🌳 China Is Expected To Announce An Aggressive GDP Growth Target Amidst Economic Uncertainties; FTX Opens Claiming Window With Questionable Asset Pricings

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• China to unveil GDP target and government work report at NPC; Fed emphasizes they’re in no rush to cut rates (More in Macro & TradFi)
• FTX opens a claiming window with asset prices well below the current market price; The Trump MAGA Memecoin surges as an experiment in PoliFi (More in DeFi & CeFi)
• Short-term holders increase exchange deposits; new investors signal a forthcoming true bull market (More in On-Chain)
• IVs and C-P skews increased as BTC surged again to challenge the key $64K threshold (More in Crypto Derivatives)
• BTC tests the $64K resistance again while ETH followed suit in the last 24 hours (More in Crypto Technical Analysis)

Macro & TradFi

China is set to announce its 2024 growth target and outline its strategy for supporting the slowing economy at the National People’s Congress (NPC) this week. China’s policy stance is expected to stay growth-friendly with an annual growth target of 5% after a volatile year that saw the economy struggle with deflation, a prolonged housing crisis, a growing national debt, and an outflow of foreign investment. Investors are keeping a close eye on policy priorities, stimulus signals, and new economic drivers as China steers away from a property-driven growth model toward boosting consumption. This event is significant for investors, especially considering China's current deflationary environment, achieving an annual growth rate of 5% amidst this backdrop is ambitious and will likely necessitate the implementation of various fiscal stimulus and monetary policies across different sectors.

In other news, the Federal Reserve emphasized that there’s no rush to cut interest rates after recent inflation data showed that price pressures persist. Another key data point this week will be the monthly jobs report, set to be released on Friday. Economists expect job growth to slow down in February, with an estimated increase of 200,000 jobs compared to the large gain of 353,000 seen in the previous month (the largest in a year). The unemployment rate is expected to stay at 3.7%, and wage growth will likely cool down. This Wednesday, the Fed releases its Beige Book, which summarizes economic conditions based on reports from businesses across the country. Other data coming out this week includes separate surveys of service-sector purchasing managers for February and figures on the January trade gap and job openings.

US stock markets concluded February positively, with the S&P 500, Dow Jones Industrial Average, and Nasdaq experiencing gains of 0.80%, 0.23%, and 1.14%, respectively, with the Nasdaq marking a record close since 2021. The surge was partly fueled by expectations of a second wave of rally from the AI trend and interest rate cuts. Additionally, Net app INC shares rallied by 18.17% following reports of its positive revenue growth and record profitability, indicating a strong market position and operational efficiency. Investors are focused on China’s National People’s Congress (NPC) stance on policy direction, the United Kingdom (UK) budget, and interest rate decisions in the Eurozone and Canada.

CeFi & DeFi

• FTX opens the claiming window
• Memecoins surged across the board over the weekend
• Coinbase introduced a smart wallet for developers
• Judge grants SEC’s deadline extension on Ripple case
• Taiko, the ETH equivalent ZK rollup, raises $15M

FTX has opened a claim window for crypto assets affected by its bankruptcy, but users are expressing concerns over the pricing, which is significantly lower than current market values. Major cryptocurrencies like Bitcoin, Ethereum, Solana, and BNB are priced well below their market rates, sparking questions about fairness and transparency on the platform. PwC, the official liquidator for FTX, has provided insights into the situation, indicating that FTX Digital Markets is undergoing a Chapter 11 settlement. The claims portal managed by PwC is set to make its first interim distribution in late 2024 or early 2025. FTX has also issued warnings about unauthorized third parties attempting to bid on behalf of specific FTX Debtors, emphasizing that only Galaxy Asset Management, the court-appointed investment manager, is authorized to handle selling offers or buying requests. Additionally, FTX has received approval from the United States Bankruptcy Court to sell its stake in the artificial intelligence firm Anthropic.

Elsewhere, the Donald Trump-themed MAGA coin has surged nearly 400% over the past month, aiming to achieve the scale and popularity of coins like DOGE or SHIB. Led by Steven Steele, the project's marketing director, the coin represents an experiment in "PoliFi," blending politics, finance, and community. While some view meme coins as degenerate aspects of the crypto world, others see them embodying the lighthearted spirit of reinventing the financial system. Steele believes that the Trump coin's value reflects major events involving Trump, effectively acting as a prediction market. Despite skepticism, interest from fund managers and VCs suggests that the attention token aspect of the Trump coin attracts both investors and die-hard supporters. Looking ahead, the project's roadmap is tied to election-related events involving Trump, leveraging his ongoing media presence.

On-Chain

Glassnode’s analysis of the overall Short-Term Holder (STH) balance transferred to exchanges reveals a significant trend: since October 2023, STHs have escalated their deposits to over 1% of their total supply daily, with a peak deposit rate of 2.36% amid recent ETF-related speculation. This marks the highest relative deposit activity since the March 2020 sell-off, indicating a heightened level of market engagement and potential anticipation of volatility or profit-taking opportunities among short-term investors.

Meanwhile, CryptoQuant's analyst, Crypto Dan, highlights a notable acceleration in the influx of new investors into the Bitcoin market. This trend is underscored by the steep decline in the percentage of Bitcoin (UTXO) held for more than six months, marking the most significant decrease within the current bull market phase. The growing number of new entrants suggests an impending surge of individual investors in the near term. This continued decline in long-term holdings is anticipated to catalyze the onset of a bull market signifying a robust and sustained upward trend fueled by fresh investment and increased market participation.

Crypto Derivatives

• Funding rates remain positive for both BTC and ETH.
• Deribit Implied Volatility Index (DVOL) for BTC and ETH diminished sharply to 72.24% and 74.96%, respectively.
• The 30-day 25-delta skew (C-P) for BTC and ETH rose rapidly to 5.62% and 6.32%, respectively.
• The futures market witnessed $654.41M in liquidations over the weekend, with longs representing 52.08%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

BTC ATM Implied Volatility (IV) exhibited significant fluctuations over the weekend. Initially declining from its peak as the market quieted, IVs experienced a rapid increase last night as BTC regained bullish momentum and approached the $64K threshold once again. Currently, both the 7-day and 30-day IVs are at monthly highs, standing at 83.54 and 74.84 respectively, suggesting that option traders may anticipate another wave of short-term bullish volatility.

A similar narrative can be found with the term structure with IVs rising across the curve at all tenors in the last 24 hours. Notably, the most significant increase occurred between 0 to 4-day contracts, with the mark IV rising by 11% to 42%. This emphasizes traders' expectations of BTC price movements in the immediate week ahead.

The 7-day BTC 25 Delta skews (C-P) recorded a significant uptick over the weekend, currently resting at 5.37% as BTC sustains its price uptrend. In contrast, the 30-day skew registered a more modest increase compared to Friday's figures and surprisingly remained relatively unaffected by last night's price surge. This suggests that option traders may perceive the current bullish momentum as short-lived, with a long-term bullish trajectory awaiting confirmation from potential catalysts on the horizon.

Lastly, during the Asia/EU Trading Session on Friday, @Paradigm reported significant option flows as investors hedged gains throughput purchases and leveraged the high volatilities via call sales. Some notable trades include the sale of 500x -3.00 26-Ap- 24 $34K put/ +1.00 26-Apr-24 $41K custom BTC structure, the purchase of 4000x 8-mar-24 $3.8K ETH call, and the sale of a 3750x 29-Mar-24 $3.5K call.

Crypto Technical Analysis

BTC has trended mostly sideways over the weekend between a tight range. However, we saw a surge last night that tested the key resistance level of $64K for a second time. Currently, BTC is trending sideways at $63K and the RSI indicates that it recently entered the overbought range at 72. Moving forward, the $64K level remains the key level of resistance, with the next immediate resistance marking BTC’s all-time high price of $69k in 2021, a 7.8% increase from the current price. On the other hand, the key support level lies at $58.8K which indicates a potential downside of nearly 4%.

ETH mirrored BTC's price movement in trending sideways, pulling back from its $3.5K resistance to hover around the $3.4K level. RSI, on the other hand, also indicates a neutral position at 65. Going forward, the $3.5K level remains as a level of resistance in case of a rebound from the current level, with the next immediate resistance level at $4K, a level that was last seen in Sep 2021 and represents a 15% potential increase from current price. Conversely, if the price breaks below the current level, the supporting zone lies at $3.3K, situated as the previous resistance zone, indicating a potential downside of around 3%.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

• China Expected to Target GDP Growth of Around 5% in 2024

• Chinese leaders to hold annual 'Two Sessions' meeting as debate about bazooka-like stimulus swirls.

• Fed’s Powell to Double Down on ‘No Rush to Cut’ Message

• Saudi Arabia, Russia and several OPEC+ producers extend voluntary crude supply cuts until end of June.

• Yellen Sees Growing Trade With Chile, a Vital EV Metal Supplier

• Japan to Consider Calling Official End to Deflation, Kyodo Says

• China Barred From Buying US Oil Reserves in Funding Bill

• Congress unveils first six budget bills as government shutdown clock ticks

• Iran election turnout slumps as hardliners prevail

• Le Pen launches European election campaign with swipe at ‘authoritarian’ EU

• Pakistan Picks Shehbaz Sharif as PM for a Second Term

• Hamas arrives in Cairo for cease-fire talks with deal ‘on the table’

Crypto

• FTX claim window prices Bitcoin, Ethereum, others below market rates

• SHIB, WIF Climb 60% as Shorts Lose $50M Betting Against Meme Coins

• Floki Price Surges 100% as Burn Proposal Passes

• U.S. Department of Energy Will Start Comment Period on Miner Survey Proposal

• Blast, Hyped Layer-2 Chain, Sees Most Deposits Bridge to Yield Manager

• Protocol Village: Ankr to Create Liquid Staking Tokens for Bitcoin Staked via Babylon

• WSJ faces defamation lawsuit tied to Tether-Bitfinex article

• Judge grants SEC’s deadline extension on Ripple case

• FTX issues warning on authorized bids and asset sales

• Indonesia mulling changes to dual taxation on crypto: Report

• Don’t rule out algorithmic stablecoins, Crypto Council tells Hong Kong

• Solana gains 34.5% in a week, and network metrics support further gains

• Bitcoin layer 2s among catalysts of this bull cycle, Bitcoin OG says

• Coinbase introduces embedded, smart wallets for developers

• Token release revision fails to halt Starknet’s declining activity

• Minecraft-based crypto project NFT Worlds charts comeback with node sale and rebrand

• Dogwifhat outperforms memecoin market after Robinhood Europe listing

Deal Flow

• Taiko, an 'Ethereum-Equivalent ZK Rollup,' Raises $15M

• Scallop Protocol on Sui Raises $3M from CMS Holdings, 6th Man Ventures, Kucoin Labs & UOB Venture

• TheReadyGames closed a $4 million funding round led by Delphi Digital and Momentum 6

• Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

Yours sincerely,
Treehouse Research 🌳