BTC

ETH

S&P Futures 500

$68,093.84

$3,621.13

$5,131.75

(+7.13%)

 (+3.72%)

(-0.22%)

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

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January 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • China targets 5% growth for 2024; Supreme Court rules Trump ballot-eligible (More in Macro & TradFi)
  • SEC delays Ethereum ETF decision; MicroStrategy raises $600M for Bitcoin investment (More in DeFi & CeFi)
  • Bitcoin nears USD all-time high, stirs profit-taking; $MEME holder's accumulation signals bullish outlook (More in On-Chain)
  • BTC term structure goes into a significant backwardation state; ETH C-P skew declines despite BTC nearing its ATH (More in Crypto Derivatives)
  • BTC approaches the $69K ATH while ETH simultaneously challenges the $3.6K resistance zone (More in Crypto Technical Analysis)

Macro & TradFi

China has set an ambitious growth target of around 5% for 2024, a task made more challenging by the absence of the previous year's favorable base effect due to the pandemic's end. Premier Li Qiang, in his inaugural work report to the national parliament, outlined this goal, aligning with economists' expectations but slightly above their 4.6% growth projection for the economy. The government also aims for an unemployment rate of about 5.5% and the creation of 12 million urban jobs, with a projected budget deficit of 3% of GDP and a 7.2% increase in defense spending. This move comes as China seeks to revitalize confidence in its slowing economy without resorting to massive stimulus measures, focusing instead on sustainable, debt-averse growth strategies.

Elsewhere, the Supreme Court has ruled that former President Donald Trump cannot be excluded from state ballots, resolving a contentious legal debate over the applicability of the Constitution's 14th Amendment in barring candidates. This unanimous decision overturned a previous ruling by the Colorado Supreme Court, which had rendered Trump ineligible to run for office again due to his involvement in the events leading to the January 6 attack on the Capitol. The Supreme Court clarified that the responsibility for enforcing the 14th Amendment's provisions lies with Congress, not individual states, thereby ensuring Trump's eligibility for the ballot in all states, including Colorado. This verdict comes at a critical time, just ahead of the Colorado primary, and has broader implications, potentially affecting similar legal challenges in other states. The ruling highlights the complex legal and constitutional questions surrounding eligibility for federal office and marks a significant moment in the lead-up to the 2024 election.

The S&P 500 dipped slightly by 0.12%, closing at 5,130.95, while the Dow Jones Industrial Average fell 0.25% to $38,989.83, and the Nasdaq Composite dropped 0.41% to $16,207.51. Apple's shares declined by 2.5% following a $2-billion EU antitrust fine, contributing to the day's cautious market sentiment. Despite Nvidia's rally fueling optimism in AI technologies, broader market gains were curtailed, reflecting investors' anticipation of upcoming economic reports, including service sector data and non-farm payrolls. The market's focus remains on Federal Reserve Chair Jerome Powell's testimony, with the S&P 500's communication services index being the day's weakest sector, down by 1.5%, whereas utilities saw a 1.6% increase. 

CeFi & DeFi

  • SEC pushes back BlackRock, Fidelity spot Ethereum ETF proposals
  • MicroStrategy set to raise $600M via convertible notes to buy more Bitcoin
  • Bitcoin Claims All-Time High in Euros
  • Coinbase expands wallet-as-a-service offerings
  • Stacks Developer Trust Machines Launches 'Orange Domains' With Tucows, Hiro
  • Tether's USDT Stablecoin Touches $100B Market Cap
  • Hong Kong's Markets Regulator Issues Warning Against Crypto Exchange BitForex

The U.S. SEC has postponed its verdict on the spot Ethereum ETF proposals submitted by BlackRock and Fidelity, marking another delay since its initial deferral in January. This decision follows the SEC's approval of several spot Bitcoin ETFs. The regulatory body has the option to delay its decision up to three times, with a final decision expected by May, a timeline speculated by analysts and emphasized by Bloomberg's ETF analyst James Seyffart as pivotal for Ethereum ETFs. Despite the delays, the anticipation of potential approval has driven a 56.7% increase in Ether's price over the last month. However, opinions differ on the impact of a spot Ether ETF approval compared to the already successful spot Bitcoin ETFs, with some analysts suggesting the former might not achieve the same scale of significance.

Elsewhere, MicroStrategy is planning to raise $600 million through the issuance of senior convertible notes to finance additional Bitcoin purchases, illustrating its ongoing commitment to expanding its Bitcoin holdings, the largest by a corporate entity. These convertible notes, due in March 2030 unless repurchased, redeemed, or converted sooner, underline the company's strategic investment approach, offering potential conversion into MicroStrategy stock or cash. This move aligns with MicroStrategy's strategy under the guidance of its founder and executive chairman, Michael Saylor, to leverage Bitcoin as a core asset. The announcement coincided with a notable increase in MicroStrategy's stock price and Bitcoin's value approaching its historical peak. This aggressive investment stance reflects a broader trend of corporate interest in digital assets, underscoring the growing integration of cryptocurrencies within traditional financial strategies and the potential long-term impact on corporate treasury practices.

On-Chain

According to an analysis by Santiment, realized profits for $BTC have hit a three-year peak since Bitcoin price surged last night, indicating that average traders have benefited significantly from holding their positions. The peak suggests potential resistance to further price increases if these traders decide to take profit on their gains. While the current surge reflects a strong market sentiment, the inclination of holders to take profits could introduce volatility or a temporary ceiling on Bitcoin's price trajectory.

Meanwhile, according to OnchainDataNerd, a prominent holder, identified by the wallet address 0xF0C, executed a significant withdrawal of 8 million $MEME tokens, valued at approximately $394,000 from Binance. This transaction augmented their total $MEME holdings to 389.38 million tokens, equivalent to roughly $19.79 million. Notably, this investor received a substantial allotment of 345 million tokens directly from Memeland on November 2, 2023, and has since methodically increased their position by an additional 44.38 million tokens. This strategic accumulation underscores the holder's growing influence within the $MEME ecosystem and signals a bullish sentiment on the asset's value and potential market trajectory.

Crypto Derivatives

  • Funding rates remain positive for both BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH rose further to 76.37% and 76.15%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC rose further to 7.55%, while that of ETH declined to 5.26%.
  • The futures market witnessed $436.73M in liquidations, with shorts representing 57.81%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

91.48%

SOL

OKX

dYdX

82.32%

SOL

Bybit

dYdX

80.88%

DOGE

OKX

Bybit

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.

BTC ATM Implied Volatility (IV) has continued to rise over the last 24 hours, as BTC spot price nears its 2021 all-time high. Presently, the 30-day IV stands at 73.97%, while the 7-day IV sits at 80.65%. Both figures exceed the previous monthly highs, suggesting that investors anticipate increased volatility in the short term. This heightened volatility expectation is likely driven by the sustained bullish sentiment observed over the past few days.

On the contrary, the term structure has shifted into a notable state of backwardation, characterized by significantly higher IVs for short-dated contracts compared to those with longer durations. This suggests that investors are primarily focused on short-term trades, as evidenced by their heightened interest in option contracts expiring within the next 3 days.

The BTC 25 Delta skews (C-P) have shown another significant uptick, currently resting in the significant call skew at 7.69% for 7-day contracts and 7.55% for 30-day contracts as BTC approaches a new all-time high. However, in contrast, the 30-day skew of ETH has seen a slight decline. This could be a result of the ETH ETF delays and ETH's recent decoupling from BTC returns in the last few days, particularly as ETF inflows are directed solely at BTC. Consequently, options traders are only moderately bullish, with the recent pump in BTC perceived to have minimal impact on the bullish sentiment surrounding ETH in the immediate to short term.

Lastly, during the US Trading Session on Monday, @Paradigm reported option flows that indicate a strong call bias. Some notable trades include the purchase of 275x 8-Mar-24 $70K BTC call, 271x 15-Mar-24 $69K/22-Mar-24 $76K BTC inverse call calendar, and a 6000x 15-Mar-24 $3.7K/22-Mar-24 $4.1K ETH inverse call calendar.

Crypto Technical Analysis

On the daily chart for BTC, it continues to show significant bullish movement getting closer to the previous all-time high of $69K in 2021. The $69K level continues to act as the long-term resistance while the support is at approximately $54K. The RSI appears to be in the overbought territory, exceeding the value of 70 at 86.22. This suggests that BTC may be overbought and could face a potential pullback or consolidation as the market may deem it to be overvalued in the short term.

Moving on to ETH, on the daily chart, ETH also continues its strong bullish trend, albeit slightly more modest as compared to BTC, breaking past a key resistance level of approximately $3.6K. This suggests bullish momentum to sustain an upward trend and this level may become the new support level in the event of a retracement. Similar to BTC, the RSI also shows that it is in the overbought territory, possibly suggesting a potential consolidation phase or pullback soon.

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