (C-P) for BTC decreased to 2.48% while that of ETH increased to 4.15%.
  • The futures market witnessed $265.63M in liquidations, with longs representing 86.05%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

23.73%

BNB

OKX

Bybit

14.98%

BTC

OKX

dYdX

14.27%

SOL

OKX

Binance

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.


Today's BTC ATM IV shows an increase across both 7-day and 30-day maturities, with the 7-day maturities converging with the 30-day maturities at 62.67% and 62.79%, respectively. This suggests that the market expects more volatility in BTC during the CPI and FOMC announcement tonight, with market participants having similar sentiments up to a period of 30-day maturities. 

Meanwhile, the BTC term structure displays a state of backwardation, showing an increase in volatility in short-term expiries of up to two days. This is an indication that traders are increasingly buying short-dated options to hedge against the potential volatility following the CPI data release. 

The BTC skew chart reveals that both the 7-day and 30-day skews have diverged, with 7-day maturities at 1.67% and 30-day maturities at 4.15%. Notably, 7-day skews are on a declining trend while still being above 0, indicating an increasing preference for puts, suggesting that traders are less optimistic about the market.

Lastly, @Paradigm’s option flows highlighted BTC options trades, including the procurement of a 350x 28-Jun-24 65K Call, 250x 14-Jun-24 71K/73K Call Spread, and 150x 28-Jun-24 44K/ 26-Jul-24 44K Call Calendar. For ETH, significant trades involved the purchase of a 10500x 21-Jun-24 3800 Call, 2625 21-Jun-24 3500 Straddle, and 2000x 21-Jun-24 3700 Call.

Crypto Technical Analysis

Moving on to technical analysis, BTC experienced a significant pullback yesterday, with the price quickly dropping toward the $67K level, the previously identified immediate support. Despite a momentary breach below this level, BTC quickly bounced back, registering as a fake-out on the technical level. Looking ahead, if the price were to drop further, the next support can be observed near the $61K level, representing a significant 9% potential downside. Conversely, if the bulls regain control, the $71K level continues to be a significant resistance, having been tested repeatedly since late March.

Moving on to ETH, it has experienced similar movements in the last 24 hours. As a result, the ETH price definitively broke down on the $3.7K resistance, quickly dropped further, and is currently stabilizing around the $3.5K new resistance zone. If the support level fails to hold, the immediate next support lies at the $3.3K level, a key zone that has seen multiple tests of support and resistance since March. Meanwhile, if the price rebounds from the current level, it may inch toward the now support-turned-resistance at $3.65K.

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