BTC

ETH

S&P Futures 500

$72,032.21

$4,064.06

$5,198.00

(+5.91%)

 (+6.42%)

(+0.18%)

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, where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

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

You can also access our research articles on the Bloomberg Terminal with the command “NH TRH < GO >"!


Our Daily View

What We Are Covering Today

  • Biden proposes $7.3T budget for economic reform; Reddit aims for $748M IPO (More in Macro & TradFi)
  • MetaMask pilots Mastercard-linked crypto card; Coinbase challenges SEC's regulatory clarity refusal (More in DeFi & CeFi)
  • Stablecoin supply increase; ETH shows negative netflow on exchanges (More in On-Chain)
  • Bitcoin options show backwardation and increased put buying; reflects hedging against volatility (More in Crypto Derivatives)
  • BTC reaches a new ATH with no further resistance in sight on the technical front (More in Crypto Technical Analysis)

Macro & TradFi

President Joe Biden unveiled a $7.3 trillion budget for fiscal year 2025, delineating his policy agenda and financial priorities as a cornerstone of his re-election campaign, aiming to demonstrate superior economic management compared to Donald Trump. The proposed budget seeks substantial tax increases on corporations and the wealthy to finance deficit reduction and fund new initiatives designed to alleviate housing and childcare costs for lower-income Americans. Despite its ambitious goals, the budget faces stiff opposition in Congress, especially from Republicans who criticize it for promoting excessive spending and lacking fiscal discipline. Biden's fiscal strategy includes significant measures such as increasing the corporate tax rate from 21% to 28%, implementing a minimum tax rate of 25% for individuals with assets over $100 million, and expanding government programs in healthcare, family leave, and law enforcement. This budget proposal emerges in the aftermath of a polarized political climate, with Biden challenging the economic policies of Trump, his likely opponent in the upcoming election, and amidst public concern over inflation and economic direction.

In other news, Reddit and its investors are targeting to raise $748 million through one of this year's most significant initial public offerings (IPOs), by offering 22 million shares priced between $31 and $34 each. This move could value the company at up to $6.5 billion. In a unique strategy to engage its community, Reddit is allocating approximately 1.76 million shares for its users and moderators, who can sell their shares immediately upon trading commencement, avoiding the typical lockup period. The IPO's timing reflects the volatile market conditions that have seen Reddit's valuation fluctuate from $10 billion in fundraising rounds to considerations of a $5 billion valuation ahead of the IPO. With 73.1 million daily active users and a narrowing net loss from $159 million to $91 million in a year, despite increasing revenues, Reddit's market debut is highly anticipated. The IPO is led by major banks and aims to list on the New York Stock Exchange under the symbol RDDT. 

The US stock market experienced a slight decline yesterday, with the S&P 500 dropping by 0.11%, and the Nasdaq falling by 0.37%, however, the Dow Jones Industrial Average gained by 0.12%. This downturn is amidst market speculation about a potential interest rate cut within the year. Concurrently, the Yen continued its ascent for the sixth consecutive day, marking its longest winning streak since July. This rise follows reports suggesting that the Bank of Japan (BOJ) may terminate negative interest rates this month if upcoming reports on Friday indicate significant wage increases among companies. Adding to the market's unease, Moody's downgraded China Vanke from its investment-grade rating to Ba1, citing the possibility of further downgrades. Market participants are now keenly awaiting the release of US CPI data, due later today at 21:00 SGT, which is anticipated to provide crucial insights into future monetary policy and market direction.

CeFi & DeFi

  • Metamask announces Mastercard-linked payment card
  • Coinbase accuses SEC of law-breaking
  • BTC surpasses Silver in terms of market cap
  • MapleStory announces move to Avalanche
  • Hop DAO to sell over $400K of ARB tokens

MetaMask is piloting a Mastercard-linked payment card that operates entirely on the blockchain, according to CoinDesk. This card, issued by Baanx, would allow users to make daily purchases with cryptocurrency wherever Mastercard is accepted, marking a significant fusion of decentralized finance with mainstream payment systems. The partnership leverages MetaMask's substantial user base in the crypto wallet space and Mastercard's extensive payment network, potentially creating the first truly decentralized web3 payment solution.

Coinbase is pushing back against the U.S. Securities and Exchange Commission (SEC) with a legal action, alleging that the SEC rejected its petition for clear crypto regulation without proper justification. Coinbase asserts that the SEC has dodged its responsibility to develop concrete rules for the crypto industry, opting instead to govern through enforcement actions. The crypto exchange urges the court to either compel the SEC to initiate rulemaking or provide a detailed explanation for its refusal. This case, one of several high-stakes legal battles involving the SEC and the crypto sector, could significantly influence future regulatory approaches to digital assets.

On-Chain

According to CryptoQuant, on-chain data shows a substantial increase in the supply of stablecoins in recent weeks, correlating with heightened market liquidity. This suggests that there is a significant influx of capital ready to enter the market as the opportunities show bullishness.

On the other hand, on-chain data for the Ethereum netflow reveals a significant record outflow of Ethereum from exchanges, with a substantial -154K ETH netflow. This marks the largest movement of Ethereum off exchanges in 2024, with two new highs recorded within a week. This negative netflow reflects investors' growing preference for self-custody and exerts upward pressure on Ethereum's price, provided that demand remains steady.

Crypto Derivatives

  • Funding rates remain positive for both BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 82.72% and 84.69%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to 3.80% while ETH dropped to -3.73%.
  • The futures market witnessed $245.51M in liquidations, with longs representing 65.84%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

95.68%

BTC

Binance

dYdX

91.01%

BTC

Bybit

dYdX

84.78%

BTC

OKX

dYdX

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.


Following Bitcoin's rally past the $71K mark, reaching an all-time high, Bitcoin ATM Implied Volatility (IV) witnessed a significant surge, subsequently retracting to 84% for the 7-day IV and 80.03% for the 30-day IV. Presently, the 7-day IV has adjusted to 84.75%, with the 30-day IV slightly lower at 78.09%. This indicates a substantial increase in option purchases, suggesting that traders anticipate greater price volatility. The higher IV also suggests heightened expectations for Bitcoin's price fluctuations, which may present option traders who are long vega with lucrative rewards.

The term structure of Bitcoin options is currently displaying pronounced backwardation, especially in short-term contracts up to 3 days, indicative of increased volatility. This term structure could be a reaction to the anticipated release of CPI data later today, prompting option investors to enhance their short-term hedges.

Despite significant gains in the spot market for BTC and ETH, there was a notable decrease in the BTC 25 Delta skews (C-P), with the skew for BTC dropping to 2.41% from 8.26% for 7-day maturities and to 3.80% from 7.60% for 30-day maturities. Similarly, ETH experienced a substantial decline in C-P skew, moving into negative territory for 30-day maturities at -3.72% from 3.26%, and a decrease to 0.07% from 3.12% for 7-day maturities. This downtrend indicates a growing inclination among option investors towards capital protection via put options purchasings, reflecting a cautious approach despite the current bullish trend in spot prices. 

Lastly, during the Asia/EU Trading Session, @Paradigm reported that option flows are a mix of bullish instruments and market making. Key BTC trades encompassed the procurement of 525x 26-Apr-24 70/90k Call Spreads bought, 250x 29-Mar-24 95k Call Calendars sold, while notable ETH activities involved the sale of 5,000x 22-Mar-24 / 26-Apr-24 4.4/5k Call Calendars and 3,625x 15-Mar-24 / 22-Mar-24 4/4.3k Call Calendars bought.

Crypto Technical Analysis

In technical analysis, BTC recently surpassed the $70K resistance, reaching a new all-time high (ATH) of $72.6K on Binance. However, it encountered resistance around the $72K level, marked by the upper trendline formed by local higher highs since the start of the month. A breakthrough beyond this level would signify a lack of further resistance on the technical front, allowing the price to continue setting new ATHs. Conversely, if there's a pullback, the immediate key resistance remains within the $69K to $70K range, aligning with the previous ATH.

Moving on to ETH, it closely mirrored BTC's recent activity by swiftly surpassing the arc pattern and breaching the $4K resistance level. It is hovering slightly above $4.06K, indicating the possibility of a fake-out as the breakout hasn't been definitively confirmed. Should the bullish momentum persist, the next resistance is expected to be around $4.2K, a level last observed in December 2021. Conversely, if the price retreats from the current level, it may find support at the lower trendline formed by recent higher lows, within the $3.75K to $3.8K range, suggesting a potential downside of approximately 7%.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

Crypto

Deal Flow

Yours sincerely,
Treehouse Research 🌳