BTC

ETH

S&P Futures 500

$64,787.91

$3,496.53

$5,542.50

(-0.44%)

 (-1.84%)

(-0.43%)

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 👇

May 2024 Market Recap

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

  • Canada considers tariffs on Chinese EVs; Japan's yen faces its longest decline since March (More in Macro & TradFi)
  • Kraken recovers $3 million from CertiK; Winklevoss twins back Trump's pro-crypto stance (More in DeFi & CeFi)
  • MicroStrategy acquires 11.9K more BTC; UTXO bands point towards significant resistances (More in On-Chain)
  • BTC C-P skew showed a divergence between 7-day and 30-day, which may indicate the potential for a short-term reversal (More in Crypto Derivatives)
  • BTC’s price continues to trade within a descending triangle pattern; ETH consolidates between 3.3K and 3.6K (More in Crypto Technical Analysis)

Macro & TradFi

Canada is poised to introduce potential tariffs on Chinese-made electric vehicles (EVs), aiming to align with similar measures taken by the US and the European Union. Prime Minister Justin Trudeau's administration is under increasing pressure both domestically and internationally to address China's aggressive expansion into global EV markets, seen as an attempt to dominate supply chains and undermine Western industries. The US recently proposed to nearly quadruple its tariffs on Chinese EVs to 102.5%, while the EU plans to raise tariffs up to 48% on certain vehicles. Canadian officials are considering public consultations on the tariffs, with concerns focused not on Tesla, but on cheaper EVs from other Chinese manufacturers potentially flooding the market. 

The Japanese yen is experiencing its longest decline since March, prompting concerns that Japan might intervene to stabilize its currency. Recently trading around 158.90 per dollar and nearing a critical level of 160, the yen has faced six consecutive sessions of losses. Masato Kanda, Japan’s top currency official, emphasized the government's readiness to act appropriately to curb excessive volatility. Despite Japan being added to the U.S. Treasury’s foreign-exchange monitoring list, there were no direct criticisms of Japan's intervention measures.

On Thursday, the S&P 500 and Nasdaq ended their streak of record highs, closing lower as Nvidia's shares dropped 3.54%, dragging down tech-heavy indexes. Despite briefly reaching a new milestone of 5,500 points, the S&P 500 faced pressure from economic indicators, including a rise in jobless claims to the highest level since January and a decline in single-family homebuilding. While the energy and utilities sectors posted gains, these were overshadowed by losses in technology. Conversely, the Dow Jones rose by 299.90 points, or 0.77%. Market sentiment was dampened by Kroger's cautious outlook and a sharp decline in Trump Media & Technology Group's shares, leading to a mixed day on Wall Street. Additionally, the Bank of England maintained its rates but signaled potential support for future rate cuts among policymakers.

DeFi & CeFi

  • Kraken recovers $3 million from CertiK, ending bug bounty saga
  • Trump scores Bitcoin donations worth $2 million from Winklevoss twins
  • Michael Saylor's MicroStrategy acquires 11.9K more Bitcoin for $786M
  • 3iq applies to launch Solana ETP in Canada
  • Layer 2 network Blast to roll out its token airdrop next week
  • ‘Pharma Bro’ claims Barron Trump holds private keys to DJT token

Kraken has successfully recovered nearly $3 million in digital assets from blockchain security firm CertiK, concluding a contentious bug bounty dispute. This resolution follows an incident where CertiK, acting as a security researcher, identified a vulnerability and withdrew the funds from Kraken's accounts on June 9. Kraken accused CertiK of extortion for demanding a reward and a meeting with the business development team before returning the assets. CertiK defended its actions, asserting the substantial withdrawal was necessary to test Kraken's security limits and emphasized that no user funds were at risk. The recovery, minus transaction fees, was confirmed by Kraken's Chief Security Officer Nicholas Percoco on June 20. 

Elsewhere, the Winklevoss twins, co-founders of Gemini, have pledged 15.47 BTC to support the reelection campaign of former President Donald Trump. Tyler Winklevoss asserted that Trump is the "pro-Bitcoin, pro-crypto, and pro-business choice" for U.S. President, criticizing President Joe Biden for allegedly waging a war against cryptocurrency. The twins cited the SEC's enforcement actions and "weaponization of the banking system" against crypto firms under Biden's administration as key reasons for their support. Their donation comes amid Trump's legal challenges and his previous affirmations of crypto. The twins have also previously donated to political action committees supporting both Democratic and Republican candidates.

On-Chain

MicroStrategy has made a significant expansion to its Bitcoin holdings, acquiring 11,931 BTC for approximately $786M, according to a recent announcement. This recent purchase, funded through the offering of Convertible Senior Notes to investors, ranks as their third largest, trailing only behind their acquisitions on February 24, 2021, and March 10, 2024, in terms of dollar value. With this addition, MicroStrategy’s total Bitcoin inventory now stands at 226,331 BTC with their current unrealized profits from these holdings amounting to an impressive $6.3B.

In a separate analysis by CryptoQuant, the UTXO Age Bands data points to two significant resistance levels based on the costs incurred by recent buyers: the 1-4 week UTXO band sits around $69,000 while the 1-3 month UTXO band is approximately $66,000.  UTXO Age Bands tracks Bitcoin's realized price, revealing these ranges as key levels that short-term investors should watch closely.

Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC rose to 48.40% while that of ETH dropped to 62.94%.
  • The 30-day 25-delta skew (C-P) for BTC increased to 1.19% while that of ETH remained flat at 4.37%.
  • The futures market witnessed $124.67M in liquidations on Monday, with longs representing 56.40%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

21.45%

ADA

OKX

dYdX

21.20%

AVAX

OKX

Bybit

18.09%

AVAX

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.

Despite fluctuations in implied volatility (IV) during yesterday’s trading session, both the 30-day and 7-day ATM IV for BTC have remained relatively constant at 46.73% and 41.90%, respectively. This indicates a lack of interest from traders, likely due to the uncertainty surrounding further developments in the ETH ETFs by the SEC.

The term structure for both BTC and ETH continues to exhibit a contango shape, with minimal variances across all tenors along the curve.

The BTC C-P skew chart showed a divergence between the 7-day and 30-day skews. The short-term skew continued to drop, while the medium-term skew rose slightly. This potentially indicates that the market may be pricing in a short-term reversal, where the price could hit the bottom support in the short term but transition to a bullish trend in the medium term.

Lastly, @Paradigm highlighted a market with more selling activities as the US session took a profit on the gains during the Asia/Europe hours.  Key trades during this session included the sale of 537x 28-Jun-24 64K/68K BTC Bear Risk Reversal, 325x 27-Sep-24 60K BTC Put. For ETH, there was a purchase of 3,000x 27-Sep-24 4000 ETH Call.

Crypto Technical Analysis

On BTC’s 4-hour chart, BTC price action failed to breach the descending triangle’s resistance trend line. This unsuccessful breakout keeps the bearish pattern in play. Currently priced at $64.9K, BTC faces a potential test of the nearby support level at $64.7K if bearish sentiment dominates the market. On the upside, resistance remains at $66.6K, representing a 2.6% upside, with the immediate downtrend line acting as a first hurdle to overcome.

On the ETH 4-hour chart, the price of ETH is currently trading at $3.5K, consolidating sideways over the past few days due to a lack of market catalyst. The resistance of ETH presents itself at $3.6K while the support level is observed at $3.3K. Traders should monitor for any breakout above resistance or below support as it could signal a potential trend shift. The RSI trend suggests that market participants are awaiting a catalyst to define the next direction.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

Crypto

Deal Flow

Yours sincerely,
Treehouse Research 🌳