BTC

ETH

S&P Futures 500

$30,531.77

$1,879.17

$4,471.25

(+0.31%)

 (-0.02%)

(+0.55%)

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

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • UK mortgage rates reach 15-year high; UK wage growth reaches record high as labor market cools (more in Macro & TradFi)
  • Circle CEO optimistic on Yuan-backed stablecoins and Hong Kong regulations; Web3 contributors remain resilient amid crypto winter (more in DeFi & CeFi)
  • BTC Supply in Profit jumps to 18 month high; BTC Relative Unrealized Loss sees re-accumulation period in the near-term (more in On-Chain)
  • BTC IV continues to trade higher than ETH; BTC’s call skew continue to rise signalling near-term optimism (more in Crypto Derivatives)
  • BTC's consolidation suggests a resistance break; ETH and CRV display potential uptrends (more in Crypto Technical Analysis)

Macro & TradFi

Mortgage rates in the UK have reached a 15-year high, with the average level of a two-year fixed deal standing at 6.66%, the highest since August 2008. The increase in rates has raised concerns about the financial difficulties faced by struggling homeowners. The Bank of England's 13 consecutive rate hikes, including a recent 50 basis point increase to 5%, have contributed to the surge in mortgage costs. It is anticipated that further interest rate hikes will occur in the coming months, potentially leading to a technical recession in the first half of next year.

British wage growth matched a record high as basic pay surged by 7.3% in the three months to May, signaling persistent inflationary pressures. However, there were signs of a cooling labor market as the unemployment rate unexpectedly rose to 4.0% and job vacancies fell to their lowest level since mid-2021. The Bank of England closely monitors wage growth as it assesses inflationary pressure. While the strong wage growth suggests further rate hikes, investors scaled back expectations, with yields on two-year government bonds falling. The data will influence the Bank of England's decision on interest rates, which are currently expected to rise in August.

In the US, the Dow Jones Industrial Average increased by 0.93%, the Nasdaq Composite climbed 0.55%, and the S&P 500 gained 0.67%. Ahead of the release of key inflation data from India and the US, most Asia-Pacific markets showed positive momentum. Economists anticipate a slight decline in the US inflation rate for June to 5% from 5.3% in May, which will impact the Federal Reserve's rate hike decisions. Overall, Australia's S&P/ASX 200 gained 0.65%, Japan's Nikkei 225 climbed 0.14%, and the Topix rose 0.6%.

DeFi & CeFi

  • Mantle Network to Launch $BIT to $MNT Migration Channel by July 17
  • Axelar Partners with Microsoft to Help Integration of Web3 and Traditional Internet Systems
  • Layer2 Network Linea Launches Mainnet Alpha with No Current Plans to Issue Token
  • Circle CEO Advises China to Consider RMB-Backed Stablecoin
  • Monthly Web3 Developers Decrease by 22%, but Long-Term Contributors Show Resilience
  • Standard Chartered Bank Increased its Bitcoin Price Target to $120,000
  • DeFi Structured Investment Protocol Cega Expands to Arbitrum
  • Arkham Airdrop Snapshot Taken on July 8th, the Referral Link Appears to Leak Users Information

Jeremy Allaire, co-founder and CEO of Circle, expressed optimism about the regulatory plans for stablecoins in Hong Kong and highlighted the potential role of RMB-backed stablecoins in the internationalization of the yuan. While acknowledging that China is unlikely to open its markets to cryptocurrencies, Allaire emphasized the unique advantages of stablecoins in facilitating the government's goal. He suggested that stablecoins could offer a more immediate solution than the central bank digital currency (CBDC) eCNY, and mentioned the example of a stablecoin pegged to the offshore yuan (CNH). Allaire praised Hong Kong's focus on stablecoin regulations and viewed it as a positive development for Circle's business growth in the region.

According to TokenInsight, the number of monthly active open source developers in the crypto industry has decreased by 22% compared to the same period last year. However, this decline is primarily driven by newcomers who joined the space within the past 12 months. On the other hand, experienced developers with more than a year of crypto experience continue to contribute significantly, representing over 80% of all code commits. Despite the decrease in developer engagement, the current count of 21.3K monthly active developers remains higher than the pre-peak levels seen in November 2021.

On-Chain

Analyzing the Supply of BTC in Profit and Loss, the supply in profit has recently reached its highest point in 18 months, totaling 14.64M BTC. This increase can be attributed to the accumulation of BTC during a correction that occurred around late 2022, when prices dropped to approximately $16K, as well as the recent correction to $25K. On the other hand, the supply in loss has also reached a level of 4.79M BTC, similar to levels observed in March 2016, April 2019, July 2020, and July 2021. Interestingly, these instances, where the supply in loss reaches 4.79M BTC, have historically been followed by a subsequent increase in the price of BTC, as depicted in the chart.

@Glassnode, the BTC market is presently undergoing a re-accumulation phase that often aligns with the halving event. This trend can be visualized by examining the proportion of the Market cap held at an Unrealized Loss (RUL). During the primary bear market, the market experiences a significant decline, leading to deep losses for investors, who gradually capitulate and exit their positions. This is evident from the increase in RUL, as shown in the chart. However, as the market stabilizes and subsequently rallies from its lows, profitability undergoes a sharp recovery, reaching levels similar to the current situation. The subsequent re-accumulation period could indicate that BTC will either trade sideways or gradually increase in value, as observed in previous periods.

Crypto Derivatives

  • Funding rates remain positive for both BTC and ETH
  • Deribit Implied Volatility Index (DVOL) is 44.02% and 41.09% for BTC and ETH respectively
  • 30-day 25-delta skew (C-P) for BTC and ETH is at 2.87% and -0.86% respectively
  • The futures market witnessed $26M worth of liquidations, with long positions representing 51.5% of the total.

Top 3 CEX USDT perp funding rate arbitrage based on the last 24-hour lookback:

Net Annualized APR

Perp (USDT pair)

Long on

Short On

29.92%

BNB

Bybit

Binance

28.39%

SOL

OKX

dYdX

10.65%

DOGE

OKX

Bybit

Source: @CexyArbBot Telegram

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, DOGE vs USDT perps 

2) CEX observed include Binance, Bybit, OKX & DYDX

@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo

The ATM IV for a 7-day period experienced a slight decrease, reaching 38.64%, as the spot market stayed range bound. Conversely, the 30-day ATM IV remained relatively stable and unaffected by short-term fluctuations. Presently, the IV for BTC remains higher than that of ETH, indicating higher expectations of volatility to perform in the former.

Both BTC and ETH continue to exhibit a contango term structure with no significant changes across the IV curve.

When examining the 25 Delta Skew (C-P) on BTC, both the 7-day and 30-day skew have increased slightly, reaching 3.09% and 2.87% respectively. This rise indicates a bullish sentiment towards BTC, as traders increasingly favor call options. Interestingly, ETH displays a negative skew, implying a divergence in market sentiment between the two tokens.

During the previous Asia and Europe trading session, @Paradigm reported mixed sentiments as the top trades that hit the tape were the purchase of 250x 29-Sep-23 $24K Put, 160x 29-Sep-23 32K Call, and 150x 25-Aug-23 $32K Call.

Crypto Technical Analysis

BTC has maintained a steady trend over the past three weeks, trading within a horizontal range of $30K to $31K. Traders are anticipating a breakout from this range, which would signify a continuation of the upward trend.

On the daily chart, ETH have found support at the $1.88K level, near the 100-day moving average (MA). This level has served as a robust support zone in March. Additionally, there is an imminent bullish crossover between the 50-day and 100-day MA, indicating a potential positive shift in momentum for ETH.

In another development, CRV exhibits an ascending channel pattern over the past month, implying a potential uptrend. This pattern is further supported by a bullish crossover above the 50-day MA, suggesting the possibility of a continuation in the trend. However, the current Relative Strength Index (RSI) stands at 57.34, approaching overbought territory. Considering the previous RSI peaks around 65, it is prudent to anticipate a potential price pullback once similar levels are reached.

Access institutional-grade commentary on TradFi × Crypto markets

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Treehouse Research 🌳