🌳 China Targets Nvidia Amid Tech Tensions; MicroStrategy Deepens Bitcoin Commitment

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Our Daily View

What We Are Covering Today

• China's economy faces dual pressures; Nvidia antitrust probe fuels tech tensions, while inflation highlights fragility (More in Macro & TradFi)
• Microstrategy expands its BTC portfolio by another $2.1B; El Salvador required to remove BTC laws to get an IMF loan (More in DeFi & CeFi)
• Pumpfun deposits $24.3M worth of SOL to Kraken; ETH whale continues accumulation with the purchase of 1,700 ETH (More in On-Chain)
• BTC Flat IV’s signals range-bound trading; Skew indicates short-term caution (More in Crypto Derivatives)
• BTC and ETH experience heightened volatility with a bearish decline (More in Crypto Technical Analysis)

Macro & TradFi

China has initiated an antitrust investigation into Nvidia, escalating tensions between Beijing and Washington amid competition over advanced technologies like artificial intelligence. The probe, announced by Chinese state media, focuses on potential violations of China’s anti-monopoly law and commitments tied to Nvidia’s $6.9 billion acquisition of Mellanox in 2020. Nvidia, a leader in AI chips, has faced challenges from U.S. export restrictions, which have created a black market for its advanced GPUs in China. Analysts view the investigation as politically motivated, coinciding with Washington’s tighter export controls and Beijing’s push to prioritize domestic AI processor development, including urging local firms to reduce reliance on Nvidia in favor of Huawei. Despite geopolitical strains, Chinese customers remain a significant revenue source for Nvidia, contributing $5.4 billion in the most recent quarter. 

In other news, China’s inflation data for November highlights the continued fragility of its economy despite recent stimulus efforts. Consumer prices rose by just 0.2% year-on-year, missing forecasts, while factory deflation persisted with producer prices falling for the 26th consecutive month. The slight uptick in core inflation and easing PPI deflation suggest marginal impacts from policy measures, but overcapacity and external pressures, including expected U.S. tariff hikes under a new Trump presidency, are likely to keep inflation and growth subdued. Economists remain pessimistic, with Fitch Ratings cutting China’s 2025 growth forecast to 4.3%, as structural weaknesses and external headwinds challenge Beijing’s fiscal strategy. China’s Politburo signaled a shift toward more aggressive economic stimulus in 2025, adopting a “moderately loose” monetary policy for the first time in 14 years and pledging a more proactive fiscal stance. 

U.S. stocks retreated from record highs on Monday, driven by a decline in tech shares as investors awaited key inflation data. The Nasdaq dropped 0.84%, the S&P 500 fell 0.61%, and the Dow declined 0.54%. In contrast, U.S.-listed Chinese stocks surged after China’s policymakers signaled a shift to a moderately loose monetary policy and a more proactive fiscal approach for 2025, their first major policy change since 2011. Top gainers included Nio up 12.36% and Bilibili up 21.65%. Market focus remains on the upcoming U.S. CPI report, scheduled for release on Wednesday, December 11, at 9:30 PM SGT, which could provide further direction for the markets.

DeFi & CeFi

• Microstrategy added another $2.1B BTC to their portfolio
• El Salvador negotiating $1.3B loan with IMF which requires the country to change BTC policies
• Binance lists MOVE along with other tier-1 exchanges
• Jupiter to airdrop another $860M in JUP 
• Bitmain launches US production line amidst geopolitical tensions

MicroStrategy, led by Michael Saylor, has added another 21,550 Bitcoin to its holdings, spending $2.1 billion for an average price of $98,783 per token. The purchase, funded through the sale of $2.13 billion worth of shares, brings MicroStrategy's total Bitcoin holdings to 423,650 BTC, valued at nearly $42 billion. This acquisition means the company now controls over 2% of the total Bitcoin supply. The buying spree may have contributed to Bitcoin's price surge, which briefly exceeded $100,000, fueled by strong U.S. investor demand and inflows into U.S. spot Bitcoin ETFs. MicroStrategy's stock fell 1% in premarket trading, coinciding with a slight dip in Bitcoin's price.

In other news, El Salvador is reportedly negotiating a $1.3 billion loan from the IMF, which requires the country to amend its Bitcoin policies. To secure the loan, El Salvador must remove the mandate for businesses to accept Bitcoin as a form of payment, making its adoption voluntary instead. El Salvador had previously decided in 2021 to make Bitcoin legal tender, which the IMF had consistently opposed due to concerns over financial stability. The IMF deal, expected to be approved by the board, could also unlock $2 billion in additional financing from the World Bank and the Inter-American Development Bank. While Bitcoin remains legal tender in El Salvador, the IMF's influence will likely result in more conventional economic policies, including a reduction in budget deficits and efforts to increase foreign investment. Despite the policy change, Bitcoin reserves worth over $600 million still play a significant role in the nation's economic strategy.

On-Chain

An on-chain analysis by Lookonchain indicated that Pumpfun deposited 109,587 SOL, worth $24.3M, to Kraken, continuing its pattern of selling activity. Over time, Pumpfun has amassed a total revenue of 1,661,078 SOL, valued at approximately $362M. Of this, 1,472,829 SOL, worth $289.5M, has been sold through decentralized exchanges (DEXs) and subsequently deposited to Kraken. This activity highlights Pumpfun's strategy of consistently realizing profits and increasing liquidity through centralized exchanges. For traders, monitoring this behavior is critical, as continued deposits and sales may impact market dynamics and signal potential profit-taking phases among major holders.

In another analysis by Lookonchain, a whale has recently purchased an additional 1,800 ETH, worth approximately $7M, continuing its significant accumulation trend. Since May 24, this whale has acquired a total of 39,600 ETH at an average price of $2,487 per ETH, totaling $99M in investments. With Ethereum's current price, the whale holds an unrealized profit of approximately $54M. This activity highlights the narrative of large stakeholders positioning themselves for long-term gains and may contribute to bullish sentiment in the Ethereum market. For other traders, such accumulation is a key indicator of market confidence and a potential precursor to further price movements.

Derivatives

• The funding rate for BTC and ETH remained positive.
• Deribit Implied Volatility Index (DVOL) for BTC remained flat at 59.34 while that of ETH rose to 75.68.
• The 30-day 25-delta skew (C-P) for BTC remained flat at 3.17 while that of ETH fell to 2.02.
• The futures market witnessed $1.72B in liquidations over the weekend, with longs representing 90.11%.

BTC’s at-the-money IV for both 30-day and 7-day IVs remained flat at 56.19 and 55.73. This suggests an outlook that BTC is likely to range here for the remainder of the year given the lack of BTC related catalysts over the horizon.

BTC's options term structure has remained in backwardation, highlighting traders' preference for near-term contracts amid expectations of heightened price volatility. The focus on shorter-dated maturities aligns with market anticipation of significant price movements following the release of the US CPI data on Wednesday, 11 December, at 21:30 SGT.

BTC's skew remains positive, indicating a general preference for call options over puts, which often reflects bullish sentiment. However, the 7-day Call-Put skew is diminishing, falling to 0.19, suggesting a shift toward a more bearish short-term outlook, which implies that options traders are increasingly viewing limited upside potential for BTC in the coming week. 

Lastly, @Paradigm highlighted a session with a mix of bullish and bearish structures. Key BTC trades included the purchase of 1401x 28-Mar-25 $150k Calls and 714x 27-Dec-24 $90k/$115k Bear Risk Reversals. Meanwhile, ETH flows featured the sale of 4350x 13-Dec-24/$27-Dec-24 $3.8k Call Calendars and 2750x 27-Dec-24 $3.8k/$4.2k Bull Risk Reversals.

Crypto Technical Analysis

BTC failed to hold and declined further to the current level of $97.6K. A further pullback may see BTC retrace toward the $94.8K support level, a 2.8% decline. The immediate resistance level is at $99.2K, near the $100K psychological level. The Bollinger Bands are expanding which implies increased volatility, and the price is running in the lower half of the band which could signal further retracement in the short term. The RSI level has dipped below neutral levels to 43, which confirms this bearish decline.

ETH is at $3.7K and in a bearish decline as seen by the multiple red candlesticks which indicate persistent selling pressure. The support zone is around $3.3K, while the resistance level is at $3.9K. Similarly, the Bollinger Bands are expanding with ETH trending towards the lower half of the band, suggesting that it is experiencing heightened volatility with a bearish sentiment. The RSI level has rebounded from the oversold territory to 35.4, which could potentially signal a reversal if it regains upward momentum.

Access institutional-grade commentary on TradFi × Crypto markets

By TRHX Research

Daily Readings

TradFi

• Asia markets open mostly higher as China stimulus plans boost sentiment; Australia rate decision in focus.

• Nvidia shares fall after China opens investigation over possible violation of antimonopoly law.

• Tesla sued by family of crash victim over 'fraudulent misrepresentation' of Autopilot

• OpenAI releases Sora, its buzzy AI video-generation tool

• Syrian rebels seek to consolidate control

• Embattled Trump nominees Hegseth, Gabbard visit Senate seeking support

• Ad giant Omnicom takes aim at Big Tech, AI era with $13 billion Interpublic deal

• Gallagher strikes $13.5 bln deal for AssuredPartners to strengthen insurance broker business

• South Korea President Yoon banned from foreign travel as leadership crisis deepens

• Zelenskiy seeks diplomatic end to Russia's war, floats role for foreign troops

• Singapore’s Cautious Wealth Fund Takes More Private Markets Risk

• UK business confidence falls to lowest level in almost two years after Labour budget

• China's inflation weakens as new risks cloud horizon

Crypto

• MicroStrategy Makes Another Large Bitcoin Purchase, Buying 21,550 BTC for $2.1B

• Maverick Protocol aims to bring ‘MemeFi’ to Base

• Floki, Mastercard launch 13-crypto debit card in Europe

• Changpeng Zhao says it’s ‘inevitable’ for China to build a BTC reserve

• Tether USDT wallets surge to 109 million, challenge Bitcoin and Ethereum user base

• Russian lawmaker proposes strategic Bitcoin reserve to counter geopolitical challenges

• Bitcoin sees another flash crash, leading to $1.52 billion cascade in crypto liquidations

• Jupiter to airdrop $860 million in JUP tokens to loyal community voters

• Bitmain launches US production line to outmaneuver geopolitical trade tensions

• El Salvador plans to ease bitcoin acceptance requirement to unlock $3 billion in loans: report

• Total stablecoin market cap tops $200 billion as onchain lending yields surge

• Movement Network launches mainnet beta and native token

• Cult memecoin from Milady NFT creators goes live at over $600 million FDV

• Pudgy Penguins overtakes BAYC as second-largest NFT collection by market cap

Yours sincerely,
TRHX Research (Formerly Treehouse Research) 🌳